EBOOK

CLM 101
A Quick-Start Guide to Contract Lifecycle
Management and Its High-Impact Value
 Why contracts? As we illustrate below, contracts touch every part of an organization’s
value chain. From demand planning to compliance; from pricing to shipping and routing;
from channel management to profitability—these strategic documents define what you buy,

CLM 101:
what you sell, and how you run.

By digitizing contracts on a single, organization-wide platform, companies can gain full

visibility into every contract in their organization. This empowers even the biggest operations

Why CLM
to quickly understand and leverage all their commercial relationships—from seeing how many
open contracts they have with a particular supplier, to actively mitigating risk, to identifying
opportunities for better commercial performance via rebates, service bundling, and other
contractual entitlements.

Has Become Indeed, if contracts touch every aspect of a business, CLM drives speed, performance, and
compliance into those systems and processes.

a Must-Have Contracts touch all aspects of a business

Contract lifecycle management (CLM) is Demand Planning

Price Optimization Packaging
Efficient Customer Churn & Inventory &
a relatively new software category that is & Forecast Routing Sentiment Analysis Stock Out

experiencing explosive growth. If you’re not

familiar with CLM, don’t worry—you’re not
alone. By accessing this introductory guide,
you are joining a groundswell of interest Purchasing Traceability Compliance IoT Monitoring Offers & Bundles

around this game-changing technology:

Gartner reports continued year-over-
year growth in inquiries about CLM as
contracts emerge as a critical component
of companies’ responses to ongoing
commercial disruptions.

Channel Mgt | Merchandising | Price-Discounts-Promos | Inventory | Orders-Fulfillment | Profitability-Margin

1 Many of Your Most Pressing Business
Problems Are Actually Contracting Problems
The first question any technology buyer should ask is: Why do we need it?
For CLM, the typical answer might revolve around the need to accelerate
contract turnaround times or improve access to executed documents. PROBLEM SOLUTION
Those are both valid goals—yet don’t reflect the reality of many CLM
adoption stories.
Accelerate supplier
In truth, many organizations that have adopted CLM did not set out to solve onboarding through
High-friction supplier
what’s traditionally thought of as a “contracting” problem. Rather, they automated workflows and
onboarding and
invested in CLM after realizing that some of their most complex business guardrails that don’t
collaboration
challenges—supply chain agility, commercial performance, enterprise risk— need heavy involvement
were actually rooted in contracts. from legal and finance

For example: One major American electronics retailer needed to find a

Inability to assess supply Gain full transparency
better way to manage its rebate and promotions programs. After consulting
chain for risks associated into whom your company
with an IT advisor, it realized that contracts were the single source of
with disruptions or is buying from and on
truth for all of its commercial agreements with electronics manufacturers.
unethical what terms, through
Through CLM, it was able to digitize, accelerate, and optimize the post-
sourcing processes contract visibility
sale settlement process—allowing its staff to spend the holidays with their
families rather than their contracts.
Track contract fulfillment
Inefficient, dynamically and in
underperforming real time to ensure the
business relationships intent of every contract
is fully realized
2 CLM Goes Well Beyond eSignature and
Document Storage

Next, let’s briefly discuss what CLM is not.

CLM is not a fancy name for eSignature or a contract

repository. Though signature and post-execution reference Contract optimization, proactive suggestions
are critical components in the contract lifecycle, they 5 Proactive
Business solutions—revenue and cost impact
only scratch the surface of the value that ever-evolving
CLM technology can deliver to your organization.
Risks, Risk, compliance, deviation analysis, obligations management
4 Negotiations Organization-wide systems integration: buy/sell/ERP
CLM is a technology that automates the
entire contract lifecycle, from initiation through Governance, Self-servicing, clause library, dynamic assembly
execution and performance to renewal. With CLM 3 Compliance All contract types and company-wide deployment
your organization can increase efficiency, empower
your sales team to close more deals, enable faster Contract
Create & Request process, full automation and visibility
onboarding of new suppliers, accelerate time-to- Management 2 Search Template management, workflow, control & governance
revenue, and extract the data you need to optimize Maturity
contract renegotiations.
Model Electronic repository with basic search
1 Sign & Store Simple create and store capabilities
All too often, companies opt for a rudimentary
system only to realize after deployment that it Don’t get stuck at level 1 with a solution with limited functionality!
can’t scale with their need—forcing them to Start with an enterprise-ready system that allows you to start fast
select and train on a new solution down the and scale smart with your business.
road as they recognize the demand for more
mature processes.
3 CLM Delivers Analytics Speed

Speed, Performance,
and Compliance
Across the Entire Earned Value Costs

Contract Lifecycle
The features provided by a best-of-breed contract management
platform will enhance the contracting process at every stage of
a contract’s lifecycle, from structuring and signing to dynamic
obligation management and advanced analytics: Compliance Risk Mitigation

CLM Success Stories

70% Faster Contract Turnaround End-to-End Obligation Compliance Faster Contract Turnaround Reduced Contract
Integration into point-of-sale Cognizant is now 94% compliant AbbVie Canada reduced contract Administration Cost
systems increased velocity and with obligations in contracts cycle times by 92%, speeding the Microsoft’s Enterprise Volume
created a single source of truth managed within Icertis Contract company’s time-to-market with Licensing department reduced
for tens of thousands of supplier Intelligence (ICI) thanks to visibility life-saving medication. contract administration costs
agreements. and ease of use for business users. by 50%.
 CLM Directly
As you consider adopting CLM in your organization, it’s important to remember that

4 the benefits are not confined to improved contract processes themselves; rather they
extend into the business, with direct impact on the bottom line in the form of both
missed savings on the buy side and missed revenue on the sell side.

