Category: Contract Lifecycle Management

Upgrading to a contract lifecycle management (CLM) system is an absolute must for modern organizations — saving time and money and providing game-changing insights. However, the actual uploading of contracts to your CLM system can be an exhaustive, expensive process. What’s the secret to getting your contracts into your CLM system without breaking the bank?

If your business recognizes the need to upgrade to a contract lifecycle management (CLM) solution, congratulations – that’s a great first step. However, far too many organizations overlook the importance of legacy contract migration when searching for their new CLM solution. Legacy contracts encompass legal documents that could be scattered in various places around the organization, including:

• On a shared repository, like a legacy CLM, Google Drive, or SharePoint
• In digital files on employees’ hard drives
• In a physical, hard-copy file tucked away in a cabinet or storage bin somewhere

Typically, organizations face significant challenges with their legacy contracts:

First, you must decide how to get the contracts into your system (if at all). Some organizations give up on bringing older contracts into CLM before even getting to this stage, preferring to “start fresh.” By deeming these contracts as legacy and then forgetting about them, organizations are playing with fire. These contracts may possess a ton of value to a business.

An organization gains an enormous amount of insights and data from legacy contract information, helping to better inform decisions and negotiations in the future. For example, legacy contracts could enable organizations to discover the complex nature of relationships between companies (suppliers, customers, and partners) or detail the key financial terms (prices, payment terms, and discounts) between two parties.

Beyond those insights, legacy contracts also contain risks and obligations that organizations need to know; the cost of overlooking even one of these elements can put the business in an uncomfortable legal, financial, and reputational position. After investing time and money in a CLM system, deciding to skip the import of these legacy contracts almost immediately cuts down on the ROI for the entire venture.

Once an organization decides to bring in those contracts (and work to the full value of their CLM investment), they can go one of two ways: subcontracting the job to another resource to bring all that contractual information into the system or designating internal teams to do the same.

Unfortunately, both of those options present the same significant downside.

You face a massive cost — and value — issue. Many organizations have hundreds of thousands of contracts to get into their CLM system; some even have millions. Sub-contracting this work to another company is enormously expensive. The average cost per hour for quality outsourcing of contract migration is around $25 USD; it takes around 22 minutes per contract for review and data extraction.

This time can rise substantially depending on the quality of the contract, its location (and if there is a retrieval process), the number of details needing capture, contract complexity, level of quality assurance, and many other factors. Adding in project management and outsource team training on top of that money, and the real cost per contract import could go as high as $40/hour USD. That’s an enormous expense for a department looking to find value.

Dropping contract migration into the laps of your organization’s resources is another subpar option for a busy legal department. Designating the task to internal teams takes away critical hours that could be spent on higher-value projects, a recipe for department-wide bottom-line disaster.

Faced with two not-ideal options, an organization could quickly find their investment in a CLM solution — one that is supposed to streamline workflows and improve cost efficiencies — blowing up their budget.

The ideal solution: AI-assisted data migration

There is a way for organizations to get the most out of their legacy contracts with their new CLM system without letting costs spiral out of control: AI-assisted data migration. By deploying a dedicated human team augmented by AI-powered insights, organizations can quickly get the most value out of their CLM system (and secure significant investment).

Here’s why the combination of human and AI for data migration is so powerful:

• It saves time. Get a rapid head start on collecting (and finding) the data you need. With AI-assisted data migration, users can save up to 90% of time finding and extracting vital information from contracts — and internal teams can spend more time on higher-value projects for the organization.
• It saves money. Secure the bottom line. AI-assisted data migration allows organizations to reduce outsourcing expensive contract upload work to external resources and saves significant money on revenue leakage.
• It reduces risk. Help protect the overall organization by collecting vital information from within contracts. With AI-assisted data migration, organizations can quickly create structured insights, benchmarks, and risk assessments from chaotic data.
• It makes project management easier. Cut down on headaches and streamline processes with AI-assisted data migration. Deploy a single environment to collaborate, assign, manage, and automate large-value projects. Ensure greater consistency by reducing human error through automation, and improve quality assurance by incorporating guidelines, examples, and reporting.

