Contract Lifecycle Management – a Great Introduction

Contract management generally is a topic that has been under-played and under-valued by the procurement profession, including our Institutes, although we now see signs that this is changing. In the meantime, the IACCM (International Association for Contract & Commercial Management) has become an important player in the field, and we will be reporting on their conference this week.

And whilst contract lifecycle management, or CLM, is probably one of the most uninspiring acronyms in the procurement technology space, and one that many people don’t fully understand, it is also one of the most important.

It overlaps with both the sourcing and transactional procurement cycles and also provides a foundation for other supply management processes. So it’s well worth getting to grips with it, at least to understand the implications and so you can nod wisely next time your boss (or that smart-alec at a procurement conference) asks you what you think of CLM!

Our Spend Matters US colleagues, Jason Busch (Group Managing Director) and Michael Lamoureux (Contributing Analyst) have published a short paper that certainly moved my knowledge along on this topic. It is really an introduction to what is going to be a series of articles and papers on the topic, but it serves as a very useful starting point in terms of what CLM is all about. Here is a short extract; and you can download the whole paper here.

Where Does CLM Start and End?

From the viewpoint of a sourcing category manager, the full contract lifecycle management process is category management on steroids. It's the process required to identify, source, procure, manage and realise the full potential of a category – any category. From the viewpoint of a CFO, the full contract lifecycle management process is a way to identify, realise and record the savings an organisation needs. However, from our process-centric viewpoint, it's an extended S2S/S2P process that requires some very specific technology, process and services support to be truly successful that goes (well) beyond what a sourcing suite or procurement suite vendor will offer you.

The requirements for this support are very extensive. A full description could easily take a volume. In fact, books have been written about the subject (including Enterprise Contract Management by Anuj Saxena that was co-sponsored by the IACCM).

However, since we're primarily concerned with the technological (and platform) requirements, as opposed to the process and service support, so that we can review the existing solutions for contract management on the market, their maturity and their appropriateness to your needs, we’re going to focus on those.


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