What is contract management software- all you need to know

Contract Management Software – An Ultimate Guide

Contracts are no enigma to understand – two or more parties agreeing to common terms to do certain things that are enforced by law. 

Contracts have been in existence for decades and have always been an essential underpinning to operate a business efficiently. 

However, in today’s time, businesses are working around the clock striving for mushrooming growth. Relying on the antiquated and manual ways of managing contracts can no longer suffice the current business needs.

Why? Because –

94% of people say that human error impacts the contract process to some degree – adding risk, rework, delays, and costs. (Source)

Business success depends on its employees, partners, and customers. Contracts bind them together to function in tandem as per the contract terms. It plays a prime role in generating revenue, strengthening business relationships, and most importantly, ensuring business continuity.

With so much on stake, a small error in contract management can significantly impact businesses on a larger scale. After all, every avalanche begins with a snowflake. ❄️

The average Fortune 1000 company has between 20,000 and 40,000 active contracts. (Source)

More volume of contracts = Complicated contract management 📄

Don’t fret! A superhero is born to protect businesses from the downfall of poor contract management and bless businesses with a spiral of productivity and growth.

“There is no alternative to digital transformation. Visionary companies will carve out new strategic options for themselves — those that don’t adapt, will fail.” — Jeff Bezos, Amazon

Ladies and gentlemen! Presenting contract management software (a.k.a contract lifecycle management software). 

What is contract lifecycle management software?
Why do you need contract management software?
Who needs contract management systems?
What are the top contract management tools?
Key takeaways

What is contract lifecycle management software?

Also known as CLM  software, a contract management software redefines business relationships. It combines the strengths of digital technology and machine learning to manage the entire lifecycle of contracts end-to-end. 

It helps business teams to act fast, intervene timely, and make the right decisions.

It streamlines the contract management process, makes it error-free, increases compliance, mitigates risks, and liberates business teams from administrative tasks. 

Contract management systems also provide flexibility to expand features and integrate third-party tools like CRM, ERP, accounting software, etc., to accommodate the needs of business functions – for which it scores the brownie points.

“What gets measured, gets managed” — Peter Drucker

It also tracks and measures the contract KPIs and delivers the efficacy of contract management. It helps the contract managers to monitor the progress and accomplish objectives against contracts. 

Overall, contract management software acts as a guardian angel for businesses and is embraced by organizations with open arms.

The global contract lifecycle management software market is anticipated to grow at a CAGR of around 10.2% during the forecast period 2020 to 2027 and to reach around US$ 3.0 Bn by 2027. (Source)

Now, let us take a deep dive and understand the stages of an entire contract lifecycle.

What are the stages of contract lifecycle management?

1. Contract request

This stage sets the wheels in motion. A contract request is fed in the system where both parties (the seller and the buyer) clearly express their expectations. 

This is the foundation of contract creation. Make sure there is no gap and all the crucial information – pinning down on partner’s requirements, establishing goals, understanding the terms, and identifying key documents and supporting information – has been known.  

2. Authoring

Once the tone is set in the previous stage, it is now time for contract creation. In this stage, the terms and conditions and clauses are written for a new contract. 

This stage also involves constructing templates and a clause library. This enables users to quickly find a perfect fit from the contract templates based on the contract type.

Read: Critical contract clauses that you need to know better

3. Negotiation

Here the parties negotiate the terms laid out in the authoring stage and vacillate back and forth redlining the document. This stage brings clarity where both parties come to a common understanding and set the right expectation.

Quick Bite: Redlines are adopted from proofreading hard-copy documents and marking the changes with red pencils. The same concept is used by contract management software to highlight the changes that can be viewed by both parties.

Contract management software also facilitates versioning or version control. It automatically creates a new version of a document whenever there are edits. It helps the team to track down the latest document and work on it.

4. Approval process

Once the contract is revised based on the new agreements and negotiated terms, it is sent for internal or external approvals.

5. Execution

The deal gets sealed in this step, and the contract comes into effect after both parties sign it.

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6. Storage

Businesses also need to store contracts somewhere and maintain a contract repository for easy search, track, and retrieval of all the contract data. 

A smart contract management software indexes the documents with the respective metadata for document retrieval.