AI-assisted data migration is integral to securing the good ROI demanded by any significant software investment. This type of AI-powered technology enables organizations to quickly upload their contracts into an efficient CLM environment — allowing for eye-opening insights, quick searches, key fields, and streamlined management that secures true value for the solution.

Onit’s ExtractAI solution helps find, organize, and action critical information in large volumes of contracts. Click here to learn more.

Intelligent new CLM solutions optimize the contract management process by eliminating siloed business practices, unlocking maximum contract portfolio value, and driving efficiency, cost-effectiveness, and compliance. So what is your team waiting for? It’s time to lead the legal tech evolution, which begins with AI.

Technology has become essential in how we work — and contract lifecycle management (CLM) is no exception. Yet not all CLM solutions are created equal. With recent studies revealing that legal, sales and procurement teams can spend as much as 65% of their time on administrative contracting tasks, it is more urgent than ever to find a solution that can automate contract activity, control legal spend, and improve compliance.

An intelligent CLM solution makes your work flow trailblazing, reducing time spent on contracts, highlighting portfolio value, and transforming collaboration between teams. Here is how AI-powered CLM can solve three top challenges of contract management so that you can get back to doing what you do best – cultivating meaningful partnerships, negotiating forward-thinking deals, and igniting colossal revenue impact.

Pain point: Contract review demands an inordinate amount of company time.

SOLUTION: Intelligent CLM is a proven powerhouse at identifying common delays and information silos. With an intuitive user interface (UI) and the ability to report on all things contracting, it uncovers patterns that human professionals might not accurately quantify, such as average time spent per contract type and how long a contract has been in the “hands” of each department.

AI-powered CLM can even provide data visibility into specific languages and terms. The truth is, if you must create a particular type of contract once, you’ll likely have to do it again (and again). Developing a playbook with up-to-date, purpose-built document templates enables sales teams to generate contracts and finalize non-disclosure agreements (NDAs) and quotes using predefined language, so signing every new client doesn’t necessarily require the legal team to step in. Utilizing a clause library with a modernized digital dashboard can reveal how specific clauses are used and modified by breaking contracts into constituent clauses and autonomously extracting key data points. Because AI comprehends the contract in context, it can recognize clauses and keywords, define new opportunities, and evaluate risks for actionable decision-making — slashing delays and inconsistencies, shrinking cycle times by up to 20%, and speeding time to revenue by up to 24%.

Pain point: Contracts often feel overwhelmingly complex and risky.

SOLUTION: Contracts can indeed be complex (why else do so many fast-forward to “I accept,” ignoring the fine print?). Of course, they are complex for several valid reasons: the relationships, deals, and terms they cover and protect can be challenging, and the legal department exists to mitigate risk. However, intelligent CLM can diminish much of this complexity, translating “legalese” into plain language and enabling legal, sales, and procurement teams to initiate standardized new contracts in compliance with all business policies, as well as offering insights into top-performing vendors and negotiated price breaks.

Taking it even further, intelligent CLM can advance operational effectiveness, cost efficiency, and transparency. When combined with a risk analysis dashboard, CLM software streamlines business processes, leverages AI to assess low, medium, and high-risk contracts, and automatically calculates risk scores for each.

Pain point: The contract portfolio is losing value.

SOLUTION: While revenue leakage can occur at any stage of the contracting process, it tends to happen most frequently during contract creation and post-execution management. That said, intelligent CLM can eliminate revenue leakage at every stage. Not only does CLM with AI accelerate automated renewal productivity by 5%, but it can reduce liability and improve compliance from the time contracts are negotiated. It can also mitigate fees and fines due to missed deadlines and renewal dates on the back end via tracking obligations like milestones and payments.

System integrations that allow departments to sync lead data and initiate the creation of NDAs and master service agreements (MSAs), requisitions, purchase orders, and invoices also capitalize on portfolio value, eliminating the need for expensive custom work. Additionally, they lessen siloed contract management by providing a holistic view of supplier relationships while elevating end-to-end contract collaboration — saving up to 9% annually per contract and 33% in legal spend overall.

