A contract lifecycle management solution is something that both Procurement and Legal teams need. However, there is often some disconnect between the two business functions. Knowing what features and functions are needed to bring consistency to buy-side contracting is necessary when trying to improve collaboration with Legal.
If you're wondering what those features and functions are, you've come to the right place! We hosted a webinar featuring Nick Heinzmann from Spend Matters, and our very own Colin Levy to review the purpose of CLM for procurement teams and what is a must-have when trying to align Procurement and Legal teams. Here's what they said:
Must-have #1: Contract Templates
Contract templates enable teams across the enterprise to draft standardized agreements without having to come to Legal.
These don't just help Legal teams to stay out of the weeds either. Having strong contract templates empowers other business functions, such as Procurement teams, not to have to rely on Legal for everything. This helps to avoid bottlenecks and allows for a shorter and more consistent contract lifecycle.
Must-have #2: APPROVAL WORKFLOWS
Without a CLM solution, Procurement can get wrapped up in what needs to be approved, who needs to approve it, and time-consuming negotiations. That's where approval workflows come in. They provide a structure for Procurement to fall back on when changes need to be made to an agreement without needing to run to Legal every time.
Additionally, approval workflows allow you to bring your contract playbook to life, ensuring that the right people are approving the right contracts at the right time.
Must-have #3: ERP INTEGRATION
ERP (Enterprise Resource Planning) software is relevant to everyone who uses a CLM. It is essential because it connects multiple systems across your organization to break down silos and help to prevent duplicate, manual, or inaccurate data entry. This is especially critical for Procurement teams so that when they access supplier and purchase requisitions, they have the complete picture.
On the Legal side, integrations give visibility into data, analytics, and obligations that are key to preventing risk.
Must-have #4: CLAUSE LIBRARY
Arguably the most important feature for long-term value is a clause library.
A clause library empowers Procurement teams to construct agreements with confidence and frees up Legal's time on contracts. It even allows Procurement teams to assign risk scores to certain positions and only involve Legal if that risk score is over a certain threshold.
The discussion we had with Nick and Colin brought new color to improving Procurement-Legal collaboration. If you'd like to see the full webinar, you can check it out here.