Contract Lifecycle Management (CLM)

The Contract Lifecycle Management (CLM) function enables the processes of creating, negotiating, and executing all of the legal obligations, contracts and agreements for an organization. It also encompasses the storage and analysis of these documents for reference by both business and legal personnel.

The various contracts necessary for acquiring new customers, known as sell-side, and the multiple contracts and working documents for managing vendors and suppliers, known as buy-side, are the typical subjects thought of when considering contract management. Additionally, contracts necessary in the day-to-day course of business operations such as non-disclosure agreements, leases, employee contracts, and more, must be managed.

All companies that have contractual agreements participate in the contract management domain, sometimes unknowingly, using various People, Process, and Technology strategies. Contract lifecycle management (CLM) is a category of technology that is designed to maximize contract visibility and automation.

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Key Quote to Cash Terminology

Quote

A commercial document that itemizes a transaction between a buyer and a seller (sometimes informally referred to as an Offer)

Contract

A formalized, executable agreement with specific terms between two or more persons or entities in which there is a promise to do something in return for a valuable benefit known as consideration

Agreement

A meeting of the minds, even without legal obligation

Proposal

An offer for consideration or acceptance

Offer

A promise made in such a way that another individual is justified in understanding that their assent to the bargain is invited and such assent will conclude the bargaining

Order

An object that represents a comprehensive set of data required for provisioning, fulfillment, invoicing, and other downstream processes

Invoice

A commercial document that itemizes a transaction between a buyer and a seller - typically includes quantities, prices, taxes, terms, and method of payment (sometimes informally referred to as a Bill)

Billing Statement

A periodic document that reflects transactions across that period, including new invoices and charges, payments, or adjustments to previous invoices, and typically provides a total balance due

Two Primary Types of CLM

All of these contracts can benefit from effective Contract Management
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IN OUR OWN WORDS
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"Many of our more mature clients have complex contract assembly requirements, extensive clause libraries, and require a sophisticated and tightly coupled integration between their selling (CPQ) and contracting (CLM) solutions. We encourage our clients to understand the holistic implications of this integration and how they must balance revenue goals with appropriate risk and compliance."


Ted Brookbank
Senior VP of Delivery at ATG

Contract Management Components

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Document Creation

Document creation is the process of assembling a contract, and typically involves combining a template of business and legal language with content specific to the obligations being agreed to by the parties involved. In some cases, document creation is the process of manually drafting the entire document.

Clauses Library & Templates

A clause library and templates enable an organization to create consistent contracts, reducing the need for close legal oversight. On the sell-side in particular, the effective management of clauses and templates improves the speed and quality of the sales and approval process while mitigating risk to the company.

Templates contain the standard language, placeholders for variable content, and any logic necessary to support conditional content, as well as the stylistic formatting of the document.

Clause libraries contain independent clauses that can be used by authorized users during contract creation and negotiation. For instance, a clause library will typically include legally-approved alternate language that can be used to replace a specific section of standard language in the template.

IN OUR OWN WORDS

"Clients have a wide range of contract generation needs from a simple table of line items with minimal legal language to a multi-page, highly complex set of terms and conditions with cross-contract dependencies in numerous localities. The contract template is much more than just the font, spacing, and numbering of the resulting executable. Now about that contract you want to be rendered in Klingon...."


Sharmon Moss
ATG Principal Consultant

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Redlining

Once the originator has officially offered a contract, any changes to the document by either party will result in readily distinguishable redlines. Contract management systems have various methods of tracking these redlines and their acceptance or rejection. Sell-side focused business often have documents such as master service agreements subjected to redlining.

Workflow

Contract management workflows are used to guide the contract through the standard and conditional paths the contract may take during the creation, negotiation, and execution process. For example, the workflow can guide any contract that the customer has redlined directly to legal for review. Contract management workflow can reside within a CLM tool, as an extension of configure-price-quote (CPQ) workflow, or via an enterprise workflow solution from a business process management (BPM) suite or document management tool.

Execution

Successful generation and negotiation of contracts result in execution. In most cases, execution occurs once both parties have signed the contract. Execution is often a milestone in the Quote-to-Cash process and may trigger provisioning, fulfillment and implementation activities.

