The contract lifecycle management (CLM) process

Contract Lifecycle Management (CLM) is a process that encompasses multiple key stages of the contract lifecycle. The core goal of CLM is to ensure that contracts are managed in the most efficient way that maximises value, reduces risk and ensures legal compliance.

CLM software brings consistency to contracting processes and speeds up the contract lifecycle. The software automates legal team’s manual tasks while empowering non-legal users to manage their contracts, without legal intervention.

Read on to learn who is involved in the CLM process, the contract lifecycle stages and what to consider when starting your CLM journey.
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Why do businesses use CLM processes?

Businesses adopt CLM processes to overcome contract challenges they face across the business. From contract visibility issues, to slow manual tasks, to communication gaps between teams.

Without a centralised system that provides full visibility of all contracts, businesses risk missing deadlines which can lead to unwanted renewals and compliance issues. Inefficient contract processes create bottlenecks that delay contract cycles. While poor communication between legal and commercial teams slow revenue generation and business growth.
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Who uses CLM processes?

Contract processes impact the entire business, but the tasks are often handled solely by the legal team.

To address this challenge, many businesses implement CLM software, which allows various departments to participate more actively in the contract process – often without needing the legal team's direct involvement.

For CLM processes to succeed, it's essential to gain buy-in from the entire business, even if they are not involved in all six stages of the CLM process.
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The 6 stages of contract lifecycle management process

1. Creation

Contract creation, also known as contract authoring, drafting or generation, is the first stage in the CLM process.

In the contract creation stage, parties collate the necessary information and documents to establish the terms and conditions, clauses and key dates for the new agreement. To save time, businesses may use a pre-approved set of templates, or a clause library, to make contract creation a less manual task.

When using CLM software for contract creation, pre-approved templates and commonly used clauses can be presented in an optimal way to make the creation process a quick task.

How you create the contract can vary on your chosen CLM solution. Summize has a decentralised approach to CLM, enabling the entire business to create contracts using familiar business tools.

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Using the likes of Outlook, Teams, HubSpot, Salesforce and Slack, both legal and non-legal users can create contracts in minutes using their library of pre-approved legal templates and content.
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2. Negotiation

After the creation stage, parties engage in negotiations to agree on the terms and conditions. This back-and-forth process often involves manual edits, redlining and suggested amendments, typically in Microsoft Word. This stage tends to be the most time-consuming, causing bottlenecks in the contract-cycle.

To speed-up negotiations, the best CLM software includes features such as AI-powered contract reviews and AI redlining. Such features reduce review and redlining tasks, making the negotiation stage faster and more efficient.

By implementing a CLM solution, the Digital World Class Matrix™ report revealed these companies can achieve 45% in operational efficiency gains in the negotiation and supplier contract creation process.

Summize’s AI contract review works directly in Microsoft Word and saves up to 85% of manual review time. The functionality highlights the contract’s key information and alerts you of any red flags.

Combined with Summize's AI Redlining (directly in Word), which redlines your contract and suggests missing clauses and corrections, legal teams reduce their time-consuming review tasks and accelerate the contract negotiation stage.
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3. Approval

The approval stage is when parties legally agree and sign the contract.

Within contract management workflows, the signing process often involves electronic signature tools. The best CLM software integrates with popular e-signature tools (Adobe Sign, DocuSign and Oneflow) eliminating the need to download, upload or re-save contracts. Everything is automatically synchronised between the e-signature tool and your CLM repository.
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4. Execution

After signing, the contract becomes legally binding, and the parties must adhere to the agreed-upon terms until the contract’s renewal or termination date.
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5. Management and renewal

After execution, the contract is managed and stored. CLM solutions often provide a secure and central repository, making it easy to find your contract.

Summize’s repository goes one step further. Simply search for any term, clause or renewal date across all your contracts, and view the results in a clear, organised list.

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And if you need to track a contract’s renewal or termination date? Summize’s CLM automatically extracts a contract’s key dates and syncs them to your Outlook or Gmail calendar, ensuring you won't miss a contract termination or renewal date.
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6. Reporting and analytics

Reporting and analytics, also known as contract auditing, is a vital part of the contract management process, often overlooked when first reviewing the best CLM software.

Using AI, businesses can use the reporting stage of the CLM process to extract relevant data from their contracts to spot trends and key insights. CLMs powered by AI, just like Summize, enable businesses to dive into their contract data to spot trends, key insights and revenue opportunities.
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Starting your CLM process

Getting started with a CLM process begins when choosing your CLM provider. As there are many CLM providers on the market, it can be challenging to understand which one is right for your business.

Consider the following CLM features and functionality:

• Integrations: Your CLM should embed contract workflows into your existing tech stack to enable a self-serve approach and easy adoption. Can your sales teams create contracts straight from HubSpot, Outlook, Teams or Slack? Can your legal team continue to review and redline in Word, just like they’re used to? And does your CLM provider integrate with well-known and secure e-signature tools?
• Artificial intelligence (AI): A leading CLM utilises AI across the contract lifecycle, from review to redlining to analysis. AI is vital if your business wishes to accelerate processes and automatically extract contractual information and data, minimising the need for human intervention.
• Rich data: A CLM tool should surface hidden data, allowing you to improve your decision-making with data-rich reports, analytics and key dates.
• Central repository: Your chosen CLM should offer a central repository for your agreements and related files accessible by a simple search, making contract data accessible to business stakeholders.
• Implementation: Your contract management process should be up and running in no time. Therefore, consider how long a CLM provider's implementation process is, and if your CLM provider prioritises your use cases to get you started sooner rather than later. Explore our CLM implementation best practices to discover the best approach.
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Choosing Summize for your CLM process

Summize’s integrated approach, present throughout all the stages of the CLM process, creates a more seamless user experience, ultimately maximising CLM adoption. This approach - integrated into tools including Salesforce, HubSpot, Outlook, Jira and Teams – is designed for the entire business to facilitate collaboration and to accelerate contract cycles.

Download our datasheet for a clear overview of the Summize decentralised approach to CLM.