Contract lifecycle management solutions today can do much more than organize and store contracts and act as digital filing cabinets. The current state of the contract management software market is quite mature, with a multitude of vendors catering to the demand for better contracting.
And in this red ocean of CLM solutions, there is much noise about the best solution, what kind of features one should look into, etc. The problem today isn’t a lack of choice, but an abundance of options.
Faced with an abundance of software vendors with each having their own areas of expertise, the buyer/evaluator needs to cut through the clutter and pinpoint and assess the most important features.
This blog aims to help legal teams to effectively narrow down on top must-have features, while keeping abreast of the recent technological advancements in this field.
What are the top 7 features you should look for in Contract Management Software?
Below is a comprehensive list. The features listed here are good yardsticks to understand, evaluate and compare various solutions and assess their respective maturity.
1. AI enabled authoring:
Authoring contracts without a robust CLM solution is a bleak situation. Stakeholders either draft the contract from scratch or use an existing template. Both are highly time-consuming, error-prone, and risky, because the contract language is not standardized, and each step requires considerable manual effort.
A best-in-class contract solution can make this process a breeze.
Any decent solution should offer the basics: – Microsoft Word Plug-in, redlining capabilities, side-by-side version comparison ability, real-time collaboration and comprehensive templates, and clause libraries.
The MS Word plug-in gives your contract authoring teams a platform to collaborate and draft within the familiar MS Word interface. Real-time collaboration with version comparison and redlining allows them to track clause-level changes and collaborate in real time by exchanging information, adding comments and receiving replies. This cuts down on email back and forth and substantially reduces the time to churn out a contract.
2. Robust Storage and Search Capabilities:
Storing contracts for the sake of storage is not enough. To make the most of your existing contracts, you must be able to search for any contract-related information when needed.
A robust CLM solution intelligently captures metadata and aggregates all relevant contract information into one smart, centralized ‘searchable’ repository. This elevates contracts from simple documents to actionable devices.
The real test of a CLM repository is in its searchability and how quickly stakeholders can retrieve important data. An advanced CLM solution should be able to pull information directly from the repository to give you real-time, ad-hoc reports based on any contract field of your choosing.
Zycus’ enterprise clients are able to make the best use of their contract data with the help of Merlin Contract Discovery. Merlin automatically reads, extracts and interprets critical business information from large volumes of contracts and stores it away for future use. This enables contract teams to quickly retrieve and share business-critical information, compare and review specific contract details, and see detailed status overviews on a single platform.
3. Meaningful dashboards
Having contract data at hand is useful; having it in the form of meaningful, customizable dashboards takes it up a notch.
Your desired CLM software should allow you to publish customized dashboards with key contract metrics that matter to you. With this, all stakeholders can easily keep track of important contracting parameters and milestones, including obligations, contract utilization, and expiration and renewal dates.
With dashboards, key contract information can be at your fingertips, and it can help contract owners take timely action on business-critical items.
4. Powerful Security and Compliance
Having everything centrally stored and accessible at all times should not be done at the cost of security.
CLM solutions should ensure proper encryption of contract data, secure server locations, and most importantly, provide prevention against data loss and file corruption.
A good solution would ideally provide access-based controls, periodic automated data backup and single sign-on accesses for ease of access while ensuring the security of the data is not compromised.
Also, to protect sanctity the data’s sanctity, no data alteration should be possible without sending alerts/notifications to the relevant stakeholders.
5. Integration with business solutions and in-house tech stack
No technology is an island. Choosing a CLM solution or any other software must consider how well it will integrate with other business software and the existing technology portfolio in your organization.
Most vendors claim they can integrate with basic business solutions – but it is important to probe further and ask pointed questions such as – What would be the cost of this integration (time/effort/money)? Have they done it before? Will this integration be real-time or daily batch upload?
Integration with tools like Salesforce, MS Word, Outlook and basic legal software is necessary for all CLM solutions. For an enterprise-wide contract management tool, there should be integration with the sell-side (sales software, such as CRM) as well as the buy-side (procurement software, such as P2P)
6. Post-award analytics
Once a contract has been awarded, it is common to put it on the back burner or forget about it until it needs to be renewed or requires further action. This tendency can expose your organization to unnecessary and avoidable risks.
Once a contract is awarded – a proper SOP should be put in place to ensure that your business derives maximum return on investment from every agreement.
A CLM solution can be of great help here. It can generate periodic reports based on pre-defined business critical KPIs to keep all stakeholders informed on the progression of the contract with respect to compliance, obligations, revenue generated, efficiency and more.
Further, a dedicated analytics feature can help provide alerts and reminders for important milestones like renewals and expiry deadlines.
7. Risk Assessment
The world of contracting is rife with risk at every step, especially considering today’s uncertain geopolitical environment and the turbulent macroeconomic trends.
Your CLM solution should be able to help you navigate these turbulent times and be able to safeguard you against possible risks.
A best-in-class software should be able to identify metadata and clauses, benchmark them against your organization’s best practices, and highlight detailed review scores at the contract level. With this, you will have a keen insight into potential risks in the contract and relevant suggestions to mitigate them and achieve process compliance.
Conclusion:
While there is a world of other features in CLM software, the ones listed here are absolute ‘must-haves’ and should form the basis of your evaluation and selection.
If one were to go by the adage, ‘You can’t be fired for buying IBM,’ one could say that no one would regret or come under scrutiny for buying a CLM solution with these top 7 features.