Repository

Organizations typically store executed contracts in a secure repository which can ensure that authorized users only can access confidential content. The use of metadata tags relative to the content of the contract enables the discovery and retrieval of the contract for future purposes.

Discovery

The discovery capability enables users to search for existing contracts or content. An account manager may want to discover all of the contracts for an existing customer or a lawyer may need to discover any contracts that have an outdated clause and the respective customers.

Discovery conducted by businesses who have sell-side contract management needs typically fall into two categories.

  • The first type of discovery is to support revenue which involves searching for renewal, up-sell, and cross-sell opportunities that protect or enhance the company’s revenue position.
  • The second type of discovery finds service obligations to identify performance responsibilities that may be under or over-served to clients. Discovery is also commonly performed for other legal and compliance purposes.

Amendments & Renewals

Many businesses generate more revenue from and extend engagements with their existing customers than with their net new customers. This revenue stream makes the renewals a critical process, and the ability to process these essential transactions with visibility and the appropriate degree of automation is vital for a healthy business.

Amendments and renewals that require signature exercise many of the same contract management functionalities as net new contracts. Amendments and renewals often are generated using templates, may follow workflows, require execution and storage in the repository, and need to be discoverable.

IN OUR OWN WORDS
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"Corporate legal teams are often underserved during process and technology optimizations, but when ATG implements a CLM tool, the legal team receives a new level of automation, visibility, and overall document management agility. The levels of excitement and cooperation displayed by the legal teams I’ve worked with are unmatched, and it is so rewarding to be able to improve their day-to-day work experience!"


Gracie Sanford
Director, Partners & Alliances at ATG

Key Desired Benefits from CLM Tool

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People, Process, and Technology of CLM

People

Contract management is primarily the legal department’s responsibility, but sales, procurement, vendor management, and human resources are also heavily involved. In buy-side contract management, the legal department collaborates with the procurement department to verify that the corporate finance and risk outcomes are appropriately balanced. In sell-side contract management, the legal department confirms that contracts created by the sales department have appropriate risk mitigation and take into consideration any compliance requirements.

LEGAL

SALES

Product

CUSTOMER SERVICE

OPERATIONS

FINANCE

CUSTOMER SUCCESS

I.T.

Process

ATG maintains a set of 99 key business processes to support the management of customers and revenue for businesses. Thirty-eight of these processes originate or are impacted by the CLM function. Below are the key processes that touch Contract Lifecycle Man, categorized by the organizational unit that owns the process:

LEGAL

Contract Lifecycle Management

Contract Lifecycle Management (CLM) supports the process of negotiation, redlining, electronic signature, versioning, and storage of contracts.

LEGAL

Export Compliance Processing

Managing and adhering to the federal and international export compliance requirements.

LEGAL

PCI Compliance

Ability for customer to satisfy contractually obligated PCI requirements.

SALES

Cross-Sell Processing - Initial Order

Selling a customer an additional product or service from what they had originally requested at the time of ordering. This process is separate from Cross-Sell Processing - Ongoing.

SALES

External/Partner Transaction Management

Management and integration of any of third-party resellers/partner, or large enterprise customer, transactions that including selling, billing & collections, and account management.

SALES

Partner Ecosystem Management

Overall category for Management and integration of any of third-party resellers, partner, or add-on marketplace business models and oversight.

SALES

Quote - Product Configuration

Configuration of features and attributes of products and services prior to a sale. Typical in a custom solution environment.

SALES

Quote - Product / Service Discount

Configuration of product and service discounts relating to certain criteria (e.g. volume discounts, geography, trying to win the deal, etc.).

SALES

Quote - Product / Service Pricing

Configuration of features and attributes of products and services prior to a sale. Typical in a custom solution environment.

SALES

Up-Sell Processing - Initial Order

Selling customers a better product or service than they originally expressed interest in, at the time of order.

SALES / CUSTOMER SERVICE

Order Entry - Call Center (Inbound or Outbound)

Creating a new service for a customer originated by internal users such as an inside sales organization. Or a customer support group wants to create new orders for an existing customer. Includes capturing the necessary information to provision and bill for the service effectively.

SALES / CUSTOMER SERVICE

Order Entry - E-Commerce

Creating a new service for a customer, including capturing the necessary information to provision and bill for the service effectively.