CLM with AI: Tomorrow’s tech, here today

There is empowerment in transformation. Intelligent CLM utilizes the best in AI to support the entire contract lifecycle, from document generation to signature (and beyond), with advanced analytics, self-service platform methodology, and impeccable regulatory compliance.

The future of Legal means more than just unlocking the latest in technology. Embracing the latest tech will provide modern digitalization, optimized workflows, and requisite collaboration to prove that Legal is more than just a compliance and risk regulator. Legal is equipped to grow your business materially and continue evolving today, tomorrow, and for future generations.

Everywhere these days it seems people are talking about artificial intelligence (AI). But it’s more than just a popular tech term — AI can be harnessed to slash contract delays, enhance collaboration, and transform Legal into an efficient and strategic business partner for your business and the future.

When you consider the term AI, what immediately leaps to mind?

Is it the self-checkout kiosks at your local supermarket? Commanding Siri to “Play old-school hip hop” as you’re making dinner? Star Wars’ shiny gold protocol droid C-3PO declaring he is fluent in more than six billion forms of communication — or a far more nefarious Hollywood vision, where sentient machines rise and threaten our survival, like HAL 9000 from “2001: A Space Odyssey”?

While each of these do illustrate some facet of AI — or intelligent automation, of which AI is a foundational component — the reality is that AI is not now, nor will it likely ever be, that. AI will not destroy humanity as we know it. What AI can do, especially amidst a quickly evolving business landscape, is serve as an essential tool to elevate connection, diminish costs, and advance competitive differentiation for your enterprise.

The birth and growth of AI

A common 21st-century buzzword, AI was initially pioneered and named by mathematician and cryptanalyst Alan Turing in 1950 with the question, Can a machine imitate human intelligence?

Today, AI can refer to any machine, tool, or technology designed to act intelligently and mimic human actions and decision-making. While AI ­can make decisions, these decisions are mapped via machine learning (ML) — complex algorithms that amass data patterns to assess correlations, predict behavior, and reach a predefined conclusion. Most of us have been ML test subjects. It’s what’s utilized to supply insights for things like “Movies We Think You’ll Like” on Amazon Prime and other streaming services. Another extensively used business application is natural language processing (NLP), the capability of software to recognize human speech patterns and determine output. “Smart” assistants such as Siri and Alexa use NLP, disseminating language into word stems, parts of speech, and other linguistic features in order to respond. Chatbots who communicate on company websites do the same, but with typed text.

Over the past decade, AI has exploded and emerged as a cutting-edge phenomenon for retail, manufacturing, banking, and healthcare — and legal operations is no exception. More than 90% of new contract lifecycle management (CLM) solutions include AI as a critical functionality as it can catapult operational efficiency and drive revenue generation in game-changing ways. For instance, during the contract drafting stage, ML can suggest, simplify, and organize creation. NLP can be employed to “catch” missing phrases or correct inaccurate terms in new or existing contracts. Both skyrocket accuracy while reducing time spent on contracting — which is highly necessary when the 2022 Enterprise Legal Reputation (ELR) Report revealed Legal can spend half of their workdays reviewing contracts and Sales and Procurement often spend as much as 65% of their time on administrative tasks, like document preparation.

Elevating the power of CLM with AI

Contract management isn’t solely a legal issue — it’s an enterprise issue, inextricably intertwined with both revenue and relationships. Because every function within a company requires contracts, leveraging next-generation CLM proves a golden opportunity to impact and transform the business at large by:

Accelerating contract cycles.

AI is a shortcut to shortening your contract management time, acting (and even thinking and reasoning) like a junior lawyer by reviewing contracts and redlining contracts, often in under two minutes.

Slowing down the speed of the contract review process can increase the riskiness of the contract portfolio. AI-enabled CLM clause libraries can update and make actionable decisions backed by data — and when contract language is standardized and pre-approved and AI-powered playbooks are used, it can speed time to revenue by 24%. That time can then be used to focus on cultivating partner relationships so revenue isn’t left on the table.

Maximizing productivity while minimizing spend.

Intelligent automation that is CLM plus AI dramatically speeds processes, which organically reduces operational costs. By automating contract data extraction, AI can remove significant costs from sizable projects. Further, it can lower the odds of human error.

