What is Contract Management?

What is Contract Management?

Written By
Joy Cunanan
Updated on
April 6, 2022
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minutes
What is Contract Management?

Contract management (also contract lifecycle management or CLM) is the process of managing the entire contract lifecycle from the creation of a contract, contract negotiation, signing, storage, and retrieval. In any business, effective contract management maximizes a team’s performance while reducing its operational, financial, and legal risks. 

There is no doubt that contracting is core to business activities. Over 70-80% of business operations are governed by contracts, and external costs on legal services amount up to 46 cents for every $1 spending. Legal operations certainly demand substantial operational costs.

However, the manual approach to contract handling has resulted in multiple business challenges. For instance, 46% of contact management professionals find that manual tasks make collaborating on contracts a difficulty. Additionally, 47% of sales teams mention that analyzing nonstandard agreements for opportunities and risks is the most difficult part of the post-execution process.

In confronting these operational challenges from manual contract handling, 68% of legal departments say “digitizing manual processes” is a top priority. This is why in 2018, 37% of companies spent more than $750 thousand on legal technology. In specific, mid-size companies with in-house engineering resources had an average spend of $1 million on legal technology to ease their contracting operations.

Author
Joy Cunanan
Joy is the Digital Transformation Manager at Lexagle. As a marketing professional in the Tech and B2B industry for over seven years, she is always on the lookout for the next best solution in the ever-changing online world. With a passion for helping businesses thrive and optimize operations, she shares her expertise in the power of contract lifecycle management and its capacity of easing the contracting process for busy organizations worldwide.

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