SALES / CUSTOMER SERVICE

Order Entry - Partners

Creating a new service for a customer that is originated via a Partner Channel, including capturing the necessary information to provision and bill for the service effectively.

SALES / CUSTOMER SERVICE

Order Entry - SFA

Creating a new service for a customer originated by internal users such Customer Support or Partners, as a culmination of the opportunity, quote, contract, and order lifecycle.

SALES / CUSTOMER SERVICE

Renewal Processing

Methods used to renew a customer's services, may be manual or automated. This could apply to the renewal of maintenance and support for Perpetual products, or renewal of a subscription term for Cloud products.

CUSTOMER SERVICE

Cross-Sell Processing - Ongoing

A central method for increasing Average Revenue Per User (ARPU) and is the process of selling additional product(s) or service(s) to a customer during the customers' entire lifetime with your company. This process is separate from Cross-sell Processing - Initial order.

CUSTOMER SERVICE

Up-Sell Processing - Ongoing

A central method for increasing Average Revenue Per User (ARPU) and is the process of moving a customer to a better or higher version of a product or service throughout their lifetime with your company. This process is separate from Up-Sell Processing - Initial Order.

PRODUCT

Bundled Product Introduction Process

Configuring and introduction of a bundled product or service to the product catalog and supporting systems. Includes definition of product/bundle attributes, pricing rules (usage, recurring, non-recurring), discounts rules, product/service lifecycle, revenue recognition, and reporting attributes.

PRODUCT

Entitlement Processing

Management of active products and services within a customer account.

PRODUCT

New Pricing Introduction - Existing Construct

This process is for creation of a new pricing rate for an existing construct. For example, creation of a $24.95/mo. plan for a geography that previously had been at $27.95/mo.

PRODUCT

New Pricing Introduction - New Construct

This process is for creation of a new pricing construct for an existing product or service. For example, creation of a monthly subscription where previously there had only been annual.

PRODUCT

New Product Introduction Process

Introduction of a new product or service to the Product Catalog and supporting quoting, ordering, contracting, provisioning, ticketing, invoicing, payment, usage, and revenue recognition systems. Includes definition of product attributes, pricing rules(usage, recurring, non-recurring), discounts rules, product/service lifecycle, revenue recognition, reporting attributes, and bundling concepts.

PRODUCT

New Product Introduction Process - Mobile

Configure attributes and introduce new products and services, with specific focus on making the product available on mobile devices.

PRODUCT

Promotion & Discount Introduction

The configuration of standard, pre-defined promotions and discounts of products or services.

OPERATIONS

Quote - Product / Service Approval

Configuration of required approvals for products, services, discounts, and pricing configurations prior to the sale.

FINANCE

Credit Check Management

The process of verifying customer credit history, during new the prospecting process, new customer creation, or during the life of a customer.

FINANCE

Currency Conversion

The point within a multinational company's sales cycle where currency is converted. This conversion may occur at the transaction or during the commissioning process, and must be carefully monitored to ensure accurate conversion rate and payment amount, and to enable standardized reporting.

FINANCE

Revenue Recognition Processing - Contract Line Item Segmentation

Methods used to categorize contract items to ensure revenue is recognized properly.

FINANCE

Revenue Recognition Processing - Earned Trigger Processing

Method for appropriately triggering revenue recognition events.

CUSTOMER SUCCESS

Customer Usage Monitoring

Tracking and recording customer product usage throughout a billing period and life cycle. Closely related to daily usage processing, this process can be used by Customer Success agents to find customers who are experiencing problems with their product usage, are not using key functions of the product, or are nearing billing thresholds.

CUSTOMER SUCCESS

New Customer Onboarding

The process of creating a customer account, properly provisioning products and/or services, and communicating welcoming messages.

I.T.

Data Stewardship Across Monetization Ecosystem

Process of assigning ownership and sources of truth for data within the organization.

I.T.

Cross-Training of Monetization Ecosystem Components

Process for training organizational resources

I.T.

Maintenance & Oversight of Monetization Ecosystem

Process around assuring that all touchpoints and connections in the ecosystem are optimized and working to their full potential.

I.T.

Monitoring & Testing of Vendor Functional Releases

As ecosystem components release updates and patches, each is checked and tested to confirm all systems are working together as required by the business' requirements.

