9 Stages of Contract Lifecycle Management: From Conception to Storage

When people think about contracts, negotiations and signatures come to mind. However, full contract lifecycle management can start before the parties meet and last years into the future.

In this article, we go through every stage of contract lifecycle management and how a electronic contract repository can help you take control over the entire process.

We’ve recently released an article about electronic contract repositories that answers any questions you may have about them.

To see first hand how SignTime can help with contract lifecycle management, sign up for a free trial today.

What is contract lifecycle management (CLM)?

Contract lifecycle management is all the processes involved in bringing contracts through every stage of the contract lifecycle. The stages go from the request for a contract through to contract renewal or completion. 

Some companies use the term contract lifecycle management (CLM) to mean the tools used to automate or streamline the entire process. In that sense, contract lifecycle management can also be a synonym for contract management software (CMS).

Let’s take a look at the stages of the contract lifecycle.

9 stages of the contract lifecycle

Different articles use a different number of contract lifecycle stages. For example, some people use a five-stage model:

• Contract creation and authoring
• Contract collaboration and negotiation
• Contract award and execution
• Contract administration
• Contract close-out or renewal

Others use seven or nine stages (as we do here), but for the most part, they encompass the same processes. These articles just separate certain steps of contract lifecycle management into two or more processes.

One exception is the first stage below, which highlights that contract lifecycle management really does start before the actual creation and authoring of the contract.

Stage 1: Contract request

Before the first draft of a contract is written, there needs to be a reason for contract creation. This is different from Stage 3 below (contract negotiation) because it is more basic. 

In this stage, there’s simply the recognition that the parties need a contract. One common example comes from sales contracts. During a demo, the salesperson and prospective client will agree that it is worth drafting an agreement. 

The contract may or may not be signed, and there will likely be changes during the negotiation stage. However, there is at least an initial agreement that it is worthwhile to write a contract.

Stage 2: Contract authoring 

Once it is agreed that a contract should be drafted, one party takes the initiative to author the initial contract draft. For the example above, it is the party selling something that will draft the contract.

Stage 3: Contract negotiation

Once an initial draft contract has been shared among the parties, it is time for negotiations. Parties will often negotiate about more terms than just the price. This is what necessitates the next major step of contract lifecycle management.

Stage 4: Approval and legal review

Since many terms will change during red-lining and negotiation procedures, it is hard to fully comprehend the legal ramifications of the changes. Salespeople and procurement officers aren’t lawyers, and they may inadvertently add unenforceable or vague language to a contract.

In this stage, the higher ups and their legal counsel take the time to read and consider the contract. When they are satisfied that the contract meets their needs and is legally executable, it is time to move to the next stage.

Stage 5: Execution and e-signing

The contract has been agreed upon and approved by all parties. It’s now time to sign the document. Traditionally, with paper contracts, this was the longest stage in the entire process. The delay between agreement and signing also led to many deals falling through.

Now, documents can be securely e-signed on a mobile phone from anywhere. With SignTime, this process can now be done in minutes.

To see how SignTime can speed up contract lifecycle management, try our free trial today.

Stage 6: Contract storage

Traditionally, this stage of contract lifecycle management took place in large filing cabinets taking up expensive real estate. Now, it is done in a cloud contract repository. This saves time and money, as well as adds a higher level of safety and security. 

It also makes the next step much easier.

Stage 7: Find and consult contracts

SignTime makes it easy to find your contracts by adding multiple tags to each document. Using these tags, such as names, dates, and document type, you can find any file in seconds.

This makes it simple to consult contracts and confirm that all parties are living up to their obligations as well as getting value out of the agreement.

Stage 8: User activity and reporting

Signing a contract is easier than ever, but all parties still need to perform all of the activities they agree to. This is the stage of contract lifecycle management where the activities agreed to in the contract are performed. In addition, these actions are recorded and reported to confirm all obligations are being met.

Stage 9: Contract renewal, renegotiation, or completion

After all the actions required under a contract have been performed, it is time to consider what should happen at the end of the contract period. Depending on the terms of the contract, there are three possible end points:

• Renewal: Some contracts can be renewed, for example your Microsoft 365 subscription. 
• Renegotiation: Some contracts come up for renegotiation at the end of each period, for example a lease or employment contract.
• Cancelation/completion: You may wish to cancel a renewable contract, or a contract may have specific terms that once completed are not eligible for renegotiation. For example, an agreement with a contractor to renovate your kitchen cannot be renewed, as the kitchen has already been renovated.

SignTime helps you through every stage of contract lifecycle management

Contract lifecycle management (CLM) has become synonymous with contract management software. That’s because so many time-consuming and expensive stages of contract lifecycle management can be made easier with great contract management software. 

SignTime helps you draft, edit, send, e-sign, search, and store contracts securely in the cloud. It’s with you during every stage of contract lifecycle management, making each step easier, faster, and cheaper.