Contract Lifecycle Management Software: Pros And Cons Of Neglecting
Contract Lifecycle Management Software
Current market conditions and industry advancements have made contract lifecycle management (CLM) software an essential tool for any successful business. From financial transactions to legal documents, CLM software provides an automated system to effectively deal with any type of contractual document and manage contractual terms and conditions with precision. But what is the risk of not using Contract Lifecycle Management software for source-to-pay processes? Before rushing into investing in CLM system, it is imperative for C-suite executives to be aware of the risks associated with not utilizing such software.
The most pronounced risk when it comes to not utilizing CLM solution for source-to-pay processes can be seen in the domino effect of manual errors. Such errors frequently occur in the manual inputting of data, such as when single keystroke can lead to costly mistake or when entering wrong or duplicate information due to lack of data redundancy. As contracts become more complex, any changes or modifications run the risk of not be implemented properly resulting in contractual obligation non-compliance. This scenario can lead to expensive litigation claims or fines. non-CLM system also leaves company exposed to data breaches, or at least lack of data security, thus further increasing vulnerability.
A further risk in abstaining from CLM software is seen in lack of knowledge, coupled with shortage of resources and staff. Contract negotiations, reviews and approvals require tedious manual data tracking, including inventory management and updates which can be arduous and time-consuming. Meeting predefined deadlines, such as financial and taxation mandates, could be delayed, leading to penalties and late fees. Furthermore, with manual systems, employeeare unable to comprehend big data due to limited intellectual capacity, leaving them unable to work with complete accuracy and necessary speed.
Time is of the essence when it comes to accurate contract management. However, by relying on manual processes and inefficient technology, employee productivity can take severe hit, thus impacting organizational growth. The capability to track, analyze and compare various contract elements such as pricing, payment plans and expiration date can be tricky and tedious without CLM software. Moreover, CLM solutions enable companies to take advantage of advanced analytics tools and tools that help to build business intelligence, enabling executives to make informed and sound decisions.
By now, it is clear that not using Contract Lifecycle Management software poses significant risk for any C-suite executive faced with the task of navigating and implementing source-to-pay processes. Investing in automated CLM solutions is the only way for organizations to protect themselves from the consequences of contractual complexities, human errors, fines and data breaches. With suite of integrated and automated functionalities, CLM systems can automate and streamline day-to-day contracts, improving the speed, accuracy, control and risk management of an entire organization.
