10 CLM Best Practices for Digital Contract Transformation – Part 2
By David Parks
This article is part 2 of our top 10 CLM best practices for digital contract transformation series. Hopefully, you’ve already read part 1. It covered best practices 1-5. This one looks at 6-10.
In part 1 we discussed how important it is for every business to have an effective and digital approach, solution, and process for its contract management. Contracts are the backbone of your organization and play a huge role in your successes and failures. Part 1 also looked at the concept and importance of digital contract transformation (DCX) and why it’s a critical foundation for an enterprise’s broader digital transformation strategy. Adopting contract management software is key to digital contract transformation.
So, let’s look at the next 5 CLM best practices and how they help you achieve your digital contract transformation to better reduce risk and uncover hidden opportunities in your contracts. Once you begin implementing these in your business, you’ll see immediate benefits in your buy-side and sell-side contract lifecycle management.
Download our whitepaper Top 10 Best Practices for Contract Management for a more in-depth read of the complete list.
1. Streamline Approvals with Automated Notifications and Electronic Signatures
Securing contract approvals is usually one of the slowest parts of contract management. That’s why a key part of any digital contract transformation is about automating and digitizing the approval process. This helps speed up your approvals it two main ways.
First, when a contract is ready for approval you can automate email notifications to be sent to the approvers alerting them they need to sign. Second, you can use e-signatures to get documents signed electronically from any device anywhere in the world in minutes. Another advantage is increased security because e-signatures carry a digital record about who, when, and where a document was signed.
2. Leverage Role-Based and Feature-Based Permissions for Greater Security
Another CLM best practice is ensuring that people in your organization have appropriate access to contracts and parts of the process. With Contract Logix’s contract management software, you can set role-based and feature-based permissions for enhanced contract security and compliance.
Setting up role-based and feature-based permissions is easy and prevents unauthorized users from seeing or editing specific contract details. For example, you may not want anyone on the sell-side of the business to see contracts executed by procurement. Or perhaps you only want to give “read-only” users access to specific parts of the process.
3. Create Dashboards and Custom Reports to Get Real-Time Insights
Reports and dashboards are key for measuring the success of your contracts and tracking productivity so you can refine and optimize your process. You’ll want to ensure that you can generate reports that provide real-time visibility into your contracts, processes, and associated risks. And dashboards take your valuable report data and present it in a graphical, user-friendly format. This will give you actionable insights to make data-drive business decisions, establish benchmarks, and track KPIs.
For more on how to deliver data-driven insights, download our Essential Guide to Unlocking the Power of Your Contract Data eBook
4. Establish a Standard, Simple, and Online Contract Request Process
Relying on email, voicemail, or hallway conversations to request contracts and capture the info necessary to create them usually results in incomplete or incorrect data. This manual approach is eliminated with contract management software which saves time and reduces the risk of inaccuracies. An important CLM best practice is to establish a standard and easy-to-use process for intaking contract data digitally. This lets your team accurately submit existing contracts, request new ones, and if they have the authority, instantly create a contract themselves. And the best part is it’s all done right in the software.
5. Keep a Full Audit Trail for Compliance and Regulatory Requirements
When you have a decentralized, spreadsheet-based, and/or shared folder-based contract management solution it makes it really hard to create an audit trail. This aspect of contract management is especially critical since the enactment of the Sarbanes-Oxley Act and other industry specific regulations like HIPAA or PCI.
Having a centralized and digital contract repository with complete audit trail data and auditing capabilities tied to each agreement is critical for digital contract transformation. Our contract management software provides the functionality to capture and store full contract history data such as edits, updates, logins, and user permissions. And automated alerts and process workflows make preparing for an audit more routine and less rushed and stressful.
Without an effective contract management strategy and solution, it’s hard for any business of any size to be successful. By implementing the 10 CLM best practices in this 2-blog series, you’ll be on your way to achieving a streamlined and automated approach to digitally transforming your contract lifecycle management.
If you’re interested in seeing how our contract management software can help your business, let’s start a conversation today.