It also comes with Optical Character Recognition (OCR) capabilities to convert PDFs and images into rich text documents.

Quick Bite: Metadata is the description of stored contract data.

7. Compliance

Compliance implies that the parties comply with all the terms explained in the contract, along with the rules and guidelines set externally by the government, industry associations, and other ruling bodies.

8. Audit and reporting

A contract management system provides an audit trail and records all contract-related information – who touched the records and when, who made the changes, etc. This information helps to identify the bottlenecks and compliance issues and take action if a contract is litigated. 

Most importantly – it always keeps businesses audit-ready.

Quick Bite: The audit trail is a log of all the changes in chronological order that have been made to a database or file.

9. Review and amendments

In this stage, reports are reviewed to check on a contract’s progress and identify if it demands amendments. It helps to proactively work on the changes and make informed decisions well before the contract renewal date.

10. Renewals

This is the last stage of the contract lifecycle which decides the fate of the contract – whether to terminate it, renew it, or create a new contract. A contract management software solution notifies the users well in advance through automated alerts for deadlines and renewal dates. 

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Why do you need contract management software?

Contracts have always been an innate part of organizations. 

But, with increasing business complexities, the advent of subscription economy, demanding customers, and businesses being neck-deep busy to accomplish goals, sluggish and old ways of managing contracts manually with Microsoft Word or PDF, emails, and spreadsheets becomes a big bottleneck to an organization’s success.

The below points make a strong case why businesses should ditch manual contract management and go the contract management software way.

Benefits of contract management software

Complete control and visibility

Manual ways are often unorganized where the files or multiple copies/versions of files are randomly stored in physical cabinets or personal drives of contract managers. This clutter of files becomes unmanageable to track and becomes worse if the contract manager leaves the organization leaving the team in chaos.

Organizations save 20% of research time with a contract repository. (Source)

A contract management platform provides a centralized contract repository which enables teams to – 

  • Access up-to-date contract templates, clauses, and contract data
  • Work on the latest copy of contract through version control feature
  • Searching for relevant information in a fraction of seconds

Cost savings

Incomplete visibility of contracts can result in unintended contract terminations and renewals. 

A contract management system streamlines the business processes and empowers organizations to create, amend, or renew contracts within the timelines, and make informed decisions. 

Eliminating inaccuracy and non-compliance can mean 33-41% of cost savings. (Source)

Audit ready – always

Audit trails take off the painful and strenuous task of manually investigating and finding the loopholes and streamline the audit process. With audit trail functionality, the entire contract history can be accessed in a few clicks. It brings efficiency and accuracy throughout the business.

Risk mitigation

A contract management software leaves no room for ambiguity. It equips businesses to run a contract management process smoothly. It brings uniformity and enables them at each stage through analytics, artificial intelligence (AI), templates, notifications, etc. This significantly reduces the risk factors and prevents businesses from landing in trouble. 

Compliance

With multiple teams working in silos, it becomes almost impossible to bring everything together to common standards. Organizations often overlook this part and do it offhand. 

Non-compliance costs 2.71 times more than the cost of meeting compliance requirements. (Source)

Automated workflows

Contract reviewing and approvals are crucial steps in contract management. But, manually tracing contract approval workflows is challenging and not scalable, especially when an organization deals with a copious volume of contracts. 

No clear visibility in the approval process can lead to delays and eventually losing out a golden opportunity.

A contract management software offers customized approval workflows and automation to speed-up the entire process. It gives a bird’s eye view of approval workflows – who has reviewed it, where it is stuck, and by whom – and helps to take relevant measures. 

E-signature

Waiting for the parties to be physically present and wasting time over wet signatures is a practice of the past. The manual signing of documents provides no security and safety since paper documents can be easily accessed and forged. Costs associated with paper-based processes also add to the woes. 

To cut down on all this, many contract management systems offer an in-built electronic signature feature. Some even provide flexibility to integrate a third-party e-signature software.

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Collaboration

Contract management solutions facilitate teams to collaborate in real-time and save them from never-ending and confusing email threads. 

Who needs contract management systems?

Who needs contract management software?

The features and user-friendly functionality of contract management software make it a perfect partner for most business function teams in an organization.