I.T.

Vendor Management of the Monetization Ecosystem

Management of ecosystem component vendors including proactive communication of changes and general relationship nurturing.

I.T.

Security Oversight of Monetization Ecosystem

Process for maintaining and controlling access and permission to ecosystem components.

ALL

Daily, Periodic, or Ad Hoc Reporting (ETL, Report, Dashboard)

Movement of data between domains to create a single source of truth for reporting and dashboarding. Includes key metrics such as revenue analytics and other KPIs

Technology

Numerous technologies have supported the contract management function for many years. Email routing, workflow-based contract management tools, and document management tools have all been part of an automated or semi-automated contract management toolkit.

Recently, the technology category of CLM has emerged and gained traction with many of our customers. We see the following CLM tools increasing their relevance to our customer base, and these tools have an emphasis on sell-side CLM.

Key CLM Vendors

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ESSENTIALS

Founded: 2005
HQ: Chicago, IL
Company Type: Privately Held
Website: www.docusign.com
Delivery Method: Cloud

OVERVIEW

DocuSign is a document management platform that provides highly scalable, secure, and reliable solutions. The platform can close business deals faster and make it easier for customers to work with you. When your documents flow, work flows. DocuSign has applications to perform document management and workflows; however, its leading application is for contract lifecycle management. DocuSign integrates into Salesforce giving users complete access to manage their documents.

PRODUCT & SERVICES:

  • Contract Lifecycle Management (CLM)
  • Document Management
  • Enterprise Content Management Platform

TARGET MARKET

DocuSign targets mid to large enterprise companies across many industries.

CUSTOMERS

  • Facebook
  • BlueCross BlueShield
  • ADP
  • Aetna
  • Cox
  • Inovalon
  • Compass
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ESSENTIALS

Founded: 2006
HQ: Broomfield, CO
Company Type: Privately Held
Website: www.getconga.com
Delivery Method: Cloud (Salesforce)

OVERVIEW

Conga Contracts, which merged with Apttus in 2020, streamlines and accelerates contract negotiations for sales teams, so they can close deals faster without leaving Salesforce. Key contract automation capabilities include a robust repository, granular security controls, flexible routing and approval rules, and reports that are automatically generated and emailed.

Conga Contracts bridges the gap between CPQ and eSignature, creating end-to-end contract automation with your existing solutions. Conga Contracts for legal and operations (formerly Novatus) addresses the unique and complex challenges of keeping business moving while mitigating risk to the company. The acquisition of Octiv will extend the Conga Suite by providing the ability to create, collaborate and manage web-based documents while measuring engagement throughout the lifecycle of a document.

PRODUCT & SERVICES:

  • Contract Lifecycle Management (CLM)
  • Electronic Signature
  • Business Intelligence

TARGET MARKET

Conga Contracts targets organizations in many industries. Target organizations are medium to large enterprises and are looking for a CLM tool in Salesforce for their sales team.

CUSTOMERS

  • Hilton Worldwide
  • Qualcomm
  • Sony
  • CDI Corporation
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ESSENTIALS

Founded: 1996
HQ: Palo Alto, CA
Company Type: Public
Website: www.ariba.com
Delivery Method: Cloud

OVERVIEW

SAP Ariba‘s platform includes a Strategic Sourcing Portfolio to manage the entire sourcing, contracting, and spend analysis processes for all types of spending, direct and indirect materials as well as services, all in one place. A component of this portfolio is SAP Ariba Contracts which provides enterprise-wide management of all contract functions (including the buy-side and the sell-side). A partnership with DocuSign delivers electronic signatures capabilities. A professional version is required to receive features such as contract authoring and integration with Salesforce.

PRODUCT & SERVICES:

  • Contract Lifecycle Management (CLM)

TARGET MARKET

SAP Ariba contract management targets many organizations, providing solutions to those who need buyer support or supplier support.

CUSTOMERS

  • Sitel
  • Groupe Auchan
  • Cirque Du Soleil
  • Dole
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ESSENTIALS

Founded: 1991
HQ: Latham, NY
Company Type: Privately Held
Website: www.ascnet.com
Delivery Method: Cloud or On-Premise

OVERVIEW

Advanced Software Concepts (ASC) Contracts software provides buy-side and sell-side contract management and contract lifecycle capabilities. ASC also provides web-based enterprise management solutions for documents, forms, and pricing and quoting. All ASC management software comprises automated document creation and a searchable repository or database with built-in reporting, compliance and audit trail capability.

