Contract Management Solutions
An In-Depth Guide
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What are CLM solutions?
Contract lifecycle management (CLM) solutions are systems that automate the authoring, negotiation, execution, implementation, monitoring and renewal of B2B contracts (with emphasis on supplier contracts). They are often accessed by procurement, legal, sales, finance and other business users throughout the lifecycle of contracts.
As the lynchpin between ‘upstream’ source-to-contract (S2C) processes and ‘downstream’ transactional procure-to-pay (P2P) processes, CLM tools enhance the efficiency of the overall procurement cycle by increasing the speed and quality with which the contract process is completed and by improving collaboration, especially with legal departments. They also improve access to contract metadata and drive more effective and timely purchasing decisions through the reuse of information to create contract terms, as well as notifications of when to take critical actions.
How CLM solutions factor into the S2P process
As mentioned, CLM is the last step of the ‘source-to-contract’ process, which immediately precedes the ‘procure-to-pay’ process. As a result, CLM is sold as both a standalone point solution as well as a part of a broader suite, whether a S2C suite or a full ‘source-to-pay’ (S2P) suite.
CLM solutions are also valuable because of the different end users that can gain insights. Procurement, legal, sales, finance and general business users often access CLM solutions for different reasons. Some CLM providers focus more on procurement or legal as primary users, but in either case, the (often financial) obligations and other associated contract metadata stored in CLM solutions is very relevant to sales and finance users.
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Why CLM solutions are important
While each solution has its own comparative advantages, the CLM value proposition is fairly standard and tends to resonate quickly with organizations regardless of size or industry. Managing contracts can be cumbersome, and using software to assist in the process avoids costly mistakes (e.g., missing a renewal or financial obligation) allows for proactive risk management and increases organizational collaboration and efficiency.
At a bare minimum, CLM solutions usually support bulk upload of legacy contracts so that approved users can access the repository at any time. This enables dashboards, reports and custom notifications. But CLM often goes beyond this Excel-like functionality to also support contract drafting (with embedded negotiation and collaboration tools), risk management, e-signature and more.
The management of contracts both pre- and post-signature is typically enhanced by integrations to other systems, both within the S2P landscape and to other tools, such as email, Slack/Teams and Salesforce. Overall, whether via a point solution or as part of a broader suite, CLM solutions address the core pain point of disparate (or nonexistent) contract management, and many go beyond the above use cases by integrating AI for more advanced capabilities.
How do I know my organization is ready for a CLM solution?
While there may be a perception that CLM is reserved for mid-market organizations or large enterprises, even smaller organizations benefit from the tool. Capabilities other than managing a large amount of contracts, such as perfecting the pre-signature process or essentially filling the role of a full-time legal employee, may be the main appeal, but organizations of all sizes and of all industries have historically had success with CLM implementations.
Some signs that it’s time to step in with a CLM solution are:
- Procurement, sales and legal teams do not have a centralized contract repository.
- You need a robust, secure and automated workspace to manage complex contract information.
- You need to model risks in contracts.
- You need to model pricing, SLAs, currencies, commodities, budgets, etc. to enable profitable commercial relationships.
- You need proactive notifications for key milestones like renewals and obligations.
- You need to quickly compare and draft effective contracts based on approved clauses.
- You want to maximize efficiency in contract creation, negotiation/approval and signing.
- You want to integrate key systems such as ERP, S2P, TPRM, etc. to CLM.
- You want to use AI/ML based on unique requirements to derive strategic, actionable insights from existing contracts.
- You want to better manage contracts written on third-party paper.
If any of the above describes your organization, it’s time to look for a CLM solution.
Some factors to consider when beginning the journey are:
- Cost: While more complex needs likely mean higher costs, many solutions are more basic by nature.
- Contract preparation: CLM solutions are most valuable when they house not only new contracts but also all of an organization’s legacy contracts. This means that companies interested in a CLM solution should ensure that these files are available for bulk upload. Most CLM providers will offer services to ensure a smooth upload and accurate metadata extraction of legacy contracts during implementation.
