5 Ways Procurement Leaders Can Benefit from CLM

Supplier contracts are integral to the source-to-pay process, containing critical details like payment terms, conditions, and responsibilities for each party. Contracts are the backbone for smooth-functioning and cost-effective operations, but their numerous data fields and fine details can also be challenging for procurement teams to manage. Without proper contract management technology, staff has to manually search supplier contracts to find key terms, obligations, and milestones, wasting time and leading to costly errors, legal risk, and missed business opportunities.

Contract lifecycle management (CLM) technology addresses these challenges by streamlining end-to-end supplier contracting processes. With greater insight into contracts, procurement teams can unlock maximum value from supplier agreements and make more informed business decisions. Here are five ways procurement teams optimize the source-to-pay process with CLM software.

Managing supplier renewals

Say your marketing department wants to roll out a new project management software, but the existing software's auto-renewal date came and went without your team noticing. Now, marketing owes another year of fees for a less-than-ideal product and has to put its plans on pause-all due to a renewal oversight.

To prevent this common mistake, many CLM tools leverage AI to scan documents, tag critical data like renewal dates, and generate upcoming renewal reports and alerts. If your procurement team needs to locate specific attributes in a contract, like payment terms or renewal dates, they can use CLM to identify these details quickly. Once CLM surfaces the attributes, a team member can review and verify the results without having to read through the entire document.

CLM can also pull renewal dates into reports for key stakeholders. For instance, if the head of procurement wants a list of all contracts up for renewal in the next 60 days, CLM can identify those agreements, raising the visibility of all upcoming renewals and providing ample time to renegotiate or cancel. Procurement teams can also customize their CLM dashboards to show these details when they log in for maximum awareness.

Catching eligible rebates

Rebate terms are often buried in lengthy contracts, making them easy to miss. For organizations spending considerable money with suppliers, missed rebates can result in costly overpayments. CLM software can prevent

contract value leakage
by flagging rebate terms within documents and generating reports and alerts about rebate-eligible contracts. This capability helps your organization realize the value it's rightfully accrued over the course of a supplier relationship. According to Forrester, teams that use Docusign CLM can realize average savings of $1.5 million in reduced contract value leakage and errors over a three-year period.

Consolidating supplier contracts

When contracts are stored in disparate locations across an organization, from desktops to email drives, determining whether you already have an agreement with a specific supplier is nearly impossible. Housing all agreements in a central and searchable location within a CLM tool helps procurement teams easily find contracts with the same supplier across departments. With this knowledge, teams can eliminate duplication and request a consolidated contract offering volume discounts.

CLM tools store procurement contracts and other agreements in a centralized repository and should enable granular access controls-so only the right people have access. Rather than tracking down contracts manually, teams can filter and search for specific agreements, massively reducing the time it takes to look for agreements. They can also use the repository to leverage historic agreement data: CLM shows organizations what they paid for similar suppliers in the past-giving them another tool in their arsenal to optimize contract terms.

Negotiating favorable terms

Some advanced CLM tools can equip procurement teams with automated risk assessment to speed up contract negotiation. This feature uses AI to scan contracts from new suppliers and compare them against company rules. For instance, if an organization only wants to agree to contracts with 60-day payment terms, AI can find and flag any clauses that don't meet this rule.

AI can also identify price escalations that may be against internal policies but tend to be buried within agreements. Say a supplier embeds a 20% price increase into a contract; advanced CLM software can flag this term for reviewers. Automated flagging saves procurement teams hours of manual work and reduces the organization's risk exposure.

Creating better, faster agreements

Too often, generating agreements leads to a prolonged back and forth with legal, delaying purchases and potentially damaging supplier relationships. CLM tools allow procurement to collaborate with legal to establish pre-approved clauses and templates for faster contract generation. Procurement teams can also create workflow rules within the CLM software that trigger the next step in the agreement process once one is completed, significantly speeding up reviews and, ultimately, the entire source-to-pay process. As a result of this workflow automation, Docusign customer research shows that Docusign CLM users are twice as likely to complete a contract in under two weeks.

Prebuilt integrations with source-to-pay software like SAP Ariba, Coupa, and NetSuite provide added convenience for procurement teams. For example, Docusign CLM offers a Connector for SAP Ariba so procurement teams can create contracts directly within SAP Ariba by pulling details (e.g., payment terms, supplier names) into pre-approved templates. After completion, contracts can be housed in the CLM repository or SAP Ariba, enabling a full audit history for agreements in both systems.

Expedite the source-to-pay process with CLM

Digitization, automation, and AI are changing how procurement teams manage contracts. With end-to-end capabilities, CLM software can speed up the entire procurement process and minimize the time required to generate, negotiate, and manage agreements. A good CLM tool also goes one step further: maximizing value within agreements by tracking obligations across contracts and keeping teams apprised of important dates.

Docusign CLM is an end-to-end solution that helps modern procurement teams automate the full vendor contracting lifecycle and provides the visibility and control needed to maximize the value of each and every vendor agreement.

Learn more about how Docusign CLM can transform your source-to-pay process or contact us to see it in action.

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