Contracts are critical in governing agreements, ensuring compliance, and mitigating risks. However, managing the contract lifecycle efficiently can be complex, with various challenges affecting processes from creation to renewal. Without streamlined workflows and proper oversight, inefficiencies can lead to delays, compliance risks, and financial losses.
By identifying key pain points and leveraging the right solutions, contract management can be transformed into a seamless, automated process. Here are five common challenges in Contract Lifecycle Management (CLM) and how they can be effectively addressed.
1. Complex and Time-Consuming Contract Creation
The Challenge:
Manually drafting contracts can be a lengthy process, often requiring input from multiple stakeholders. When templates and clauses are inconsistently applied, contract creation becomes prone to errors, leading to delays and potential disputes.
The Solution:
Using contract automation tools can significantly improve efficiency. Pre-approved templates and clause libraries help standardise agreements while streamlining approvals. By integrating automated workflows, contract creation can become faster and more consistent, reducing negotiation cycles.
2. Limited Visibility and Tracking Across the Contract Lifecycle
The Challenge:
Without a centralised system for contract storage and tracking, it becomes difficult to monitor key dates, renewal deadlines, and obligations. This lack of visibility increases the risk of missed opportunities, financial penalties, or non-compliance.
The Solution:
A centralised contract repository ensures that contracts are easily accessible while AI-driven analytics and automated reminders help track milestones and deadlines. Enhanced visibility enables better decision-making and proactive contract management.
3. Ensuring Compliance with Evolving Regulations
The Challenge:
Regulatory landscapes are constantly changing, and keeping contracts aligned with the latest requirements can be difficult. Compliance risks arise when outdated clauses remain in active contracts or when monitoring regulatory updates becomes overwhelming.
The Solution:
Automating compliance monitoring within the contract management process helps ensure that agreements adhere to evolving legal standards. AI-driven tools can scan contracts for outdated clauses and suggest necessary updates, minimising compliance risks.
4. Inconsistent Standardisation Across Departments
The Challenge:
When different teams use varied contract templates and approval processes, inconsistencies arise. This can lead to inefficiencies, contract disputes, and difficulties in enforcing terms.
The Solution:
Implementing standardised contract templates and approval workflows helps maintain consistency across all agreements. By defining clear roles and responsibilities within a contract management system, the process remains structured and efficient.
5. Lack of Post-Execution Monitoring and Performance Tracking
The Challenge:
Once a contract is signed, tracking performance metrics, obligations, and renewal terms can be overlooked. This can result in lost revenue, unfulfilled commitments, or missed renegotiation opportunities.
The Solution:
Leveraging contract performance tracking tools ensures that key obligations and deadlines are met. Automated alerts, dashboards, and AI-powered insights enable proactive contract management, allowing for timely renewals and performance optimisation.
Final Thoughts
Managing contracts efficiently requires more than just drafting and execution—it involves continuous monitoring, compliance oversight, and automation to reduce risks and improve operational efficiency. With the right contract management solutions, workflows can be streamlined, compliance can be ensured, and contract value can be maximised.
By embracing intelligent contract management, organisations can transform their processes, enhance collaboration, and stay ahead in an evolving business landscape.
Ready to streamline your contract management process? Discover how our Contract Management System can help you simplify workflows, improve compliance, and drive efficiency. Book a Demo today to learn more!
