“Nearly 60% of businesses say poor contract management leads to financial losses every year.” (Gartner, 2024)

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Contracts touch every part of a company’s operations, from vendor deals to renewals. Yet, many teams still rely on spreadsheets and scattered files. In this article, we’ll look at why effective contract lifecycle management (CLM) matters and how it helps companies cut costs, stay compliant, and work smarter.

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What is Contract Lifecycle Management (CLM)?

Contract Lifecycle Management (CLM) is the process of managing a contract from creation to renewal or expiry. It automates drafting, negotiation, and execution to improve accuracy, ensure compliance, and reduce risks, helping businesses save time and manage contracts more efficiently.

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Why is Contract Lifecycle Management Important?

Contract Lifecycle Management (CLM) is essential for businesses. It reduces the manual effort in managing contracts, ensures compliance with regulatory changes, and mitigates risks associated with missed deadlines. By streamlining each stage, CLM improves efficiency and ensures contracts are handled consistently. 

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Here are the key reasons why CLM is critical for effective contract management:

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Time-Consuming Manual Processes: Without CLM, managing contracts manually can be inefficient and prone to errors. Automating tasks significantly reduces the time needed for drafting, approvals, and storage.

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Frequent Regulatory Updates: As regulations change frequently, CLM software helps track and update contracts to maintain compliance, preventing costly legal risks and maintaining good standing. 

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Prolonged Negotiation Cycles: Negotiations often involve multiple rounds of revisions. CLM tools streamline this process, facilitating faster contract approvals and minimizing back-and-forth communication.

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Missed Renewal Opportunities: CLM software automates alerts for renewal dates, helping businesses avoid any overlooked renewals and ensuring valuable contracts are renewed on time.

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Contract Loss and Mismanagement: Manual handling can lead to lost or misplaced contracts. A centralized CLM system securely stores all contracts, reducing the risk of loss and ensuring secure accessibility.

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Contract Lifecycle Management: Key Differences Between Buy-Side and Sell-Side Contracts

Contract Lifecycle Management (CLM) requires different approaches for buy-side and sell-side contracts. Buy-side focuses on cost reduction, while sell-side aims to boost revenue. Despite differences, both share essential aspects like risk management and compliance. A unified CLM system can be beneficial to both.

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The table below highlights the primary differences and similarities between buy-side and sell-side contracts. It also shows how each approach aligns with contract lifecycle management processes.
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Benefits of Contract Lifecycle Management

Contract Lifecycle Management (CLM) software provides a structured approach to managing contracts, from drafting to renewal. By automating processes and ensuring compliance, CLM reduces risks, lowers costs, and enhances efficiency. It also improves decision-making with real-time insights and streamlined workflows. 

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Here are the key benefits of implementing a robust CLM system: 

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Streamlined Contract Tracking and Status Visibility

CLM offers real-time tracking for contracts, providing insights on every stage. This visibility ensures that nothing gets missed, reducing delays and improving efficiency. 

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Enhanced Compliance and Reduced Risk Exposure

Automated compliance checks help identify potential risks early. This ensures that contracts adhere to legal and regulatory requirements, which reduces costly errors and non-compliance risks. 

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Increased Productivity and Lower Administrative Costs

By automating routine tasks, CLM software reduces manual work and saves time. This frees up time for staff to focus on higher-value activities, which in turn reduces administrative expenses. 

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Real-Time Insights for Better Decision-Making

Advanced analytics provide actionable insights based on real-time contract data, which helps companies make informed decisions. This data also supports strategic planning and performance optimization. 

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Reduced Errors Through Standardized Processes

CLM software promotes consistency by using pre-approved templates and workflows. This minimizes errors and ensures that all contracts follow the same format and process. 

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Optimized Contract Terms and Cost Savings

By providing access to historical data, CLM enables better negotiation. It also allows better optimization of contract terms and identification of cost-saving opportunities. 

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Improved Collaboration with Contracting Parties

Collaborative tools streamline negotiations and improve communication between parties, making it easier to resolve issues quickly and build stronger relationships. 

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Data-Backed Insights for Strategic Planning

Comprehensive reporting capabilities help organizations to identify trends, measure performance, and align contract strategies with broader business goals.

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How Does Contract Lifecycle Management Software Work?

Contract Lifecycle Management (CLM) software transforms how businesses handle contracts by automating tasks, streamlining contract approvals and reducing risks significantly. This software simplifies each stage, from drafting to storage, enabling efficient and secure contract management.