Human Resources (HR)

A contract management solution helps HR departments to streamline all their contract-related jobs – 

  • Creating employment contracts and obtaining electronic signatures 
  • Managing contracts with third-party recruitment agencies 
  • Extending the employment agreement for contractors, etc. 
  • Timely reminders to prepare in advance 
  • Integration with Human Resource Information Systems (HRIS) to improve the efficiency of HR operations

Finance

Contract management software empowers finance teams in many ways. It helps to –

  • Keep a track of contracts
  • Create triggers for approval workflows to ensure that all crucial documents are sent for review before signing
  • Track renewals
  • Identify cost-saving and revenue opportunities
  • Keep a tab on vendor payment

Sales

Sales teams are always on the run to bag new customers or projects. Contracts are an integral part of the sales process. It is how the sales teams clinch the deal. Any obstacle in the contract process can impede them from achieving their sales target.

65% of people say that their contract process has caused delays in closing deals. (Source

A contract management software is ‘the necessity’  for sales teams. 

Integration with other CRM tools like Salesforce allows them to manage the entire sales process end-to-end.

Read: Sales Contracts Guide – Contract Types and Parts of a Contract

Marketing

Marketing teams often work with media, PR agencies, gifting vendors, and event marketing companies. Some organizations even outsource their designing work to creative agencies.

In such cases, it becomes extremely important to write down contracts with agreed terms and conditions, monitor the vendor service, and renew, revise, or terminate the contracts accordingly. The marketing team achieves all this with the right contract management system.

Procurement

Procurement teams play a key role in supply chain management. Their prime job is onboarding suppliers, hand-picking the best goods and services, and timely procuring them. This can only happen once the vendors are selected, negotiations are done, and the contracts are signed. 

Manual processing of contracts can result in longer lead times that can disturb inventory management and business operations. 

Also, procurement teams deal with multiple vendors at any given time. Manually monitoring each contract,  seeking approvals, tracking the renewal dates become a laborious task and also leave room for mistakes. 

Procurement teams get highly benefited from contract management software. It provides clear visibility over contracts and suppliers, reduces lead times, increases transparency, and boosts productivity. 

Read: 10 Must-Have Documents to Secure Your Procurement Process

Legal

Legal teams can never escape contracts. They play an instrumental role in managing risks and ensuring conformity. From negotiations and drafting to approvals, legal teams are involved in each stage. 

Contract management software helps the legal teams to accelerate their contract process with ready-to-use contract templates and clause library. It provides real-time insights to monitor the progress of contracts and intervene at the right time.

To sum up, contract management systems are beneficial to all businesses – small, medium, or big. It gives them speed, automation, and seamless processes – all that is a must to succeed in today’s fast-paced digital world.

What are the top contract management tools?

Today, many contract management software are also available as SaaS platforms to match the business and pricing demands of all types of organizations. 

It allows businesses to thrive on the capabilities of contract management software while bringing down their IT-related operational and maintenance costs.

Here’s our list of best contract management tools –

Revv

Packed with advanced features, Revv is one of the best contract and document management software in the market.

It offers –

These features make Revv an all-in-one platform with a user-friendly interface to manage contracts.

Revv offers both monthly and annual billing. The annual plans can lead to savings of up to 20%. Here are its three pricing plans based on monthly billing –

  • Basic – free plan
  • Pro – $19/month for up to 10 users
  • Pro plus – $59/month for up to 50 users

All paid plans include unlimited users, unlimited documents, unlimited downloads, 24×7 customer support, and dedicated onboarding.

Find here details about Revv’s pricing plans.

Agiloft

Agiloft is a contract and commercial lifecycle management (CCLM) software that assists organizations to optimize value-creating activities through contracts. Agiloft is available for both cloud service and in-house deployment.

It offers –

  • Contract repository
  • Template and clause libraries
  • Automated approval workflows integrated with email and text alerts
  • E-signature with Adobe Sign and DocuSign integration
  • Customized reports and automated alerts
  • Integration to ERP and CRM systems
  • Custom dashboards to track KPIs

Agiloft provides multiple pricing options – free, professional, professional extended, enterprise, enterprise extended. There is no fixed price on paid plans. Each package can be customized based on requirements and budget.

All plans are dependent on the number of users and charge $65 per user per month. 

Concord

Concord provides a lot of flexibility and you can set it up within minutes.

