By eliminating most of the tediousness, oversights, and loopholes that often plague legal agreements, contract lifecycle management (CLM) has the potential to significantly improve your company’s bottom line, protect brand reputation, and boost overall synergy between your organization and the other companies that you frequently do business with.
Even better, the benefits and usefulness of CLM are not limited to any industry – every industry needs it.
However, as a business owner, maybe you are still hesitant, or you’re not yet convinced about what CLM can do for your kind of business.
3 Sample Contract Lifecycle Management Use Cases
Below is a brief look at 3 hypothetical companies operating in different industries and how deploying CLM solutions worked as a common denominator to smoothen out what could otherwise have become serious contractual headaches.
1. Oil and Gas Services Company
Company #1 is a reputable provider of different products and services for the upstream oil and gas sector: from exploration to production.
The nature of this business requires that they regularly engage the services of smaller third party vendors and contractors. The process starts with a rigorous and transparent tender bidding process for every single contract. In addition, each contract requires extensive employee collaboration and must go through internal reviews and approvals. Each contract also requires input from the sales, operational, legal, and operations departments.
Multiply this level of activity and negotiations by up to 30 or more vendors every month and you will quickly see why contract lifecycle management became necessary for this company.
What CLM does for Oil and Gas Companies:
- Centralize information and history for all contracts.
- Standardization of their negotiation process.
- Provide customizable templates for quick contract turnaround with no errors.
- Ensure compliance with established tendering and bidding policies, and review and approval processes.
- Generate alerts and notifications for critical milestones.
- Ensure compliance with process workflows.
- Allows real-time collaboration between multiple project stakeholders, etc.
2. Construction and Engineering Company
Our second example is a company that provides building construction services, project management, as well as mechanical and electrical engineering consultancy and installations. At any point in time, they are busy with a minimum of 3 or 4 construction projects running concurrently.
Their major concern is that the nature of this industry requires strict compliance with deadlines to avoid built-in contractual penalties for project delays. Hence, better cost containment through avoiding fines and penalties is of prime importance for this company. Also, like many construction contractors, they were still relying heavily on paper records and manual contract management leading to repeated procedural inefficiencies and several costly mistakes.
What CLM does for Construction and Engineering Companies:
- Provides a repository for checking on each contract on-the-go.
- Allows them to submit bids faster by using standardized templates.
- Standardization of their negotiation process.
- Ensures compliance with project timelines via alerts and notifications.
3. Facility Management Services Provider
This company provides maintenance and facility management services for a variety of clients including schools, a hospital, luxury residential apartment blocks, and a couple of large shopping malls.
Each client brief is guided by a Service Level Agreement (SLA) that outlines the
scope of deliverables and timelines for all maintenance tasks. Each SLA also contains strict penalties for defaulting on performance management, quality control, safety, and relevant Key Performance Indicators (KPIs). To enable them to focus on their core business (providing premium facility management support), this service provider regularly outsources functions like cleaning/janitorial services, landscaping, minor repairs, painting, and IT support to third-party contractors.
Major concerns for this company include avoiding penalties and fines for breach of SLA terms, and ensuring that outsourced vendors maintain the same standards of quality control and safety while keeping to agreed deadlines.
What CLM does for Facility Management Service Providers:
- Allows all stakeholders involved in the contracting possess to collaborate and communicate.
- Centralizes information and history for all contracts.
- Quicker response to new bidding opportunities via a standardized negotiation process.
- Ensures compliance with timelines via alerts and notifications.
- Reports and dashboards that help to check performance and identify under-performing contracts.
- Ensure compliance with process workflows, etc..
Modern contracting processes can seem increasingly complex. Unfortunately, when legal issues arise, it can take a lot of time and money to resolve. Wouldn’t it be better to avoid all these issues in the first place?
Axxerion’s CLM software was designed to help businesses understand and mitigate contract liability risks. Join the world’s largest companies and partner with us to enjoy the benefits of contract lifecycle management.
Want to know more? Contact us for a free demo today. Let’s help you take control of your contracting processes.Free DemoFree Demo