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Here’s how CLM software works to streamline the entire contract lifecycle: 

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Automating Contract Drafting

CLM software provides customizable templates and pre-approved clauses, enabling rapid contract drafting and minimizing the risk of inconsistencies.

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Auto-Integrating Pricing and Configurations 

By incorporating Configure, Price, Quote (CPQ) tools, CLM software automatically adds pricing details, ensuring accuracy and consistency in every contract.

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Automated Approval Routing 

Approval workflows automate the routing of contracts, ensuring that all necessary stakeholders review and approve each document without delays.

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Digital Signatures 

Integrated digital signature capabilities eliminate the need for physical paperwork, allowing contracts to be signed and finalized quickly and securely.

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Real-Time Monitoring and Alerts

CLM software monitors contracts throughout their lifecycle, providing alerts for important dates like renewals and compliance deadlines.

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Data Analysis with Reporting 

Comprehensive analytics tools help track contract performance, enabling businesses to make data-driven decisions and improve contract strategies.

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Centralized Digital Repository

A centralized repository ensures that all contracts are securely stored, easily accessible, and searchable for future reference.

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The 7 Stages of Contract Lifecycle Management

Contract Lifecycle Management (CLM) follows a clear process that guides every agreement from creation to renewal. Understanding each stage helps businesses manage contracts more efficiently, reduce risks, and stay compliant. These 7 stages of CLM are essential for companies looking to modernize their contract lifecycle stages in 2025.

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Stage 1: Contract Request and Creation

This is the pre-signature CLM phase where a new contract request begins. Teams identify the need for a contract, whether it’s for a new vendor, renewal, or customer agreement.

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CLM software simplifies this step by offering pre-approved templates and clause libraries. Users can quickly create accurate contracts without starting from scratch, reducing errors and saving time.

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Stage 2: Contract Negotiation

Once the draft is ready, negotiation begins between all involved parties. This stage focuses on reviewing terms, pricing, and responsibilities.

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Modern CLM platforms make this process collaborative by allowing real-time edits, comments, and version tracking. This ensures both sides work on the latest document, minimizing confusion and speeding up finalization.

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Stage 3: Contract Review and Approval

Before a contract is signed, it goes through an internal review and approval process. Legal, finance, and compliance teams verify that terms align with company policies and legal requirements.

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Automated workflows route the contract to the right stakeholders for sign-off, eliminating long email chains and manual follow-ups. This keeps the process transparent and consistent.

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Stage 4: Contract Execution

This is when the contract becomes official. Through secure digital signature integrations, all parties can sign documents from anywhere, removing delays caused by physical paperwork.

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Once executed, the contract instantly moves to post-signature contract management within the CLM system, ensuring all data is recorded and accessible.

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Stage 5: Contract Storage and Organization

After execution, every contract must be securely stored and easy to retrieve. CLM software creates a centralized digital repository where contracts are indexed, searchable, and version-controlled.

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This not only reduces the risk of lost documents but also helps teams quickly find key information, such as renewal dates, obligations, or vendor details, whenever needed.

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Stage 6: Contract Performance and Compliance

Once contracts are active, ongoing monitoring becomes critical. This stage focuses on contract performance tracking, ensuring all parties meet agreed terms, timelines, and deliverables.

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Automated alerts can flag missed obligations, compliance issues, or approaching deadlines. Reporting tools provide visibility into performance metrics, helping teams stay proactive and avoid risks.

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Stage 7: Contract Renewal or Expiry

The final stage ensures no opportunity or risk is missed. As contracts near expiry, CLM tools send reminders for renewals or terminations.

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This gives businesses time to reassess performance, negotiate better terms, or discontinue underperforming agreements. Automated renewal workflows make it easy to roll forward successful contracts while maintaining full control.

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How to Implement Contract Lifecycle Management

Implementing Contract Lifecycle Management (CLM) optimizes contract processes, reduces risks, and enhances compliance. A strategic approach ensures CLM adoption is smooth and effective. By identifying challenges, setting goals, and standardizing workflows, companies can maximize the benefits of CLM.

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Here are the key steps to implementing a successful CLM system: 

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Step 1. Assess Current Contract Management Challenges

Identify areas where your current contract processes fall short. Understanding specific challenges helps tailor the CLM solution to address inefficiencies and reduce risks. 

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Step 2. Engage Stakeholders and Set Clear Goals

Involve key departments, like sales and legal, to align on objectives. Define goals such as reducing contract cycle times or improving compliance to ensure the CLM process meets organizational needs. 