Eliminating repeat data entry is a simple and effective way to expedite CLM as well as magnify cross-functional collaboration by confirming correct data for every department. In fact, a study found that legal AI contract review software made new users 51.5% more productive and 34% more efficient. AI-aided validation has also been shown to escalate contract data entry and field validation by 400%.

Minimizing overall risk.

CLM solutions infused with AI can substantially increase control over contracting by determining, calculating, and assigning a risk score for each contract within your portfolio. This offers thorough visibility and transparency into an organization’s contracts, identifying non-compliant contracts proactively, verifying compliance, and lowering the odds of missed obligations that lead to penalties, fees, and fines — as much as 9% annually per contract and 15% in additional revenue each year.

Blazing CLM — and business — forward

There is no doubt that AI is metamorphosing digital transformation, driving organizational change, and revolutionizing the world as we know it. However, CLM + AI has proven to be so much more than a mere buzzword.

There is hope in technology, and AI is at the heart of innovation. Being on the forefront of its adoption and integration is certain to help you lead your enterprise into the future in groundbreaking ways.

There has been exciting evolution on the contract lifecycle management (CLM) front —proving the tech solution of tomorrow is here now, in new and game-changing ways to unlock innovation, keep cross-departmental functions connected, and redefine what is possible for legal operations and your entire business.

Collaboration has sometimes been called a serendipitous collision.

Take what transpired from the young women assembled at Bletchley Park to crack top-secret WWII codes. John Lennon and Paul McCartney parlaying their outdoor church concert into musical legend. “The Steves,” Jobs and Wozniak, introduced at their part-time summer gigs, as they both happened to like electronics.

Yet attributing collaboration even in part to chance doesn’t give the concept enough credit. Working in tandem to advance any goal requires developing trust, sharing responsibility, and honoring the strengths of others. Only then can there be a real fusion of talent and cooperation.

Today, technology is what keeps Legal connected with both internal clients and outside vendors — and yet, half of legal professionals (47%) believe their tech is outdated, according to the 2022 Enterprise Legal Reputation (ELR) Report. A similar number (46%) do not even have automated systems for managing contracts, necessitating manual labor to painstakingly review contracts.

File cabinets of hanging folders, individual drives, and legacy platforms may have helped create a foundation for CLM, but next-generation solutions with end-to-end automation have the capability to transform contracts into actionable intelligence and navigate how modern teams operate.

Here are three ways next-generation CLM can reduce complexity and catapult collaboration within your enterprise:

1. Create more visible workflows

One of the major roadblocks to efficient contract management is contracts spread across multiple systems. Often this means that every employee will go to Legal for every question about every arrangement. CLM can solve this visibility issue by keeping contracts in a single, easily accessible location with assigned user groups and security permissions spanning your business.

CLM can also help avoid delays by outlining each step in the contract lifecycle and creating well-defined workflows. Mapping out precisely how a contract travels through the proper channels ensures it “stops” at the right person at the right time so any issues can be identified and resolved. It also provides transparency for everyone involved in the contract management process, allowing real-time, synchronized negotiation and collaboration from request to renewal.

Delving deeper, a next-gen CLM solution with artificial intelligence (AI)-enabled dashboards can assist the entire enterprise in optimizing contract management. For example, a risk analysis dashboard can up-level visibility by furnishing insights to calculate and understand overall contract portfolio risks, while a comprehensive clause-usage dashboard harnesses essential language to assist in expediting the contract lifecycle, contributing to a productivity increase of more than 50%.

“CLM solutions provide the answer to the ever-prevalent question, ‘What is the status of my contract?’ Without a point of reference, an enterprise can waste time and energy tracking their in-flight contracts,” James Kearney, Director at Qualitas Consulting Group, an Onit partner, explained.

2. Accelerate deal closures

In a corporate landscape where time equals money, it’s easy to see why there can be a push-pull mentality between Legal and Sales: whereas Sales wants to close deals as quickly as possible to meet targets and drive revenue, Legal must scrutinize every detail of each contract to minimize risk and ensure regulatory compliance.

