What is contract lifecycle management? The lifecycle of the typical contract begins with initiation and creation and moves through subsequent stages of negotiation, approval, execution, and management. Most organizations that operate on a contractual basis can benefit from taking a procedural approach to contract management that is supported by compliance automation.
Almost every contract starts with a request for an agreement to govern the provision of goods or services. Once a contract has been drafted, the terms may be open to negotiation. The offeror typically administers systems for issuing, managing and storing contracts.
Contract management systems are useful throughout the contract lifecycle, from providing resources for contract creation to facilitatingredlining. Compyl provides solutions that ensure all parties are working from the latest version of a contract, send out notifications automatically and support integrations.
A system for managing repositories and promoting compliance makes contracts easier to reference and review. Automated resources can also make it easier for offerors to keep track of amendments, issue reminders for milestones or renewals and streamline management across the contract lifecycle.
Contract lifecycle management can be broken down into linear stages. While the number of stages varies between models, there are six general stages in the lifecycle of a contract:
The first three stages take place before a finished contract exists, while the last three occur after an initial contract has been finalized. A number of tasks and workflows take place at each stage of the lifecycle.
Initiation involves a request for a contract and starts the process of evolution from a verbal or informal agreement to a formal, written agreement. Contract creation can involve the use of templates but may involve drafting original terms. Negotiation entails communication about a contract that could result in revised terms.
Once the terms are settled, a contract is ready for approval. This stage often involves obtaining the signature of one or more offerees. The following stages entail ongoing compliance with the terms of a contract, making approved amendments or changes, marking milestones and managing renewal.
The need to manage the lifecycles of numerous contracts simultaneously poses a number of challenges. Such areas of concern typically arise around trigger events such as generating, changing, renewing or canceling contracts.
An ongoing contract lifecycle challenge involves accessing the relevant version of a contract. Whether a contract is still under negotiation or has been approved, offerors should use systems that are capable of identifying the current contract. A version history is also helpful for tracking changes and generating audit trails.
Other challenges can arise with regard to issuing timely responses to trigger events. Whether an offeree requests changes or needs to renew or cancel a contract, an offeror should be able to respond quickly in accordance with the contract terms.
Organizations that automate most aspects of contract lifecycle management typically find it easier to observe best practices. This includes organizing contracts in a repository in ways that make it easy to locate the most relevant forms for individual agreements.
Periodic internal audits can identify potential issues and enable offerors to take proactive measures to achieve compliance. It is also a good practice for offerors to regularly review performance. The accessibility of dashboards that increase visibility and the availability of data analytics can help organizations identify and implement best practices for managing contracts.
Automation can be especially beneficial for renewal, from notifying offerees about contract milestones and renewal dates to approving renewal agreements or processing cancellations. Should the terms of a contract need to change, contract lifecycle management best practices can smooth the way and make it easier for offerors to fulfill revised obligations.
Some of the most frequent follow-up questions to “What is contract lifecycle management?” involve protocols for managing contracts. An all-in-one compliance automation and information security platform is the best way to put protocols in place for managing every stage in the lifecycle of contracts.
Implementing contract management protocols can be as simple as using Compyl to create contracts, facilitate negotiation, streamline agreement and support continuous compliance. The ability to securely store, manage and review contracts sets any organization on the path toward observing best practices for managing contracts.
Protocols for contract management can also vary based on regulatory requirements. Some types of contracts are subject to specific privacy and security frameworks. Compyl enables organizations to proactively monitor systems for compliance with relevant frameworks while also optimizing internal operations.
Organizations that use Compyl to manage contract lifecycles have access to the latest technology for automating workflows and maintaining rigorous information security standards. On the other hand, setting up internal, on-site systems for contract management can be very costly and complex, particularly for contracts that are subject to regulatory requirements.
Compyl provides out-of-the-box support for contract management. Stakeholders can set up this platform to meet the requirements of every stage of the contract lifecycle. From more efficient management of existing contracts to a streamlined system for making new agreements, Compyl provides a full range of customizablecompliance and securityfeatures.
The best compliance platforms offer support for integrations that can come into play at various stages of the contract lifecycle. From e-signature services to access to contracts initiated on other systems, organizations can use Compyl to optimize the initiation, creation, negotiation, approval, execution and management of contracts.
Automating contract management is the best way to promote conformity and efficiency throughout the lifecycle of every contract. An all-in-one compliance automation platform offers ready solutions to any challenges that arise when answering the question of what is contract lifecycle management in the context of a particular organization. Compyl provides solutions for streamlining every stage of the contract lifecycle, expediting decision making and raising retention.Request a demoto see how Compyl facilitates comprehensive contract lifecycle management.