- Reasons for failure: CLM implementations can fail for a variety of reasons, but among the most common are lengthy implementations and poor ease of use. Therefore, it is important for organizations to play their part in smooth implementations (by ensuring that legacy contracts are available, for instance) and to identify a solution that all stakeholders — not just power users — are able to use.
How CLM is done: Common features of CLM technology
CLM solutions are used to address the full lifecycle of contracts. This begins with existing contracts through the bulk upload of legacy agreements. CLM solutions can store these in a repository which leads to customizable dashboards and reports based on an organization’s contracts. Uploading these agreements also allows for configurable reminders for upcoming renewals and obligations, such as payments, etc. Best-of-breed solutions also offer organization-specific AI models for more granular metadata extraction.
Beyond legacy agreements, the systems will also include clause and template libraries. These work together for the creation of new agreements. Clause libraries may include alternative/fallback clauses. Template libraries can be dynamic and change based on the specifics of a certain agreement (e.g., governing law, industry, etc.).
The above features are all tied together by strong, often AI-based search functionalities. Here, users can access filters and advanced logic to search not only for contracts but also for specific metadata within contracts.
In addition to modeling clauses, obligations and other key information, some systems also support the modeling of more complex financial metadata and risk data as well as hierarchical relationships (subcontractor support, parent-child agreements, etc.).
Beyond the upload of legacy agreements or contracts written on third-party paper, the creation of new contracts is supported with the templates and clauses from the aforementioned libraries. Based on configurable forms, the system determines which templates/clauses are most applicable and generates a full contract for the user to review. Typically, users can make changes in an MS Word or native environment and tag/notify other internal reviewers. Permissions can be configured by power users, often at the contract-level. Most systems support audit logs and change tracking.
Generally, the contracts can then be sent to third parties for review. When the contract is returned to the organization, the system can often highlight risks and in some cases provide recommendations based on the organization’s preferred language. Eventually, the contract can be signed using either a native e-signature tool or an integration with Docusign, Adobe Acrobat Sign, etc. Most systems also include built-in support for amendments.
Finally, it is worth noting that solutions also tend to offer pre-built integrations with common tools. Beyond email and collaboration systems, these may include ERPs, S2P systems and risk management providers/data feeds.
How technology supports CLM —
Top 5 capabilities
These ‘Top 5’ critical digital capabilities stem from the Spend Matters TechMatch workbench — derived from a larger number of requirements scored in the SolutionMap solution benchmark.
The Top 5 capabilities are the highest-weighted critical capabilities that are central to the displayed solution market benchmark. They have been developed by Spend Matters team of analysts and refined by procurement users in tech-selection projects using our market-proven SolutionMap benchmarking dataset and associated TechMatch decision-making tool.
1. Contracting workspace
A robust, secure and automated workspace to manage complex contract information.
You can expect CLM solutions to offer a secure platform for the management of contract information. For example, vendors often grant to access granular, clause-level information from prior versions of contract documents for reference or negotiating purposes. Top vendors in this area may stand out by automatically versioning the overall contract package when an amendment, sub-contract or attachment is changed.
2. Contract repository
The capacity of a CLM system to automatically upload existing agreements into a central contract repository for cross-organizational visibility in one place.
CLM solutions act as contract repositories, for both legacy contracts and contracts that are generated once the solution is deployed. The repository capability is multifaceted; it pertains to both the types of contracts supported and the strength of the native search functionality, as well as template flexibility and mass change for centralization purposes.
Top vendors in this area will support any type of contract while allowing for highly configurable, filtered searches with fuzzy matching and deep drill-down. They will also offer deep metadata extraction of legacy contracts for both searchability and depth of organizational clauses/language.
3. Risk/compliance modeling
The ability to meet traceability and compliance needs of contracts to address potential risks in our value chain.
CLM plays a crucial role in organizational risk management. Whether through identifying risks present in existing contracts or proactively avoiding risks in the negotiation/authoring process, vendors use a variety of different techniques for risk management.
Top solutions for this capability may include clause-level risk scores based on company playbooks, recommended language in the negotiation process to reduce potential liability and more. Some vendors will also rely on strong integrations for this capability, such as integrations with third-party risk feeds for real-time supplier monitoring.