While it’s no secret that streamlining contract cycles can fuel sales velocity, being truly conscientious requires time — and this is where next-gen CLM comes in. By using pre-configured and data-sourced templates, automated digital signatures, and a library of terms and conditions, revenue operations can execute accurate contracts without necessarily waiting for legal operations’ contract-by-contract approval. Additionally, instead of passing versions back and forth, the latest CLM tools allow Legal and Sales to redline contracts simultaneously, often in two minutes or less – a process that is proving to elevate collaboration as well as advance sales cycles by as much as 24%.

“We are seeing more legal departments looking for ways to empower and shift responsibility for lower risk, higher volume contract work to the parties more directly involved in those transactions,” added Kearney. “Finding and properly leveraging a CLM platform capable of reducing the inherent friction between business and Legal, while simultaneously improving the overall fidelity of the final contracts themselves, will be a critical consideration for clients in 2023 and beyond.”

3. Prevent revenue leakage

Contract renewals are vital for recurring revenue recognition and business retention. Missed contract obligations can damage your company’s relationships and reputation (not to mention the potential financial cost). With a next-gen CLM solution, your company can devise playbooks that lay out the ground rules for contract negotiations and amendments and automate AI alerts for obligation management.

You can also stay on top of renewals — and augment efficiency overall — by integrating with an external, cloud-based system. System integrations can drive efficiency by reducing repeated manual labor, synchronizing data that initiates contract creation, and eliminating siloed systems for more vital enterprise-wide collaboration.

“It is imperative that companies take steps to insulate themselves against legacy contracting processes that may have been completely manual or ad-hoc in nature,” Kearney elaborated. “Such processes are typically born out of necessity by tenured staff, who have the institutional knowledge collectively locked up inside their heads. Transforming ‘this is the way we have always done it’ processes and incorporating historical knowledge into a robust CLM solution will help mitigate against the likelihood of both missed obligations and lost opportunities.”

Collaboration first – and future-forward

There is empowerment in collaboration. For businesses and practitioners that wish to grow, differentiate, and succeed, next-generation CLM can be a catalyst for evolution, helping to diminish complexity across the enterprise as it saves time, simplifies workflows, and bolsters contract portfolio value.

When openness and innovation meet, risk is better managed, costs are better understood, and true connection can occur. By breaking down silos, the most innovative and intelligent CLM will galvanize every function within an enterprise to work together, driving your business toward operational excellence with the technology of tomorrow leading the way.

Learn how Onit’s next-generation CLM solutions and AI-powered innovations meet you where you work with end-to-end automation of the contract management process to cultivate partnerships, elevate efficiency, and ignite revenue growth for enterprise-wide success.

State-of-the-art contract lifecycle management (CLM) technology has come a long way in making a difference for enterprise businesses. But is your current CLM solution up to snuff? Here’s what to look for so you can uplevel the streamlining of your contract review, drive revenue generation, and future-proof your portfolio and business.

In any typical workday, week, quarter, and fiscal year, the average Fortune 1000 company may handle several tens of thousands of contracts.

That means that — spanning your enterprise, and pulling in colleagues from Sales, Procurement, and Finance — each contract will need to be negotiated, reviewed, and executed. Then, when that part of the process is complete, with signatures on the proverbial dotted lines, the lifecycle management of that contract begins, including monitoring for regulatory compliance and “re”-review at renewal time.

Now, repeat that process… perhaps 25,000 (or more) times!

This very real scenario — which commands at least half, and as much as 70%, of legal professionals’ time — is what makes end-to-end CLM solutions essential. Whereas manual contract management can cause roadblocks and revenue leakage, the most cutting-edge CLM tools transform the contracting process’s speed and spending, from capture and creation through post-execution management, all while harnessing critical insights and diminishing risk.

Could your CLM use an overhaul? Here are five signs:

1. “It’s a challenge to find our contracts.”

To elevate efficiency and drive revenue, you need to know where every contract is. However, manual tools like spreadsheets, network shares, and legacy technology solutions tend to be unwieldy and jam up workflows.