PRODUCT & SERVICES:

  • Configure-Price-Quote (CPQ)
  • Contract Lifecycle Management (CLM)

TARGET MARKET

ASC targets organizations in many industries. Target organizations are any size, and ASC contract lifecycle management and business process solutions improve customer, vendor and supplier relationship and commitment management; simplify business processes; ensure compliance, reduce contract risks, and increase efficiency.

CUSTOMERS

  • Centurylink Business
  • International Card Services (ICS)
  • TMK IPSCO
  • Bell
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ESSENTIALS

Founded: 2015
HQ: Lehi, UT
Company Type: Privately Held
Website: www.concordnow.com
Delivery Method: Cloud

OVERVIEW

Concord is an all-in-one cloud-based contract lifecycle management platform. The Concord platform is designed to manage contract authoring, track approvals, enforce workflows, and audit contracts. Users can edit contracts through the cloud, and with the built-in e-signature functionality, contracts can be legally executed through the cloud as well. Concord integrates with various systems including Salesforce and Google Docs.

PRODUCT & SERVICES:

  • E-Commerce
  • Contract Lifecycle Management (CLM)
  • Electronic Signature

TARGET MARKET

Concord was built and designed so that corporations across many industries can benefit from its offering. Small to medium businesses may best utilize the Concord contract lifecycle management platform.

CUSTOMERS

  • Johnson & Johnson
  • Intel
  • Sony Music
  • Unesco
  • US Department of Transportation
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ESSENTIALS

Founded: 1999
HQ: Boston, MA
Company Type: Privately Held
Website: www.exari.com
Delivery Method: Cloud

OVERVIEW

The Exari Contracts platform is built to address the full spectrum of contracting challenges across buy-side and sell-side contracts. This platform includes a global repository, wizard-based document generation, workflows, and reporting using artificial intelligence. Additionally, Exari Contracts can translate legal terms into actionable data using Exari’s Universal Contract Model.

PRODUCT & SERVICES:

  • Contract Lifecycle Management (CLM)

TARGET MARKET

Exari Contracts targets organizations across many industries. Target organizations are typically medium to large enterprise sized businesses.

CUSTOMERS

  • The Linde Group
  • AIG
  • Lloyd's
  • USDA
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ESSENTIALS

Founded: 2009
HQ: Bellevue, WA
Company Type: Privately Held
Website: www.icertis.com
Delivery Method: Cloud

OVERVIEW

The Icertis Contract Management (ICM) platform has standard contract lifecycle management features and also offers specialized business applications to solve industry-specific problems. Leveraging ICM platform’s artificial intelligence and natural language processing, Icertis Experiences enables users to interact with the ICM platform in the applications where they spend the majority of their time. The ICM platform is used by more than 750,000 users in 90 countries and 40 languages, managing over 2.5 million contracts with a total value of $320 billion.

PRODUCT & SERVICES:

  • Contract Lifecycle Management (CLM)
  • Electronic Signature

TARGET MARKET

Icertis Contract Management targets enterprise organizations in many industries.

CUSTOMERS

  • 3M
  • A&E
  • Microsoft
  • Skullcandy
  • Neiman Marcus
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ESSENTIALS

Founded: 2013
HQ: San Francisco, CA
Company Type: Privately Held
Website: www.pandadoc.com
Delivery Method: Cloud

OVERVIEW

PandaDoc is a document-focused platform with native apps built to enable proposals, contracts, quotes, and electronic signatures. There are 21 integrations available within common customer relationship management systems such as Salesforce.

PRODUCT & SERVICES:

  • Configure-Price-Quote (CPQ)
  • Contract Lifecycle Management (CLM)
  • Payment Processing

TARGET MARKET

PandaDoc targets organizations across many industries that can benefit from fast and accurate proposals and quotes. PandaDoc Contracts may be best suited for mid to large enterprise companies.

