Simply Explanation of Contract Lifecycle Management (CLM)
Contract Lifecycle Management (CLM) for small and mid-sized businesses (SMBs) refers to the organized process of managing contracts from beginning to end—digitally, securely, and efficiently.
- Contract Lifecycle Management (CLM) is the process of overseeing and controlling all stages of a contract—from initial request or drafting, through negotiation and approval, to execution, renewal, and eventual termination.
- For SMBs, it’s about moving away from scattered Word files, emails, and printed contracts—and instead using software to stay on top of all contracts, deadlines, and responsibilities.
Key Stages of CLM
- Request / Initiation: A new contract need arises (e.g., hiring a vendor or contractor).
- Drafting: Use templates or clause libraries to create the first version.
- Negotiation & Collaboration: Internal and external stakeholders review, edit, and redline.
- Approval: Contracts route through defined approval workflows.
- Execution: Sign digitally using e-signature tools (e.g., DocuSign).
- Storage & Access: The signed contract is stored in a secure contract repository.
- Monitoring & Compliance: Track obligations, key dates, and performance.
- Renewal or Termination: Be alerted to renewals or end contracts before they auto-renew.