The Six Stages of Contract Lifecycle Management for Enterprise Leaders

Contract Lifecycle Management (CLM) is critical for managing risk and optimizing business processes in large organizations. When companies handle hundreds or thousands of contracts across procurement, sales, human resources, and other functions, they face two outcomes. Effective processes can help contain risk and enable stronger business relationships. Weak processes introduce delays, enable financial leakage, and increase compliance failures. A research shows that moving to automated CLM can cut erroneous payments by as much as 90% and reduce manual review work in legal teams by up to 85%. This review breaks down each of the six key CLM stages— Request, Authoring, Negotiation, Approval, Execution, and Renewal. For each, we identify common enterprise risks, specific benefits of automation, and practical steps for decision makers.

Why Executives Should Focus on CLM Maturity

Contracts define the terms, risk exposure, and performance of most business relationships. Relying on manual processes introduces avoidable delays and increases the chances of missing key obligations or approving one-sided terms. As contract volumes and complexity continue to rise, especially in remote or cross-border work, automating CLM is now a business requirement as well as a legal project. An effective CLM platform not only speeds up contract execution but also supports compliance, audit readiness, and better business insights. The following breakdown gives an outcome-focused view of each CLM stage and recommended actions.

1. Request (Initiation)

Frequent Problems

• Incomplete or confusing contract requests due to unstructured intake
• Email and spreadsheets introduce errors and delays
• Manual legal triage creates backlogs

How Automation Helps

• Web-based forms ensure all required data is collected
• Automated routing sends requests to the right legal or commercial/business leader based on pre-set logic, such as deal size or business unit
• Dashboards provide a live view so staff do not need to email for status updates

Example: A sales manager submits an NDA request through the company’s CLM portal. Customer name and relevant details are pre-filled from the CRM. The system routes it immediately to the appropriate legal owner with the business rationale attached.‍

Results:

• Time from request to draft drops by 50–70 percent
• Legal triage touch time falls to nearly zero

2. Authoring (Drafting)

Frequent Problems

• Manual drafting increases errors and duplicative effort
• Outdated templates mean higher legal risk
• Siloed processes make version management and audits challenging

How Automation Helps

• Standardized templates and clause libraries ensure consistent, up-to-date legal language
• Key data is auto-filled for compliance and speed
• Live collaboration shortens redlining cycles

Example: A legal operations manager uses a pre-approved master services agreement. The platform selects the correct regional clause and auto-inserts liability terms based on deal value.‍

Results:

• First-draft errors drop by more than 80 percent
• Draft to approval cycles fall from weeks to days

3. Negotiation

Frequent Problems

• Version control problems from contracts exchanged by email
• Manual redlining stretches timelines and increases the risk of missed changes
• Poor visibility slows review and risk resolution

How Automation Helps

• Cloud-based redlining provides one source of truth and full audit trails
• All stakeholders can collaborate in real time
• The system notifies users of next steps

Example: Both internal and external parties negotiate using the CLM platform. All redlines carry timestamps and user details.‍

Results:

• Negotiation cycles may be halved
• Contract version disputes are nearly eliminated

4. Approval

Frequent Problems

• Approvals get stuck without clear routing or reminders
• Risky clauses might slip through if escalation is missed
• No digital audit trail undermines compliance

How Automation Helps

• Rule-based workflows guarantee approvals align to company policy, including escalation for risk
• Automated reminders prevent late or missed approvals
• The system maintains a complete log for audits

Example: A contract with major deviations automatically routes to risk management for review, while standard templates are fast-tracked.‍

Results:

• Missed approvals nearly eliminated
• Approval time drops by 40–60 percent

5. Execution (Signature)

Frequent Problems

• Paper signatures, especially with parties in different countries, delay deal closing
• Signed contracts get lost in emails
• No central repository makes it hard to locate signed copies

How Automation Helps

• Integrated e-signature gets deals signed faster and more securely
• Dashboards show which items are outstanding
• Signed agreements are automatically stored in the contract repository

Example: A supplier agreement is signed electronically by all parties. The executed copy is immediately available to legal and contract management teams.‍

Results:

• Signing cycle drops from days to hours
• Administrative time falls by up to 90 percent

6. Renewal and Post-Execution Management

Frequent Problems

• Renewals tracked in spreadsheets lead to missed deadlines or unfavorable auto-renewals
• Obligations forgotten or tracked inconsistently, leading to compliance gaps
• Contract retention rules not enforced, raising regulatory risk

How Automation Helps

• Automated alerts notify teams ahead of renewal deadlines
• Dashboards track deliverables and obligations
• Policy-driven archiving ensures compliance

Example: Ninety days before a key client contract expires, legal, finance, and business owners all receive an automated prompt to review and action.‍

Results:

• Missed renewals drop by over 70 percent
• Ongoing obligation compliance moves from inconsistent to systematic

Manual vs. Automated CLM: Key Differences

Measurable Outcomes for Automation

Executives should focus on improvements such as:

• Cutting contract cycle times from months to days
• Reducing legal time per contract from hours to minutes
• Clause-related errors reduced by more than 80 percent
• Full audit trails for compliance certifications, such as SOX or ISO
• Higher sales close rates and faster revenue recognition

Companies can cut erroneous payments by as much as 90% and legal review touch time by 85%. Contract-related disputes and compliance failures also drop by half or more.

Impact by Function

Finance:

• Better insight into spend and payment error reduction
• Faster invoice approval and improved vendor compliance
• Simplified audit response and policy enforcement

Sales:

• Quicker customer agreement and renewal turnaround
• Higher win rates from fewer contract delays
• Clear view of contract status, renewals, and deliverables

Executive Action Checklist

1. Match current pain points to the six CLM stages to target automation
2. Identify high-risk or high-value contract types and units
3. Pilot automation with attention to cycle time and compliance gains
4. Build a cross-functional team with legal, finance, procurement, and sales
5. Track outcomes such as revenue impact, audit findings, and business agility

Leading enterprises now treat CLM technology as essential infrastructure. By examining contract workflows, quantifying improvement areas, and implementing CLM automation, leaders can improve compliance, manage risk, and improve business performance.

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