CUSTOMERS

  • Inkit
  • Marketron
  • VerifiedFirst
  • Digital Brew
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ESSENTIALS

Founded: 1990
HQ: Redwood City, CA
Company Type: Privately Held
Website: www.agiloft.com
Delivery Method: Cloud

OVERVIEW

The Agiloft Contract Lifecycle Management (CLM) platform offers features in Sales, Procurement, and Legal. Targeted toward enterprise businesses, the software is fully customizable and flexible for seamless integration. Agiloft solutions is a low code-based implementation that has a fast deployment time while still maintaining full customization to fit exact customer needs.

PRODUCT & SERVICES:

  • Contract Lifecycle Management (CLM)
  • Customer Relationship Management (CRM)

TARGET MARKET

Agiloft Contract Management targets enterprise organizations in many industries.

CUSTOMERS

  • US Air Force
  • Charter Communications
  • American Hospital Association
  • NASA
  • Valero
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ESSENTIALS

Founded: 2015
HQ: Brooklyn, NY
Company Type: Privately Held
Website: www.litify.com
Delivery Method: Cloud

OVERVIEW

The Litify Contract Lifecycle Management (CLM) platform was designed for the legal industry's needs. The Litify platform has an all-encompassing system that allows legal teams to manage and generate documents. The flexibility of Litify’s platform enables standardization, Salesforce integration, customization, and easy connection to apps such as DocuSign, Vonage, Office 365, QuickBooks, etc. Litify has streamlined service to over 200 customers and has more than 27,000 users.

PRODUCT & SERVICES:

  • Configure-Price-Quote (CPQ)
  • Customer Relationship Management (CRM)

TARGET MARKET

Litify targets legal corporate legal departments and law firms of various types and sizes.

CUSTOMERS

  • Lynch Law Firm
  • The Ledger Law Firm
  • Johnson Firm
  • Morgan & Morgan
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ESSENTIALS

Founded: 2006
HQ: San Mateo, CA
Company Type: Public
Website: www.coupa.com
Delivery Method: Cloud

OVERVIEW

Coupa CLM provides a central resource for business spending activities such as procurement, invoice, expense, and payments. Coupa software can monitor strategic resources, contracts, supply chain decisions, treasury strategies and much more. The all-in-one hub offers a connected home for a comprehensive platform of applications and support.

PRODUCT & SERVICES:

  • Contract Lifecycle Management (CLM)
  • Business Spend Management (BSM)

TARGET MARKET

Coupa targets many different organizations in various industries.

CUSTOMERS

  • MGM Resorts
  • Groupon
  • Cooper Standard
  • NASA
  • Pearson
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ESSENTIALS

Founded: 1987
HQ: Alphen aan den Rign, Netherlands
Company Type: Publicly Held
Website: www.wolterskluwer.com
Delivery Method: Cloud

OVERVIEW

The The Wolters Kluwer Contract Lifecycle Management (CLM) Matrix platform allows for a contract consistency, searchable contract repository, compliant contract development, and streamlines workflow. Wolters Kluwer acquired CLM Matrix in May of 2015 for enterprise management which extended Wolters Kluwer into the legal enterprise management industry.

PRODUCT & SERVICES:

  • Enterprise Legal Management (ELM)
  • Electronic Billing

TARGET MARKET

Wolters Kluwer targets companies of various types and sizes.

CUSTOMERS

  • Nektar Therapeutics
  • Woodward Inc.
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ESSENTIALS

Founded: 2017
HQ: Tampa, FL
Company Type: Privately Held
Website: www.colabs.com
Delivery Method: Cloud

OVERVIEW

CoLabs is a holding company and software incubator that develops innovative, cloud-based solutions. In 2019, CoLabs launched IntelAgree a contract lifecycle management (CLM) software tool that uses machine learning and artificial intelligence to streamline buy and sell-side contracts. CoLabs partners with industry leaders and uses artificial intelligence and machine learning to address specific business challenges.

PRODUCT & SERVICES:

  • Contract Lifecycle Management (CLM)

TARGET MARKET

CoLabs targets legal teams that want to implore the use of AI/ML to negotiate contracts.

CUSTOMERS

  • Tampa Bay Rays
  • Tampa Bay Buccaneers
  • Tampa Bay Lightning
  • ChurnZero
  • Precision Medical Products

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