Impacts the Contract administration in and of itself is labor-intensive and expensive without
automation. Digitally transforming your contracting processes with CLM can reduce those

Bottom Line
costs 25% to 30%.

But on top of this, without the automated oversight of contract clauses that a CLM platform
can provide, the costs of noncompliance—the difference between what is actually in a
contract and what happens in the real world—can leave millions of dollars on the table, as the
stats from World Commerce & Contracting and Harvard Business Review can attest.

With CLM, companies can keep careful track of even the most intricate contract complications
to ensure that both parties are following through on every detail, and that what they have
painstakingly negotiated actually pays off.

Inefficient contracting costs businesses millions each year CLM can help

8% 5% - 40% 25% - 30%

revenue erosion that organizations loss of value in businesses from a amount that administrative costs
see an average of in their contracts single contract, owing to ineffective associated with contracts are reduced
due to mismanagement. administration of clauses. by through implementing automation.
1
5 CLM Functionally Spans the Entire Value
Chain, From Source to Sale
At the beginning of this guide, we noted that contracts touch every aspect
of a business. Why should companies care about CLM?
The benefits of CLM actually start before a contract is even created. Before
entering into a commercial relationship with another organization, credit checks
Automate credit checks
can be initiated parallel to the contract process to ensure financial stability risk
pre-contract via third-party
is accounted for. PRE-CONTRACT integrations, optimize complex
When it comes to closing deals, CLM enables sales to “self-serve”
OPTIMIZATION deals via preconfigured product
packages, and reduce errors
details and close them faster with intelligent workflows and standard terms and
clauses, eliminating legal and finance involvement while ensuring compliance. Accelerate business with
standard offerings requiring
The true value of CLM comes after the contract is signed—monitoring CLOSE DEALS no legal or finance approval
commitments and actuals with automated settlement. CLM’s structured and FASTER + guardrails for nonstandard
connected contract data interacts with transactional systems to automatically deals
trigger incentives, discounts, and rebate entitlements—eliminating manual
work, improving cash flow, and maximizing profits. And at the end of the day, Automate rebates, incentives,
CLM provides deep visibility and insights into what worked and what didn’t MAXIMIZE and discount settlements to
so companies can accelerate decision making to renew/terminate deals and PROFITS optimize profitability
improve operations.

Gain insights to ensure

POST-CONTRACT compliance (commitments
PERFORMANCE vs. actuals) and initiate claw-
backs for nonperforming deals
6 CLM Is Not Just for Legal

Here’s another myth: CLM technology is confined to the legal

department, and is therefore solely evaluated and purchased
by legal. Who buys CLM technology?
On the contrary—since contracts touch every aspect
of a business and every department within an
CPO
organization, CLM can provide benefits throughout
your company, from sales to legal to procurement. Procure, Purchase, Vendors Rebates
In fact, World Commerce & Contracting recently
found that contracts touch 25% of a company’s
entire workforce. CRO
Deal Speed, Total Revenue, Upsells
CLM evaluations can arise from anywhere
in an organization, empowering employees
and optimizing results no matter where you CFO
sit. Unlike software like CRM, where one
Finance, M&A, Profitability, HR
department has clear ownership, CLM is
a tool designed to grow with and across
your business. General Counsel
Clauses, Templates, Review, Risk Models

CTO/CIO
Strategic, Secure, Tech Spend ROI
Conclusion Validated by the
Because of its combination of vital data insight and
world’s top analysts.
risk management capabilities, contract lifecycle
management is poised to become the next big
enterprise software category, and the industry has
“Icertis provides support for a broad category of contracts
been expanding to meet the growing interest. IT service across procurement, sales, finance and other areas of legal and
management company Gartner reports a rate of growth compliance. Icertis has also demonstrated market responsiveness and
for the CLM industry of over 40% year over year. adaptability by developing “business apps” for clients that go beyond
what a traditional CLM solution can do.”
Gartner Magic Quadrant for Contract Life Cycle Management
Continued market disruptions in the forms of COVID,
supply chain challenges, inflation and economic
slowdown have clearly illustrated the benefits of having
total visibility into the contracts that define how a “Icertis was early to adopt and infuse AI capabilities in its platform and
company runs and made advance contract lifecycle is viewed as an industry trendsetter with respect to advanced-level
discovery and data mining capabilities.”
management imperative.
IDC MarketScape: Buy-Side Contract Life-Cycle Management Applications

To explore more, please register for a demo, or reach

out to a platform specialist.
“Icertis’ enterprise expertise extends to levels above and beyond
most peers, such as its ecosystem of business applications that
provide specific solutions for unique contract types (e.g., retail rebate
View a Demo Contact management) and vertical/domain-specific data models.”
Nick Heinzmann, Vice President of Research, Spend Matters