Many organizations today choose to focus on their core competence, while outsourcing other areas of work to niche-experts. This is why B2B companies often get into contracts and associations with third party vendors to get work done efficiently and effectively.
Two areas that several B2B businesses choose to outsource include contract lifecycle management (CLM) and electronic signing.
Why Contract Life Cycle Management for B2B enterprises?
Contracting has a direct impact on revenues. Creating an operationally efficient and well-connected cycle that can aid better customer relationship management and partner relationship management also leads to:
- Improved accuracy by reducing manual errors in contract generation and validation.
- Improved contract protection through features such as online (cloud storage), automated backups, disaster recovery mechanisms etc.
- Optimized workflows for managing contracts throughout their life cycle.
- Timely contract renewals, making compliance better managed.
Selecting the right contract management service provider: Key considerations
Selecting the right contract lifecycle management solution has a direct impact on sales revenue by shrinking the contract cycle time, and thereby shrinking the sales cycle significantly. Automation of contract processes using the right software saves businesses resources otherwise spent on process management, staff etc.
What most business customers need in any contract management solution:
- Centralized contract repository: A single, unified, cloud-based or web-based document repository which gives a holistic view of contracts with inbuilt access levels is the bare-basic for effective contract management. This repository must be equipped with the latest digital-data intelligence capabilities and backup mechanisms to ensure that all contracts are managed as per industry standards.
- Process management: A CLM application must allow users to define and deploy processes and workflows to orchestrate tasks and actions, and mandate milestones such as authorizations and amendments on an automated basis. How you design the process workflows is half the job done in driving contract management excellence.
- Defining accountabilities: While many companies already put in place the operational and technical elements, the true success of a contract management life cycle comes from people taking on due onus and ownership. Assigning an influential leader as the custodian of the CLM process is the first and foremost step to ensure that everyone prioritizes this agenda.
- Measurements of successes: It is equally important to celebrate milestone achievements and also identify possible bottlenecks early-on, while on the CLM journey. Defining and measuring relevant CLM-metrics such as “percentage of deals closed on time”, reduction in time taken to negotiate and close contracts, decrease in contract-related regulatory penalties etc matter.
Most users seem to adhere to the above checklist in their shortlist of CLM providers.
CLM service providers who gained popularity in 2017-18
Model N, Contract Insight Contract Management, Gatekeeper, Icertis, SAP, ShipEdge, Oracle SCM Cloud, Apttus Contract Management, DocuMinder Contract Management, and SAP S/4HANA, Nintex, SpringCM, Ariba Contract Management, COUPA and Meditrack.
Business users also assess potential service providers on parameters such as the quality of templating to how e-signatures are implemented, to location-limitations.
In fact, B2B businesses are increasingly moving to online, cloud-based CLM platforms, and it would be best to adopt digital practices such as electronic signatures for managing contract lifecycles too.
E-signatures: A new necessity for global businesses
As more businesses grow globally, contracts are seldom relegated to one location. We are thus seeing an increasing usage of electronic signatures i.e. an electronic method that helps an individual or entity show agreement to the conditions and terms of an electronic service, or to confirm identities of two entities engaging in a contractual agreement.
Today, many countries have afforded e-signatures the same legal status as traditional signatures.
Moreover, depending on how they are created, these e-signatures are commonly further classified as:
- Handwritten e-signature which is treated very similar to a real handwritten signature on paper.
- Remote e-signature which is applicable using a secure centralised signature creation device.
For B2B enterprises, it is crucial to select the e-signature type best suited to their business model.
Some of the interesting players in the electronic signature market currently are Adobe, PandaDoc, Hello Sign, Conga, SignRequest, Zoho Sign, SignNow, DocuSign, RightSignature, e-SignLive, dotloop.
What matters to B2B Customers when Selecting an e-signature platform?
Some of the bare-basic features that matter most:
- Security: Security is of utmost consideration when sharing personal information in the form of an electronic signature. Access controls and stringent protection policies matters to business users.
- Audit and Compliance: When it comes to signatures, compliance with industry policies, standards, laws, and regulations is non-negotiable, because businesses run the risk of facing a legal breach.
- Privacy: From a user perspective, e-signature solutions must respect the privacy of many multiple users, carrying out transactions discreetly.
- Scalability: B2B businesses always plan to scale. E-signature modules must be able to manage multiple business contracting, allowing them to accept higher volumes of documents without negating performance.
The role and importance of contract lifecycle management is shifting from a mere operational process to that of a critical business enabler. Backed by emerging technologies, it is taking on the digital garb. It is high time that leaders look at CLM with a strategic lens, and input the due resources required to make it better for business results.