4. Contract drafting
The ability to quickly compare and draft effective contracts based on approved clauses/provisions that meet business needs.
Central to the typical CLM experience is the contract drafting process. Top solutions offer configurable (and/or library-based) templates, clause libraries, guided contracting forms and tight MS Word integrations for efficient contract drafting and negotiating.
Top vendors for this capability will include alternative and fallback clauses in clause libraries, suggest particular clauses or language based on the key contract metadata and highlight/provide recommendations on third-party redlines or edits to comply with organizational playbooks. Many will also include generative AI for assistance, whether through plugins or internally developed models.
5. Commercial value modeling
The ability to enable profitable commercial deals/relationships by robustly modeling pricing, SLAs, currencies, commodities, budgets and more.
Another primary CLM use case is the unlocking of financial value. This is primarily achieved through obligation modeling, which is supported by top CLM solutions and allows organizations to track and fulfill contractual obligations, such as payments.
Beyond obligation management, top solutions in this area will also allow for the modeling of rich pricing data with support for multiple currencies, both direct and indirect spend, and the generating of customized reports from financial data with configurable notifications based on user-defined thresholds, upcoming obligations, etc.
Why selecting CLM technology can be difficult
You have to weigh many factors when choosing any technological product. Here are some of the most important factors you should consider when starting your CLM selection:
- Crowded solution field: There are a lot of providers (see Discover CLM Vendors section below) that all offer slightly different capabilities. It is important to find a solution that addresses the CLM areas most important to your organization (e.g., pre-signature, post-signature or both).
- Specific requirements: Beyond identifying the areas of CLM most relevant to your organization, there may also be specific requirements that a particular CLM solution is better equipped to address than others. Out-of-the-box industry-specific templates or extraction models, for example, may be of interest to a large organization in a highly regulated industry.
- Data preparation: In order to get the most out of a CLM solution, organizations need to upload legacy contracts. The quicker these agreements can be located, the more efficient the CLM implementation is.
- Services: Many CLM solutions offer services to assist not just with implementation but with the bulk upload and organization of legacy contracts to ensure the most accurate and organization-specific extraction. If an organization does not have the people or time to handle this on its own, finding a provider that offers these services could be useful.
- Existing tech stack: For organizations that use ERPs and other S2P applications, it is important that the CLM solution can smoothly integrate with these systems with regular (ideally real-time) data exchange. This also extends to e-signature solutions and collaboration tools, such as Teams or Slack.
How Spend Matters can help you select CLM technology
Spend Matters specializes in procurement technology diligence. In addition to projects and advisory, Spend Matters offers Insider, the only membership community and technology comparison tool of its kind. This includes access to the Spend Matters SolutionMap vendor rankings dataset combined with independent, zero pay-to-play, brutally honest coverage of solution providers, market developments and trends affecting procurement, finance and supply chain markets.
We can help you find a solution that can:
- Digitize and analyze existing contracts and assist with new contracts (drafting, negotiating, redlining, approvals and e-signature).
- Identify and manage risks in your organization’s contracts with proactive notifications and calls to action.
- Produce granular analytics reports and insights based on your organization’s contracts, combined with commercial intelligence to optimize decision making.
Discover CLM vendors
These are the vendors we are currently covering or will soon cover. Visit their vendor directory pages on Spend Matters for a quick vendor overview, demographic information and relevant articles, including vendor analyses.
