Steps involved in Contract Lifecycle Management
Contract Lifecycle Management (CLM) essentially means that contracts or agreements and relationships between organisations are efficiently handled by carefully planning all phases of contract management that lead to the reduction, removal or mitigation of financial, legal and procurement risks. Although it may be enough for businesses with just a small number of contracts to deal with a simple contract database or contract archive, more fully featured CLM systems incorporate substantial features and functions to better handle what is an increasingly complicated and vital environment for many businesses.
Stage 1: Contract Request
Contract LifeCycle Management begins with the Contracts Requesting process where the contractual process is requested or initiated by one party and then uses that data to draught or author the contract document. This is typically the first step of Contract Lifecycle Management.
Stage 2: Contract Authoring, Review and Red lining, Contract Negotiation
A contract or agreement document is created or produced in the Contract Authoring or Drafting stage. This contains all clauses, terms and conditions. Contract approvers and signing parties are usually decided at this stage and approving and signing details are recorded in the contract document.
Stage 3: Approval and Lawyer or Legal Review
The Agreement Document prepared in the previous step will be sent to internal or external approvers and the Contract Document shall be passed to the next step in the life cycle of the CLM until they have approved the document to progress further.
Stage 4: Execution or Agreement Signing
Contract document which is approved is sent to respective stakeholders for authorization either online or using offline processes.
Stage 5: Contract Database or Repository Storage
When the legal document is signed, it is permanently stored in an agreement archive that is easy to retrieve. For future reference, all contractual meta data and documents are indexed and saved.
Stage 6: Records Management
Via secure storage of records with backups and preservation policy enforcement policies, this stage allows full control of all sensitive business documents, giving assurance that the critical records are safe for highly compliant global information management.
Stage 7: Easy Search and Retrieval
This stage allows company users to search, apply filters and retrieve relevant documents from the contract system quickly.
Stage 8: User Activity and Reporting
For easy retrieval, each stage collects user activity logs and the contract meta data and documents are properly indexed. This stage guarantees that business users can retrieve and mine contract data easily and reliably and generate in-depth reports.
Stage 9: Contract Renewal , Amendments and Disposition
It must be renewed to remain in active status until the contract hits its expiration date. If the contract is not renewed on time, it will trigger financial damage to the parties involved in the contract.
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