The newest CLM tools with built-in version control and readily searchable repositories serve as a single source of truth, eliminating precious hours of searching for crucial information and helping business operations regain control of all contracts — leading to a 50%+ improvement in productivity and 24% reduction in the average sales cycle length.

2. “There isn’t enough visibility into our portfolio.”

Contracts are the nucleus of every business cell, defining any value exchanged. Without insight into obligations and terms, there can be revenue leakage of more than 9% annually.

For this reason, legal ops, procurement teams, and portfolio managers require visibility to discover and assess risk before it disrupts business. How to do this when elements of risk may be hidden deep within contracts? Introduce CLM with a risk analysis dashboard to provide visibility and initiate proactive contract management. By assessing contracts for varying degrees of risk based on developed playbooks and calculating a risk score, your team will have thorough and profound oversight of your contract portfolio.

3. “We’re not getting the value we wanted.”

Your CLM solution may have initially provided some shiny bells and whistles, but if it’s begun to feel subpar, the most state-of-the-art way to achieve greater value is by integrating CLM with automation and artificial intelligence (AI) to escalate the contract review and management process.

When powered by AI, today’s CLM solutions can redline a contract in two minutes or less and have been proven to reduce end-to-end NDA processing time by a remarkable 70%. A clause usage dashboard can offer an insight-centric approach to contract generation, and the best contract management platforms also have intuitive, user-friendly interfaces that help your company get up and running in less than 30 days.

Of course, the value of vanguard technologies isn’t always realized instantaneously — but integrated systems do deliver on their promise for both scaling and sustaining material growth with the potential of slashing overall business costs by up to 90%.

4. “We’ve missed renewal deadlines.”

Staying up-to-speed on contract renewals can feel like a formidable task — but not remaining on top of deadlines can be deleterious, seriously impacting customer retention rates.

Intelligent CLM is equipped with real-time obligation tracking to manage and measure not only all emerging legal requirements and compliance-related tasks, but also intermittent event-driven obligations, such as renewal dates, expirations, cycle times, and even pricing changes. This way, your team will never overlook or miss an important date again.

5. “We could use better cross-functional collaboration.”

Legal operations doesn’t operate in a silo. To achieve goals with the most successful outcomes, connection and collaboration with Sales, Procurement, and other functions are vital — making the ability for all departments to view, track, redline, and approve documents an absolute necessity as well.

With the latest CLM, all departments can manage contracts in conjunction, with edits synchronized across platforms to secure version control and eradicate duplicate entry. When combined with system integrations, CLM also allows departments to synchronize data and create compliance contracts, NDAs, and MSAs, catapulting accuracy and efficiency and eliminating siloed contract management.

Taking control with innovation

There has been a definitive evolution in the execution and efficiency of contract management. If you nodded in agreement with any of the above statements, the message is clear: It’s time to upgrade your CLM.

In doing so, you can eliminate inefficiencies, enhance insights, and provide deeper visibility into your contract portfolio. Not only that, but the time saved can be funneled into Legal serving as a trusted advisor, corporate role model, and creating an impact where it matters most: building relationships, developing strategy, and skyrocketing the material growth of your business.

Learn how Onit’s next-generation CLM solutions and AI-powered innovations meet you where you work with end-to-end automation of the contract management process to cultivate partnerships, elevate efficiency, and ignite revenue growth for enterprise-wide success.

Contract lifecycle management (CLM) solutions with end-to-end automation diminish risk and catapult both operational and cost efficiency — but they may also come with uncertainty about how (and why) they make a difference. Here, we dispel the misinformation so you can get back your time and empower your organization for success.

Nessie amid a swirl of bubbles in Loch Ness’ cold, murky waters. Sasquatch’s enormous footprints stomping across the forest floor. Pandora, unable to resist temptation, twisting open the jar from which all the world’s evils escape.

These are some of the most famous myths — but there are also several surrounding CLM. Although AI-powered CLM solutions have been proven to deliver advanced contract review, document management, and risk mitigation, the 2022 Enterprise Legal Reputation (ELR) Report revealed half (54%) of legal professionals still do not use automated contract processes, leaving a major opportunity untapped for legal operations to impact and transform their businesses.