| Solution Provider | What it does |
|---|---|
| Agiloft | Agiloft is a best-of-breed CLM provider that is known for its flexibility and no-code platform. The provider has made improvements to its AI and more advanced capabilities to compete for both larger and more complex customers as well as smaller/mid-market organizations looking for an easy-to-use solution. |
| BlackBoiler | While not quite a CLM solution, BlackBoiler is often considered against CLM providers because it is a redlining specialist. Organizations that are most interested in contract negotiation and redlining may consider BlackBoiler instead of an end-to-end CLM tool. BlackBoiler is known for its AI-first approach to redlining. |
| BlueBurro | BlueBurro is a contract drafting solution. While not an end-to-end CLM solution, it offers integrations to CLM providers and tackles much of the pre-signature phase of contract management. |
| Certa | Certa is a no-code TPRM provider that offers a CLM module, making it more holistic than some risk-focused providers that do not extend to contracts. Beyond risk, Certa also supports common CLM use cases, such as renewals and drafting. |
| CobbleStone Software | CobbleStone Software is a CLM, sourcing and e-procurement provider that offers a no-code solution. It appeals to organizations of all sizes and has added more advanced, AI-enable features to better compete against best-of-breed providers. |
| Concord | Concord is an end-to-end CLM solution known for its simple user interface. It sells to organizations of all sizes. |
| Conga | Conga is a CLM provider known for its end-to-end solution and advantages for finance users. After merging with Apptus in 2020, Conga established itself as one of the most prominent CLM solutions that goes beyond the typical contract processes. |
| ContractAI | ContractAI, built on AppOrchid’s platform, is an AI-first CLM provider that has in recent years built out more robust, end-to-end CLM coverage. The provider also offers a strong contract analytics solution, which is more tailored toward visualization of existing contract data. |
| ContractPodAi | ContractPodAi is a best-of-breed CLM provider that is strong in all core areas of contract management and also offers configurability with respect to AI. It often sells to legal, but it has built a solution that is just as valuable to procurement departments. |
| Corcentric | Corcentric is a S2P suite provider. It offers CLM but not as a separate product (meaning it is rolled into the platform holistically). |
| Coupa | Coupa is a S2P suite provider with a global footprint. It offers CLM not as a standalone module but as part of the broader platform. It supports end-to-end CLM use cases. |
| DocJuris | While not quite a CLM solution, DocJuris is often considered against CLM providers because it is a redlining specialist. Organizations that are interested in contract negotiation and redlining may consider DocJuris instead of an end-to-end CLM tool. |
| Docusign | In addition to its omnipresent e-signature platform, Docusign also offers contract management solutions, including a CLM option. The software covers the core CLM capabilities, and Docusign often competes against best-of-breed providers. |
| dSilo | While not a pure CLM provider, dSilo is worth including in this list because of its strong, AI-based contract analytics platform. This is not a solution that, for instance, takes care of a contract drafting process (aside from integrations), but it does offer recommendations (including savings recommendations for future contracts) based on existing contract data. |
| ebidtopay | ebidtopay is a S2P suite provider and is quite unique, as it is family-owned and operated. For CLM, ebidtopay covers most necessary use cases, and the tool is most valuable when used in concert with ebidtopay’s sourcing module (for S2C). |
| Evisort | Evisort is a best-of-breed CLM provider that is known for its strong AI and post-signature capabilities, as it began as a contract analytics specialist. However, it has since built out pre-signature capabilities and customer-specific AI models to appeal to organizations looking for the latest advanced functionalities. |
| Gatekeeper | Gatekeeper is a CLM provider that combines common contracting pain points with native TPRM functionalities in an easy-to-use platform. Its solution covers the core CLM use cases and is ideal for organizations that also are interested in risks beyond contracts. |
| GEP | GEP is an S2P suite provider with a global footprint. It is well-known for having a very solid technology offering and robust data model. Its CLM solution covers all the core CLM use cases and leverages its generative AI capabilities. |
| Icertis | Icertis is a best-of-breed CLM provider that has been one of the most well-established solutions on the market due to it having some of the deepest, most advanced CLM functionalities available. |
| IntelAgree | IntelAgree is a growing CLM provider that has built out strong AI features to challenge best-of-breed solutions for large enterprise customers. |
| ISPnext | ISPnext is a S2P suite provider. It focuses on its local market: the Netherlands, Luxembourg and Belgium. It began as an AP automation provider, but now it offers a full suite that includes CLM. |
