Contract Lifecycle Management in IT: How to Do it the Smart Way

The tech industry is growing faster than any other sector. New startups emerge every month. The US market makes up 33% of the industry ($1.8 trillion), and 50% of this share belongs to tech and software services. Like any business, IT companies deal with dozens of contracts in their operations. 

Source: Comptia

With remote work on the rise, companies need new ways to cut paperwork and deal with documents in a simple, compliant, and secure manner. Reliable IT contract management software is a savior both for startups and enterprises.

Let’s explore why IT businesses need an advanced contract lifecycle management (CLM) solution. What benefits does it bring, and what features of CLM IT software are critical for tech companies?

What problems can CLM solve in IT?

IT companies hire employees, draft software and service contracts, and sign partnerships. Typical contracts also cover master service agreements (MSAs), statements of work (SOWs), and non-disclosure agreements (NDAs). As papers are piling up, the IT sector grapples with quite a few challenges: 

  • Complex regulatory landscape
  • Poorly accessible paper-based contracts
  • Sensitive data protection  
  • Managing high-volume contracts

Let’s find out how IT contract management software can help overcome these challenges.  

Benefits of IT document management software

A CLM digitizes paperwork processes. How exactly does this help IT businesses?

  • Easier compliance with standards and regulations. Anyone in medtech must follow FDA regulations on data storage and transmission. IT service contract management software helps you stay compliant in your work and documentation.
  • Faster contract drafting. You can quickly create error-free contracts with clients, resellers, data centers, and other partners using compliant and up-to-date templates.
  • Fast and secure contract turnaround. All authorized parties can draft, store, access, and e-sign all contracts in one place.
  • Full visibility of contractual obligations. With CLM, all parties can quickly review the highlighted dates and deliverables without missing any deadlines or conditions.
  • 24/7 tracking of contract status. IT service contract management software allows you to track contract statuses. It automatically alerts stakeholders about approaching due dates.
  • Convenient approval process. No more emails with endless threads. Contract managers can set up standardized approval workflows for different scenarios and stakeholders. 
  • Real-time report access. CLM allows you to access all your documents anytime from any device

CLM for IT businesses is a go-to choice to keep contractual documentation safe, well-organized, accessible, and visible to every stakeholder. But contract management solutions are not designed for lawyers only. Let’s check who else could use CLM in your company.

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What IT industry professionals could use CLM?

IT document management software would be a big help for many departments across the project lifecycle.  Which of your employees might be most interested in adopting CLM?

  • In-house legal team is the primary target audience here. They prepare and verify all company contracts. But it takes too much time to draft contracts manually. With IT document management software, lawyers can save up to 40% of their time—and avoid errors.
  • Business developers and sales can use CLM to speed up the sales cycle. They can sign typical agreements quickly and without lawyers’ review. 
  • Project managers (PMs) act as a go-between for developers and clients. They need all the contract details at hand to sort out any issues.
  • HR specialists deal with hiring and contracting that come with a big stack of paperwork. CLM lets them draft and finalize job contracts, NDAs, and other documents much easier.
  • Auditors and financial controllers use CLM to evaluate performance and stay on top of financial operations. It is an excellent way to keep up with contract changes, too.

Your company might want to add other stakeholders to this list. The practices described below will benefit anyone using IT contract management software.

Best practices for using CLM in IT

Follow these hands-on suggestions to implement a CLM solution and optimize your processes:

  • Opt for cloud-based AI-powered CLM with a centralized and shareable contract repository
  • Set automated alerts for any new contract or modification for the responsible parties 
  • Choose a solution that lets you bulk update the templates to comply with new regulations
  • Set up version control to avoid duplicating or missing edits
  • Ensure that CLM can adjust to different scenarios of sales workflow, HR onboarding, and auditing 
  • Divide permissions into role-based and feature-based to enhance security
  • Maintain a complete audit trail for the full visibility

These real cases from our practice show how IT document management software can transform the contract process.

Success stories

Three clients from the gaming, delivery, and corporate communication sectors adopted AXDRAFT software to make a difference in their businesses.

Plarium

Source: Plarium

Plarium, a developer of mobile, browser, and social media games, asked AXDRAFT to streamline their paperwork. It included MSAs, NDAs, supply agreements, and intellectual property documents. Before AXDRAFT, their lawyers spent 45 minutes daily drafting each document manually. Labor costs skyrocketed. 

What did Plarium get partnering with AXDRAFT?

  • Fully integrated CLM software in five days
  • 16 times shorter drafting time, down from 45 minutes to 2.45 minutes per document
  • 1,267 hours saved annually
  • $114,075 saved annually

With AXDRAFT, the company can deliver perfectly formatted and error-free contracts in minutes. Their legal talent can now focus on developing trusted business partnerships instead. 

Glovo

Source: Epravda

As the global delivery player, Glovo understands that streamlined paperwork means a productive company. The client had an issue with sales and service agreements drafted by non-lawyers. They hired the AXDRAFT team to automate these documents using a library of lawyer-approved templates.

Below are the results we achieved for Glovo:

  • Launch time: ten days
  • Drafting time shorter by 85%, from 35 minutes to 5.25 minutes per document
  • 6,743 hours saved annually
  • $609,900 saved annually

By streamlining paperwork, Glovo refocused its budget. Now it can invest more in human resources and quality of service.

Slack

Source: Slack

Since 2009, Slack has been a reliable communication platform for teams all over the world. The company asked our developers to create and integrate a self-service page. Their customers had to be able to draft DPAs without contacting the legal department. This self-service tool lightened lawyers’ workloads and achieved the following results:

  • Launch time: one day
  • 100% faster drafting (from 30 min to 0 min—full self-service)
  • 1,600 lawyer hours saved annually
  • $190,000 saved annually

Slack added more customer value to its services. It gave people the freedom to create documents whenever they needed them.

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Bottom Line

Manual contract management in the IT industry became a burden. It eats into work hours and dozens of thousands of dollars yearly. Automated IT service contract management software allows tech businesses to streamline contractual paperwork and create a unified cloud-based repository for drafts, templates, and copies. It helps build effective collaboration and transparent relationships between clients and partners.

AXDRAFT lets you automate contracts across the lifecycle. Freeing you from repetitive paperwork, we save your time for creative tasks. Contact us today and request a demo to see how our CLM software can create a solid base for your long-term partnerships. 

FAQ

What is service contract management?

Service contract management is handling contracts between the service provider (software developer) and the recipient (client).

What is CLM software?

CLM software is a tool that allows stakeholders to manage every step of the contract process digitally. It simplifies drafting, editing, and approval, helps track changes, and ensures compliance. The program can notify stakeholders about approaching due dates and provide access to documents based on the assigned roles. All this is topped up with bank-level security and real-time document access. CLM software works with any contracts. 

What does a contract management tool do?

It allows users to draft, change, approve, sign, and review contracts online. Users can share contracts and collaborate on them. Documents are accessible in real-time from any device based on the assigned roles. The CLM tool ensures that all contracts are up-to-date, error-free, and compliant with the latest regulations. 

What is an IT-service contract?

An IT-service contract is a legal contract that determines the scope of work, duration, payment, and other terms of a project. IT companies sign these contracts with their clients or sub-contractors. An IT service contract might also include non-compete, non-solicitation, or confidentiality clauses. 

Why is IT-service contract management difficult?

IT CLM faces multiple roadblocks: too many contracts circulating within the company, paper-based processes still present, and the obligation to follow many country- or industry-based regulations. The need to protect sensitive data and make frequent changes across projects bring about new problems in the mix.  

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