The vendors considered
Exploring the actual market state of the top 5 capabilities
1. Contracting workspace
The ability to host a robust, secure and automated workspace to manage complex contract information.
You can expect Contract Lifecycle Management solutions to offer a secure platform for the management of contract information. For example, vendors often allow users 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.
Contract Lifecycle Management solutions act as contract repositories, both for legacy contracts and contracts that are generated once the solution is deployed. The repository capability is multifaceted; it pertains to the types of contracts supported, the strength of the native search functionality and template flexibility and mass change for centralization purposes.
Top vendors in this area will support any type of contract and offer highly configurable, filtered searches with fuzzy matching and deep drill-down. They will also conduct 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 the value chain.
Contract Lifecycle Management 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 Contract Lifecycle Management experience is the contract drafting process. Top solutions offer configurable and/or library-based templates, clause libraries, guided contracting forms and tight Microsoft 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 Contract Lifecycle Management use case is the unlocking of financial value. This is especially achievable 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 ability to generate customized reports on financial data with configurable notifications based on user-defined thresholds, upcoming obligations, etc.
What does a contract lifecycle management solution do?
Contract lifecycle management solutions are systems that automate the authoring, negotiation, execution, implementation, monitoring and renewal of B2B contracts (with an emphasis on supplier contracts).
Why buy contract lifecycle management solutions
As the lynchpin between ‘upstream’ source-to-contract processes and ‘downstream’ transactional procure-to-pay processes, contract management tools enhance the efficiency of the overall procurement process by increasing the speed and quality with which the contract process is completed and improving collaboration, especially with legal departments. They also improve access to contract information and drive more effective and timely purchasing decisions through the re-use of information to create contract terms and notifications of when to take critical actions.
How ‘Market State’ is derived from the SolutionMap dataset
These ‘Top 5’ (of 21) critical digital capabilities stem from the Spend Matters TechMatch workbench — derived from 119 requirements scored in the CLM Spring 2024 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 the 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.
Spend Matters® SolutionMap Procurement Technology Intelligence
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