It’s time to tackle those misconceptions and debunk these outdated CLM myths.

Myth #1: CLM is cost-prohibitive, time-consuming, and difficult.

“Do more with less.” In this global macroeconomic market where cost containment and efficiency are key, that has become a near-constant mantra — and this is where CLM shines.

According to the ELR Report, 40% of legal professionals spend four to five hours each day manually reviewing and managing contracts. That means half of every week, quarter, and fiscal year is tied up in contracts — making half their time unavailable for anything else and essentially costing half their salary. And though some worry it will take too long to train their departments on CLM, the latest solutions are out-of-the-box, intuitive, and ready to implement. Further, the return on investment (ROI) is real for CLM, as it has been proven to shorten the length of the typical sales cycle by 24%.

The reality is there can be no revenue recognition until contracts are signed. CLM tools accelerate the entire contract process, from document generation and redlining to e-signature and finalization. This acceleration can then pilot faster decision-making on how to push contracts through review cycles, renewals, and negotiation — leading to faster material growth and both time and spend saved.

Myth #2: CLM will take over the work attorneys do.

While this is a classic fear and “rise of the robots” sci-fi flicks might try and convince you otherwise, it’s unfounded to believe that Legal will be replaced by CLM applications or any related AI offerings.

It’s true, of course, that AI has been developed to automate many duties, and the most innovative AI-enabled CLM can review and redline a contract in under two minutes, catching errors that our overworked human gazes might mistakenly overlook. Yet there is much tech cannot accomplish: establish strategic relationships with vendors and clients; negotiate deals, give advice, and propose forward-thinking innovation; initiate significant, meaningful, and lasting change. All of these require distinctively human skills and expertise.

That said, what is true is that technology is an enabler for businesses and practitioners who do wish to evolve and grow — and though automation will not replace attorneys, attorneys who do not adopt new tech will likely be replaced by those who do.

Myth #3: Migration of legacy contracts can happen automatically.

Unfortunately, there is nothing in life nor business that is a one-press “easy” button. Some contract management tools may be bolted to systems initially built for other business uses, limiting functionality and creating challenges for data migration.

So if you’ve been told that data migration is simple — that simply may not be true. However, it doesn’t have to feel impossible. Though filing cabinets, shared drives, and Excel spreadsheets may provide an illusion of order, what they don’t provide is overall visibility of your contract portfolio. CLM augmented by AI can help organize inventory, digitize contracts, and define data points. By analyzing and extracting legacy contract metadata — including critical dates, terms, and clauses — you can create and maintain an indexed, searchable, and reportable contract repository, preventing 9.2% in revenue leakage annually.

Myth #4: My department doesn’t need CLM.

Every department hires employees, negotiates with clients, procures vendors, and settles upon agreements. And so, every department can benefit from CLM.

While Legal’s top concern may be the age-old dance of speed vs. detail immersion for risk avoidance, Sales frequently fears contract holdups will hold up further revenue potential. Procurement, meanwhile, must juggle stakeholder needs, supplier value, and budgeting and spend. Yet CLM has been found to streamline the contract lifecycle for all parties. In fact, legal departments of billion-dollar companies that employ contract management technology often reduce their average contract cycle time by over 33%, from 30 days to just 20.

If you’re thinking, “Well, my company is nowhere near that size,” scalable CLM solutions may be even more what the legal tech revolution ordered: AI-enabled platforms assist legal departments to increase their productivity by more than 50% – which is analogous to having twice as many lawyers on staff!

The (top and) bottom line

With these CLM myths busted, you have the unique opportunity to lead the evolution of contract management for your business — saving on speed and spend and influencing topline revenue generation, bottom-line cost efficiency, and operational excellence for unprecedented success.

Learn how Onit’s next-generation CLM solutions and AI-powered innovations meet you where you work with end-to-end automation of the contract management process to cultivate partnerships, elevate efficiency, and ignite revenue growth for enterprise-wide success. 

Is your organization making the most of your contract portfolio? Learn how to take control and up-level your portfolio’s value with solutions that can reduce revenue leakage, provide more meaningful oversight, and unlock tremendous material impact — all while helping your department connect more deeply across the enterprise.

