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(CLM) isthe proactive, methodical management of a contract from initiation throughaward, compliance and renewal. Implementing CLM can lead to significantimprovements in cost savings and efficiency. Understanding and automating CLMcan also limit organizational liability and increase compliance with legalrequirements.

The keysteps in the Contract Lifecycle Management (CLM) process:

1) Capture: Step #1 for most people is toget all of their existing paper contracts in a central visible place. If youhave no clear idea what contracts you have, then you have no idea what yourpotential risk exposure is. The next step is to capture the data from thecontracts.

2) Track: Once you know where all yourcontracts are, the next step is to track any important data so you don’t missany milestone. This affects both old contracts and newly signed contracts.

3) Author: With tracking in place, thefocus can shift to accelerating the new contract creation process. The“authoring” process is about setting up contract templates and clause librariesto empower business users and legal users, respectively, to create newcontracts in a fast but controlled fashion.

4) Create: Contract creation has twotracks. First, empowering business users with self-service, wizard-basedcreation using intelligent templates pre-approved by legal. Second, making lifeeasier for legal when drafting complex deals on your own paper, or reviewingand “patching” contracts negotiated on other people’s paper.

5) Approve: Companies need an approvalworkflow process to ensure that risky contracts are reviewed and approved bythe right person. Some risks need to be approved by legal, some by management,some by special departments like credit, etc. Ideally, safe deals arepre-approved.

6) Negotiate: The needs of the typicalnegotiator include: a checklist of issues for each type of deal; a way ofmarking up the paper to highlight how it’s different from the original or thelast draft; and a way of capturing and flagging those differences (ifpossible).

7) Sign: When the contract is final andagreed it needs to be signed by all relevant people, and the signed copies needto be stored. Someone also needs to validate that the final signed version wasnot modified in any way after execution copies were sent out.

8) Analyze: Enterprises with 100+ contractsneed to analyze those contracts for potential risks, rights & obligations.Executives, Legal and Risks need scanned reports to manage common risks, and adhoc reports for unexpected scenarios. “Fingertip access” to contract terms anddata allows people to react quickly to new scenarios and deal withtime-sensitive risks.