A company's contracts represent its commercial relationships. Yet in many companies, they continue to be managed in a haphazard way across the enterprise.
If a question or dispute arises, contracts and related documents need to be easily accessible by the lawyers for review. "Without a central repository, critical time is lost searching for the appropriate documents, and it increases the potential for not meeting all performance obligations," Jessen says.
Citing an example of what can go wrong without contract lifecycle management software, Potts referred to the 2009 bankruptcy of outsourcing giant Satyam Computer Services, which then suddenly announced it was closing its doors. Potts said one company that had not automated its contract processing with CLM technology needed four months to determine what IT projects it had ongoing with Satyam, a process that could have been completed in hours with a CLM system.