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Step 3. Select a CLM Solution Aligned with Your Needs

Choose a CLM tool that fits your requirements and integrates with existing systems. Make sure that it offers flexibility for future scaling as your business evolves. 

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Step 4. Develop Standardized Processes and Guidelines

Establish consistent processes that align with organizational goals. Standardization ensures smooth onboarding and uniform compliance across all users of the CLM software. 

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Step 5. Train Teams for Effective Adoption

Provide comprehensive training to ensure all users are comfortable with the new system. Ongoing support and resources enhance user engagement and encourage adoption. 

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Step 6. Continuously Monitor and Optimize the System

Regularly assess the performance of your CLM solution and make necessary adjustments. As your business grows, refine processes to keep the system aligned with evolving needs. 

Top Contract Lifecycle Management Software in 2025

The CLM market is growing fast, and businesses are prioritizing tools that combine automation, visibility, and compliance. The best contract lifecycle management software in 2025 helps teams handle every stage, from drafting to renewal, without the bottlenecks of manual processes.

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Here’s a look at the leading CLM platforms this year, with their pros, cons, G2 ratings, and ideal use cases.

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1. Spendflo

Spendflo is an AI-native platform built for finance, procurement, and IT teams. It manages everything from intake to procurement and renewals in one place, providing complete spend visibility and guaranteed savings.

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Pros:

• Centralizes contracts, vendors, and spend data in one dashboard
• AI-driven procurement workflows with built-in negotiation support
• Fast implementation and white-glove onboarding
• Guarantees up to 30% cost savings on vendor and SaaS spend
  

Cons:

• Best suited for mid-market to enterprise organizations (may be too advanced for very small teams)

Use Cases:

• Companies looking to combine CLM with SaaS spend management
• Finance teams needing real-time visibility into contract and vendor spend
• Procurement teams wanting automation plus expert negotiation support

G2 Rating: ★★★★★ (4.8/5)

2. Ironclad

Ironclad is popular for its simple interface and robust automation. It’s ideal for legal and business teams that need structured workflows and version control during contract creation and review.

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Pros:

• Intuitive UI with strong collaboration tools
• Real-time editing and redlining features
• Great analytics dashboard for tracking contract performance

Cons:

• Pricing can be high for smaller organizations
• Limited post-signature performance tracking

Use Cases:

• Legal teams needing faster review cycles
• Companies focusing on pre-signature CLM workflows

G2 Rating: ★★★★☆ (4.6/5)

3. Icertis

Icertis is a trusted enterprise-grade solution known for scalability and compliance. It integrates well with ERP and CRM tools like SAP and Salesforce.

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Pros:

• Excellent compliance and risk management tools
• Deep integration capabilities
• Customizable workflows for global enterprises

Cons:

• Steeper learning curve for new users
• Setup and maintenance can be time-consuming

Use Cases:

• Large enterprises with complex contract structures
• Regulated industries like manufacturing, finance, or healthcare

G2 Rating: ★★★★☆ (4.4/5)

4. DocuSign CLM

DocuSign CLM builds on its eSignature capabilities to deliver full contract management. It’s known for simplicity and end-to-end document visibility.

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Pros:

• Seamless digital signature integration
• Easy-to-use interface for approvals and renewals
• Trusted brand with strong security

Cons:

• Limited customization options compared to enterprise tools
• Reporting features could be more detailed

Use Cases:

• Teams already using DocuSign for signatures
• Small to mid-sized businesses seeking quick setup and reliability

G2 Rating: ★★★★☆ (4.3/5)

5. Conga CLM

Conga CLM offers flexible contract creation and negotiation tools, especially useful for sales-driven organizations. It integrates tightly with Salesforce, making it a strong fit for revenue operations.

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Pros:

• Smooth Salesforce integration
• Automated approval and renewal workflows
• Good for sales and procurement alignment

Cons:

• Best for Salesforce users, limited standalone flexibility
• UI can feel dated compared to newer tools

Use Cases:

• Sales teams managing recurring customer contracts
• Businesses that rely heavily on Salesforce for deal management

G2 Rating: ★★★★☆ (4.2/5)

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Key Features of Contract Lifecycle Management Software

Contract Lifecycle Management (CLM) software improves efficiency by automating tasks from drafting to storage. With CRM integration, digital signatures, and real-time collaboration, CLM simplifies compliance and reduces manual work. Features like analytics and centralized storage further streamline the entire contract process.

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Here are the essential features of effective CLM software:

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Seamless Integration with CRM and Business Tools

With CRM and business tool integrations, CLM software consolidates customer and contract data, improving workflow and making it easier to track contract statuses and renewals. 

