What will contract lifecycle management look like in the future? (Part 1)

Katie Cook

ContractRoom

by Katie Cook

Features that CLM systems are likely to have in the near future

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It’s hard to know for sure what technology will look like in the future. One famous list of predictions that I love to ponder is that published in The Ladies Home Journal in December 1900 written by Mr. John Elfreth Watkins Jr.  He was a civil engineer working for American railroads who interviewed professionals in various industries when compiling a list of predictions for what life may look like in the year 2000.  His list, entitled “What May Happen in the Next Hundred Years”, can be read here: http://ow.ly/10jXhp .

 

What’s amazing is that Watkins’s list is actually quite accurate on a number of points. For example, he accurately predicted that we would have devices such as mobile phones and a lot of food would be pre-prepared.   He wrongly predicted a few things such as the extinction of pests such as mosquitos and flies and that everyone would be extremely fit, walking at least 10 miles a day.  The BBC reviews Mr. Watkin’s predictions in light of what has happened here: http://ow.ly/10k6AS .


So, taking a leaf out of Mr Watkins’ book, I will now attempt to write a list of predictions. However, mine is not an attempt to imagine what life will look like in 2116 but rather simply at what one particular technology may look like in the next 5 years or so - contract lifecycle management software or contract management software.  In researching this topic, I’ve reviewed Gartner’s well analysed and highly regarded CLM Maturity Model.


The first part of this series of articles will consider features that CLM systems are likely to have within the next 5 - 10 years (some systems already have some of these features). The second and final articles will consider concepts relevant to CLM systems and features of contract management practices that will become commonplace and the norm within this timeframe.

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  1. The legal department will not spend as much time drafting/preparing contracts after a request is made for them to do so by a particular department in their company.  This is because process of constructing such contracts will be mostly automated.  The organization has standard terms and conditions for 95%+ of situations.  Those in the department negotiating the contract will be able to fill in a questionnaire to describe the particular situation for the contract and one with all the correct terms will be produced automatically.
  2. All contracts coming in and out of an organization will be analysed through through an automated data capturing screening process so that all variances in clauses are noted and any contract that is written in a non-standard approved form will be flagged.  This information will be captured and available for review on a dashboard in the CLM system.  
  3. The CLM system will have an embedded risk/value assessment function so that all impending and live contracts will be continually rated for their apparent risk and potential value.  This information will be available for viewing on a dashboard in the CLM system and can be used for making strategic decisions about the relevant contracts.
  4. The CLM system will be paperless across the full life cycle.  It will guide its users by prompting them to certain tasks and have an automated workflow for contract processes that involve a series of contracts or documents.  The system will also guide its users on price by comparing prices paid for similar contracts.  It will do this by inputting and analysing other information that may relate to price from other software systems such as those for supply chain management which monitor commodity value and pricing.
  5. Written and oral negotiation and redlining will all be captured within the one place and the system will make it easy for the context of a comment or redline to be understood e.g. it will be easy to decipher to which part or version of the contract a comment or redline relates through intuitive user interface design.  There will be an ability to comment publicly or privately to only specified users.  CLM systems will have an IM function and also the ability to capture oral comments and/or discussions about particular contractual comments.  The CLM workflow capabilities will extend to alerting and guiding counterparties and in so doing will solve any problems with version control.
  6. Approvals will be easy and take next to no time to obtain. Once negotiation for a contract is complete the CLM system will guide the approvals process and automatically prompt those with the required authorities to provide their approval - making this process as seamless as possible - and it will be accessible on a mobile device.
  7. The CLM system will be fully integrated with other organizational software such as CRM, ERP and Supply Chain Management (SCM) and all relevant information will be fed between systems dynamically.

So there you have some of the features that CLM software will have in the near future.  


Some CLM software already has a lot of these features and is working towards more advanced functionality.  ContractRoom is one such CLM software system.  To find out more and/or request a free demo please click here: Request Demo


About the author

Katie Cook

Katie Cook

Katie Cook is the Director of Marketing, Communications and Legal Standards at ContractRoom. Originally from the east coast of Australia, she has a background as an Attorney having practiced in both public and private practice in Brisbane and Melbourne. While working as an Attorney Katie completed studies in journalism and is now combining her legal and writing skill sets in her role at ContractRoom.

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