The information age has brought numerous advantages to modern life, particularly to the business world. As the business world has evolved with pioneering new technologies, so has the ways that contracts are negotiated, managed, and tracked for performance. This is often done utilizing a modernized process that involves the use of contract management software to actively manage a contract. This process is called contract lifecycle management, and it is often used in conjunction with traditional contract processes to create the terms of a contract. 

However, software alone does not make this process work. It is the combination of software, processes, and understanding of modern technologies and contracts that allows for the creation of modern contracts. With that in mind, here is how you can use contract lifecycle management to create contracts that work for you. 

21st century contract management

Like the variety of other business technologies that have shaped the modern business world, the use of contract management software has grown significantly in recent years. This has led to the adoption of the contract lifecycle management process. However, utilizing this process requires the use of a specific type of contracts to govern different types of relationships, including those with strategic business partners, suppliers, and manufactures. Understanding the KPI’s required to make these types of contracts is crucial to your success in the modern business world. Without knowing what you are hoping to gain out of a business relationship, it is impossible to create a modern contract that can dynamically be tracked for performance. 

Understanding contract lifecycle management 

To actually track contracts for performance, many companies now utilize contract lifecycle management in their contract processes in order to ensure that their contracts are up-to-date and reflect exactly what a business is looking to get out of a contract. This process govern everything from the contract requesting process, to the authoring, negotiation, and approval of the contract. Once a contract is negotiated and approved, it is then time for a business to actually track the contract for performance. This includes carefully monitoring contracts for milestone dates, compliance, and any other important elements that are set within the contract. Utilizing contract management software to do this for you can automate some of this, including creating notifications around these points of compliance. 

Once a contract is tracked for compliance, it is important to make sure that it meets the targets that you have set out. If it does not, then it might be the case that your contract is underperforming. If this happens, it is possible you may want to end or renegotiate the contract depending on your relationship with the other party. It might be the case that the other party made an innocent mistake, or it might be the case that they are actively and maliciously breaching the terms of the contract and seeing what they can get away with. No matter the case, it is important that you are aware of this, and contract lifecycle management ensures that you are aware of how your contracts are performing. 

In summary

Utilizing contract lifecycle management is an important part of modern contracts. Not only does it help you better create contracts, but it also helps you to analyze them for performance and assess their value to your company. Used along with contract management software, this process can help to create modern contracts that better reflect the dynamic modern business world.