If a company is a house of business, then contracts are its foundation — so much so that many industries often have 90% or more of their annual revenue locked into contracts, according to McKinsey & Company.

On the flip side, a lack of efficient contract management can lead to diminished visibility, inconsistent workflows, damaged vendor and supplier relationships, and an erosion of value to your contract portfolio at an average of 9% — and as much as 15% — revenue loss each year.

Here are six ways your contract portfolio may be losing value and how you turn that around today:

1. Lack of pricing tier awareness.

Contracts determine the financial flow of an organization, with each one carrying its own set of terms and risks. There is term-based pricing, release orders that may delay the purchase, and evergreen contracts that could contain and express entirely different obligations — as well as any agreement your company, well, agrees to. However, when the buy side often proffers a “take as long as you wish” philosophy while the sell side supports cash-in-hand as fast as possible, making certain to keep clear note of more flexible (even unfavorable) tiers can empower your department to avoid revenue leakage.

2. Missing deadlines and renewals.

For many contracts, there is a certain sequence that can lead to penalties if not followed. These can be financial in nature such as fees, fines, and compensatory damages, but they may also include long-term ramifications, like damaged reputation or even vendor or client loss. Establishing customer expectations and clarifying consistent protocols like project timelines, production schedules, and delivery dates can help your department stay on top of important milestones and eliminate lost time and missed revenue opportunities.

3. Not holding vendors to terms.

Procurement contracts cement the partnership between buyers and suppliers. What vendors does our company use? What rates were negotiated? It’s all black-and-white in the contract. But if a company is lax about delivering what was agreed upon, all negotiations can be invalid. Don’t let a lack of visibility into spend performance get away from your business, as diligent enforcement of negotiated supplier terms is a primary source of revenue.

4. Playing “ostrich” with the risks.

Contracts are, by nature, conduits of risk mitigation — so even the simplest one can lay an organization bare to liability if not handled properly. Especially in a tumultuous macroeconomic market laden with pandemic supply chain issues and geopolitical conflict, it is crucial to maintain current regulatory knowledge, know how to adapt quickly to new financial guidelines, and be aware of which contracts in your portfolio have clauses built in to address risk. The ability to not bury your head in the sand and quickly pivot to examine contracts for risk compliance will speed time to future revenue.

5. A sense of disorganization.

One reason a contract portfolio may lose value is the simple chaos of our busy business lives. A study published in the Journal of Contract Management revealed that seven in 10 companies find it challenging to find vital documents, despite contracts being a critical business tool and source of value. The need to search for contracts is a thief of time better spent on higher-value tasks, such as analyzing data insights or becoming an advocate for meaningful diversity and inclusivity. Launching, migrating, and archiving a secure, central, and digital document repository with a keyword search tool will promote better transparency across functions and contribute to faster revenue recognition.

6. Reluctance to add automation and AI to the mix.

Manual contract management programs that involve spreadsheet-based processes are not only time prohibitive and labor-intensive — often usurping at least half of most legal professionals’ workdays — but also devoid of the insight that advances true efficiency. However, contract lifecycle management (CLM) solutions powered by artificial intelligence (AI) take visibility and efficiency to the next level by automating manual workflows and alerting teams to necessary updates and improvements. As a result, the most innovative can redline contracts in under two minutes, applying your company’s playbook and accelerating contract review by up to 70%.

A crossroad of opportunity and growth

The creation and execution of contracts comprise accountability, obligation, and trust. Visibility is also essential for discovering and assessing the risk that could disrupt business. Examining your contract portfolio regularly will help your department retain control, reduce rogue spending, and embrace collaboration across the enterprise. With this new era of CLM, innovation is at your fingertips to execute contracts more effectively and efficiently. This way, your team can focus on what matters most: unlocking the value of your existing contract portfolio, optimizing strategic and meaningful new partnerships, and skyrocketing your department’s revenue generation and operational excellence.

Learn how Onit’s next-generation CLM solutions and AI-powered innovations meet you where you work with end-to-end automation of the contract management process to cultivate partnerships, elevate efficiency, and ignite revenue growth for enterprise-wide success.