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Comprehensive Library of Contract Templates

By providing a template library of pre-approved language and structure for different contract types, CLM speeds up the drafting process and ensures consistency and reduces errors. 

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Digital Signature Support for Faster Approvals

Digital signatures allow contracts to be signed and approved electronically, eliminating delays associated with physical paperwork. This speeds up the approval process. 

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Real-Time Contract Collaboration and Negotiation Tools

Collaboration tools enable real-time editing and negotiation, allowing multiple stakeholders to work together and track changes. This helps finalize contracts faster. 

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Automated Alerts for Key Dates and Obligations

Automated alerts notify teams about important dates like renewals and obligations. This ensures compliance and also makes sure that nothing gets overlooked in the contract lifecycle. 

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Centralized and Secure Contract Repository

A centralized repository provides secure, organized storage for all contracts. This makes it easy to access, search, and manage documents from a single platform.  

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Advanced Analytics and Customizable Reporting Options

With built-in analytics, CLM software provides insights into contract performance. This helps teams to make data-driven decisions and optimize contract processes. 

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Automated Workflows for Process Efficiency

Automated workflows streamline contract processes and improve overall process efficiency. The system guides users through stages like drafting, approvals, and renewals with minimal manual interventions.

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AI-Powered Contract Lifecycle Management Intelligence

Artificial Intelligence is changing how companies manage contracts. Instead of manually reviewing pages of legal text, AI can now identify key obligations, risks, and financial terms in seconds, giving teams faster insights and better control.

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Here’s how AI-powered CLM brings intelligence to every stage of contract management:

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1. Identifying Obligations and Key Clauses: AI automatically scans contracts to extract critical obligations, deadlines, and deliverables. This ensures teams never miss key actions like payment milestones, renewal dates, or compliance requirements.

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2. Detecting Risks Early: AI tools flag unusual terms, missing clauses, or redline inconsistencies that could expose your organization to financial or legal risk. This helps legal and procurement teams take corrective action before contracts are signed.

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3. Analyzing Financial Terms: From pricing structures to discount clauses, AI highlights the financial terms that impact revenue and spend. This visibility helps finance teams verify accuracy and identify potential cost savings opportunities.

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4. Automating Compliance Checks: AI ensures that every new contract aligns with internal policies and legal frameworks. It cross-references approved templates and historical data to maintain consistency and reduce compliance errors.

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5. Continuous Learning for Smarter Decisions: As more contracts are processed, the system learns from past patterns, improving accuracy in detecting risks, tracking obligations, and predicting renewal outcomes.

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Conclusion

Many growing companies still manage contracts through scattered files, endless emails, and manual approvals, a process that often leads to missed renewals, compliance issues, and costly errors.

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Take the example of a mid-market SaaS firm that partnered with Spendflo to overhaul its contract management. Within 60 days, they centralized over 80% of their contracts, automated approval workflows, and reduced renewal delays by 40%. The result? Faster deal cycles, stronger compliance, and measurable savings.

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If your team is still spending hours tracking obligations and chasing approvals, now’s the time to rethink your approach.

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Spendflo’s AI-powered CLM brings visibility, automation, and guaranteed savings, all in one platform built for finance, procurement, and IT teams. You get faster approvals, accurate renewals, and complete control over contract performance without the manual stress.

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Ready to simplify contract management? Book a demo and see how Spendflo can help your business gain visibility, save time, and stay compliant.

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Frequently Asked Questions on Contract Lifecycle Management

What is Contract Lifecycle Management (CLM)?

Contract Lifecycle Management (CLM) is a process to manage contracts from creation to renewal or expiration. It ensures compliance, optimizes processes, and reduces risks across all contract stages.

Why is CLM important for businesses?

CLM is essential for businesses because it streamlines contract processes, minimizes errors, and ensures compliance. It helps in managing risks and improving efficiency, which directly impacts revenue and growth.

How does CLM software improve contract management?

CLM software automates contract processes, providing tools for drafting, approval, and tracking. It reduces manual tasks, speeds up workflows, and enhances visibility. All this ensures more efficient contract management. 

What are the key features of CLM software?

Key features of CLM software include automated workflows, digital signatures, CRM integration, and advanced analytics. These features support efficient contract drafting, compliance, performance tracking, and renewal management. 

Can CLM software integrate with existing business tools?

Yes, most CLM software integrates with tools like CRM, ERP, and financial systems. This integration streamlines data flow, reduces redundancy, and ensures comprehensive visibility across contract processes.

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