| Ivalua | Ivalua is a S2P suite provider with a global footprint. Its solution is built on a single tech stack and data model. It offers a configurable CLM solution that covers the core capabilities and extends them with AI. |
| Jaggaer | Jaggaer, formerly SciQuest, is a S2P suite provider with a global footprint. Its CLM solution is part of its broader suite, and it meets the core needs for most customers. |
| Knovos | Knovos is a legal tech provider that offers a CLM solution. It covers the end-to-end CLM scope and offers supplementary solutions, such as one for GRC, that could enhance the CLM process. |
| LegalSifter | While not quite a CLM solution, LegalSifter is often considered against CLM providers because it is a redlining specialist. Organizations that are interested in contract negotiation and redlining may consider LegalSifter instead of an end-to-end CLM tool. LegalSifter is known for its combination AI/human review approach. |
| LexCheck | While not quite a CLM solution, LexCheck is often considered against CLM providers because it is a redlining specialist. Organizations that are interested in contract negotiation and redlining may consider LexCheck instead of an end-to-end CLM tool. LexCheck is known for its AI-first approach to redlining. |
| Malbek | Malbek is a CLM provider that offers strong functionalities for mid-market and large enterprise customers. Its AI advancements have made it an appealing competitor against best-of-breed providers. |
| Mercanis | Mercanis is an S2C suite that includes CLM capabilities as part of its broader offering. It features a modern, user-friendly platform. |
| MeRLIN | MeRLIN is a mid-market S2C suite. Its CLM capabilities are best used in conjunction with its sourcing, supplier management and spend analytics modules. It supports CLM capabilities, such as a contract repository, authoring and proactive alerts. |
| oboloo | oboloo is a supplier management, contract management and analytics solution focused on simplicity. As a result, it is a best fit for organizations that do not need the most advanced CLM bells and whistles but want to tackle renewals, an updated repository and improved communication. |
| OneMarket by LogicSource | OneMarket is LogicSource’s S2P suite. Its CLM solution is part of its broader suite and is best used in conjunction with the other modules. |
| Onventis | Onventis is an S2P suite provider. Its CLM offering is part of its broader suite. |
| Oracle | Oracle Procurement offers a CLM module as part of its broader offering. Users can create new contracts and mitigate supplier risk, among other features. |
| Pactum | Pactum, while not a CLM provider, is often considered against CLM solutions. Pactum is an autonomous negotiation solution that works with large ($5B+ revenue) organizations to automatically negotiate better contracts, commercial terms and more. |
| Prevalent | Prevalent is a TPRM provider that offers a CLM module, making it more holistic than some risk-focused providers that do not extend to contracts. Beyond risk, Prevalent also supports common CLM use cases, such as renewals and drafting. |
| Proactis | Proactis is an S2P suite provider. Its CLM offering is part of its broader product suite, so it is best used in conjunction with other modules. |
| Procurence | Procurence is a S2C provider that has long specialized in supplier management and recently added a dedicated contracts module. |
| Raindrop | Raindrop is an S2P suite provider. It is designed for small to medium-size enterprises. Its contract management module supports contract authoring, a repository and other features. |
| SAP Ariba | SAP is an S2P suite provider with a global footprint. Ariba is the company’s S2P platform. Its CLM module handles the core capabilities customers would expect, but it also partners with Icertis for organizations with more complex needs. |
| Scanmarket | Scanmarket is a S2C suite that has bolstered its CLM capabilities through its 2021 acquisition of Symfact. Its CLM module is best used in conjunction with its other modules. |
| SimpliContract | SimpliContract is an end-to-end CLM provider that has added more advanced, AI-based capabilities to better compete against best-of-breed solutions. |
| Sirion | Sirion is a best-of-breed CLM provider that has been one of the most well-established solutions on the market due to it having some of the deepest, most advanced CLM functionalities available. |
| TechnoMile | TechnoMile is a CLM provider geared toward government contracts as well as aerospace and defense companies. |
| Terzo | While not a pure CLM provider, Terzo is worth including in this list because of its strong, AI-based contract analytics platform. This is not a solution that, for instance, takes care of a contract drafting process (aside from integrations), but it does offer recommendations (including savings recommendations for future contracts) based on existing contract data. |
| Volody | Volody is a CLM provider that has added more advanced, AI-based features to better compete against best-of-breed solutions. |
Contract Management in the Content Hub
