By Jason Smith Senior Principal, Strategy & Transformation at Conga and
Karthik Radhakrishnan, Director, Contract Solutions at Epiq
As organizations evolve, their approach to managing contracts must also adapt. Contract Lifecycle Management (CLM) has matured from simply a document management tool into a strategic discipline, driving efficiency, compliance, and value across the business. However, many organizations remain challenged by fragmented systems, manual processes, and unclear ownership.
According to Epiq expert Karthik Radhakrishnan, "creating greater efficiencies, visibility, and insight with your organization’s contracts, CLMs can work hand-in-hand with AI capabilities to take contracts management to the next level. When doing so, organizations will consider the maturity of their CLM, AI, and the intersection of the two." This post outlines a practical, maturity-based framework for advancing CLM capabilities with the power of AI across three key dimensions: people, process, and technology.
Understanding CLM maturity
Most organizations fall somewhere along a five-stage CLM maturity model:
- Ad hoc: Highly manual, decentralized contract creation and storage. Limited visibility and high risk of non-compliance.
- Basic: Centralized repository and standardized templates offer improved control, but automation and integration remain minimal.
- Structured: Defined workflows and approval processes with early reporting capabilities and some performance tracking.
- Integrated: Contracts are managed as data assets. Advanced analytics, cross-functional integration, and KPI tracking are in place.
- Optimized: CLM is fully embedded in business strategy, powered by AI and predictive analytics, driving proactive decision-making and continuous improvement.
People: aligning roles and responsibilities
As maturity increases, organizations shift from siloed ownership to cross-functional collaboration:
- Legal focuses on risk management and compliance but must work closely with sales, procurement, and finance to streamline review processes.
- Sales and operations need faster cycle times and visibility into obligations and renewals.
- Contract managers become stewards of process optimization, performance tracking, and contract value realization.
Establishing clear governance, defined roles, and ongoing training are critical enablers at every stage of maturity.
Process: moving from reactive to proactive
Transitioning from reactive to proactive contract management is essential for enhancing process maturity, which measures an organization’s ability to manage contracts consistently and in compliance with policies.
A proactive approach anticipates challenges, engages stakeholders early, and focuses on continuous improvement through feedback and performance data. Key elements include standardizing procedures, utilizing automation, and training staff for effective management. Engaging stakeholders strengthens relationships, while continuous improvement involves refining processes and establishing a risk management framework.
Ultimately, this shift enhances compliance, reduces risks, and increases efficiency, positioning organizations for success in a dynamic business environment. Process maturity reflects an organization’s ability to manage contracts consistently, efficiently, and in compliance with policy:
- Begin by standardizing templates and clause libraries.
- Introduce structured approval workflows and centralized storage.
- Evolve toward integrated performance tracking, risk mitigation strategies, and full lifecycle governance, from request through renewal or termination.
Mature CLM functions embrace continuous improvement and adapt processes based on data insights and changing business needs.
Technology: enabling scale and intelligence
Technology plays a pivotal role in advancing Contract Lifecycle Management (CLM) by enabling both scale and intelligence. It serves as a key driver, facilitating improvements across various stages of the contract process. Through sophisticated solutions, organizations can streamline operations, enhance efficiency, and leverage data insights to make informed decisions, ultimately transforming how contracts are managed and executed:
- Early systems offer basic document generation and repository features.
- Mid-stage solutions incorporate automated routing, clause extraction, and integration with CRM and ERP tools.
- Advanced platforms leverage AI for predictive analytics, redlining automation, and performance forecasting.
The goal is to treat contract data as fuel for the business, enabling visibility, automation, and strategic insight.
Roadmap to CLM advancement
To enhance Contract Lifecycle Management (CLM) within an organization, it's crucial to follow a structured roadmap that addresses key components of the process. This roadmap provides a comprehensive approach, guiding teams from initial assessments to optimization and expansion, ensuring that all aspects of CLM are effectively addressed. Here are the essential steps to achieve CLM advancement:
- Assessment and planning: Conduct a contract inventory, process mapping, and gap analysis.
- Foundation building: Develop templates, define metadata, and roll out training programs.
- Technology implementation: Configure systems, integrate with existing tools, and apply AI to historical data.
- Enhancement and expansion: Monitor performance, collect feedback, and enable advanced features to scale impact.
Conclusion
Improving CLM maturity is not a one-time project; it’s an ongoing journey. Organizations must embrace this journey by aligning their teams, streamlining processes, and strategically deploying technology to facilitate smooth operations. This approach not only reduces risk but also accelerates business outcomes and unlocks the full value of contracts. By fostering a culture of collaboration and leveraging innovative solutions, businesses can continuously enhance their CLM practices.
The right tools and strategies can help mitigate challenges and seize opportunities within the lifecycle of contracts, ultimately leading to more informed decision-making and stronger partnerships. To learn more about how to take your CLM to the next level, visit Conga’s resource hub, where you can find valuable insights and solutions tailored to your needs.
Ready to take the next step in your CLM modernization journey? Explore Conga's CLM Maturity Model and Maturity Survey and take to benchmark your organization's current capabilities and identify specific opportunities for growth.