It offers –

  • Template building and clause library
  • Real-time editing & redlining
  • Automated versioning
  • Private/public chat & commenting
  • Automated approval workflows
  • E-signatures
  • Full audit trail
  • Storage system
  • Automated alerts
  • Integration with Salesforce, Google Drive, SSO, DocuSign, Dropbox, and box

The pricing of each package is based on the number of users. Here are Concord’s pricing plans –

  • Free 
  • Standard – $339 per month for five users and afterward $17 per additional user
  • Pro – $419 per month for five users and afterward $34 per additional user
  • Enterprise – Get a custom quote

PandaDoc

Pandadoc is both a contract and document management platform with a multitude of features to process end-to-end contract management.

It offers – 

  • Contract templates
  • Rich editor
  • Pre-approved clause library
  • CRM integration
  • E-signature
  • Automated approval workflows
  • Redlining
  • Centralized storage
  • Collaboration with in-line commenting and document chats
  • Payment processing
  • Real-time notifications

When it comes to pricing, PandaDoc offers both monthly and annual plans. The annual plans can lead up to a saving of 24%. The following plans are based on monthly billing – 

  • Free 
  • Essentials: $25 per month per user 
  • Business: $59 per month per user 
  • Enterprise: For businesses that require more capabilities, PandaDoc offers a customized solution and package. 

Pandadoc provides 24/7 email and chat support on all paid plans.

ContractWorks

ContractWorks is a user-friendly and customizable contract management software that is also easy to set up.

It offers – 

  • Document templates
  • Customizable form fields
  • Secure contract repository
  • Smart document tagging
  • OCR and advanced search capabilities
  • Audit trail
  • Electronic signature
  • Unlimited alerts and notifications
  • Customized reporting
  • Permission-based user roles
  • Salesforce integration

ContractWorks provides three pricing plans. All plans offer unlimited users, but with a cap on the number of documents for each plan.

  • Standard: $600 per month for 2,500 documents 
  • Professional: $800 per month for 10,000 documents 
  • Enterprise: $1,000 per month for unlimited documents 

Outlaw

Outlaw’s contract management system is packed with a good set of features and AI-driven analytics.

It offers –

  • Pre-vetted dynamic templates
  • Redlining and version control
  • Built-in dynamic clause library
  • Automated workflows
  • Analysis and reporting
  • Tracking
  • Third-party integrations (CRM, ERP, etc.)
  • Dynamic fields
  • Real-time updates and notifications
  • AI-powered OCR
  • Personalized saved searches and dynamic foldering
  • E-signature

Outlaw comes with two pricing plans and offers both monthly and annual billing. The annual billing can save up to 20%. 

The plan divides users into two types – core users and collaborators. Core users own the account with complete control of templates, reports, and teams. The collaborators are active users and signers who can draft, collaborate, and manage contracts but cannot edit templates.

The payment plan starts with a core user. Later, the collaborator seats can be added to the plan once there are more than five core users. The following pricing is based on the monthly billing –

  • Core users – $125 per user per month
  • Collaborators – $60 per user per month

Outlaw provides onboarding and customer support services for plans having more than five core users.

Please note that all the above-mentioned information is taken from company websites, comparison websites such as GetApp, G2, Capterra, and others. Since companies keep adding features, some of the information may be out of date. Let us know at support@revv.so if there’s any information here that needs change, we’ll verify and update as quickly as possible.

Key takeaways

Contracts are the building blocks of businesses. But poor management of contracts can leave organizations clueless and perplexed and cause serious ramifications impacting business growth. 

A smart contract management software brings a systematic and standardized approach to manage contracts through automation, artificial intelligence, and advanced functionalities.

“It’s no longer the big beating the small, but the fast beating the slow.” — Eric Pearson, CIO, International Hotel Group (IHG)

Don’t let unorganized contract management slow down your business.

Find and implement the best CLM software based on your business needs, and,

Get, Set, Go!

Need assistance in managing contracts?

Reach out to us at sales@revv.so

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Seema

Seema

Seema is a Product Expert at Revv. She believes in the power of words and storytelling. She spends most of her time in creating exciting and knowledgeable content. When not working, you can often find her watching adorable pups videos, dancing for no reason, or experimenting with recipes.

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