C/4 Sales Cloud: Common Business Scenario for Contract Lifecycle Management (CLM)

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Hi all,

with this blog post I would like to cover the business scenario of choosing CLM which is recently acquired by SAP as Callidus Product and comes as Add-on to existing SAP C/4 Sales system.

This blog post is trying to present insight while you are trying to address a workshop/pres-sales meet with Client or You are trying to explain the features of CLM as CLM Administrator.

What is SAP CLM i.e Contract Lifecycle Management?

     Contract Lifecycle Management is a comprehensive solution that automates the various steps involved in managing a contract, End to End leading it from Contract creation to conclusion. CLM offers many robust features to increase collaboration and accelerate deal cycles.

Features* of CLM:

• Highly configurable workflows focused on business process need at every business level, integrated at the contract template level, enable you to seamlessly enforce approval processes.


• Redlining and negotiations are performed in a collaborative work-space online, providing greater visibility to make informed decisions. Redlining is an special feature which clearly log the changes done in Contract document with user info to track changes


• Pre-configured and business approved contract templates, clauses, supplements, and email templates reduce manual drafting and increase efficiency.


• A centralized, searchable, version-controlled repository allows you to quickly access the information you need.


• Automated alerts and notifications help you stay informed about important contract management activities and milestones.


• Ability to monitor, collate, and restrict access to confidential content provides granular control over all contract management functions.


• Integration with DocuSign ® and AdobeSign for e-signatures makes contract management completely online.


• Integration with Microsoft Word ® enables offline editing in a very simple user-friendly manner.(*Excerpts taken from SAP Training material)

Common Business Problems/ooprtunities which can be catered by CLM:

For this blog post, let’s consider a Company XYZ Ltd. who deals in selling File Storage Spaces as well as selling Business conference Audio-Video solutions (Similar to Amazon/Cisco etc). I will take a quick reference of this company to explain the business problem.

Before documenting the individual issues, which can be addressed by CLM, let me walk you through the nature of business which can be considered as very apt for CLM Implementation.

• B2B Selling with High Value Contracts: Mostly the volume of contracts are lesser in B2B compared to B2C and in first case the individual value of Contract is higher. The Contract management when handling B2B is more important as Your Company wants to address it in personalized manner


• Repetitive and Long-term Contracts: There is a need of sperate Contract Management tool like CLM, if most of the time, Your Company get Contracts renewed considering long term agreement and based on the relationship that You have. In such cases, at every term completion, more of less the same contract get updated with updated rates/prices and get signed after moving through agreed Organizational hierarchy/decision makers.


• Complex business process of Approval before signing: If you are dealing with a situation where the Contract Document need to get lot of Approvals not only from designated person/supervisors but from multiple department within Organization (like Legal/Finance/Supply/Inventory etc), You will need an Automated tool which required almost no manual effort to process the Contract asap. CLM offers the above solution as standard within box to manage the business process and flow


• Documentation and Editing of Contract: Consider a scenario where the Contract document has a very strict format and everything including Fonts/Logo/Branding/Signatures must be in place and must be pre-approved from Legal department for e.g; then it is very tough to keep the whole business documentation aligned as there are lot of manual intervention. Also in case if you get any review/adjustment either by Customer you are contracting with or internal department/Regulatory Authority (Like IRDA/SEBI in case of India); It is very tough to edit the contract and keep a log of changes which need to be approved. CLM by default have features to meet this.

Now, let’s address the Business problems as reference and understand how CLM offers the solution fo that:

1. Managing Contracts Life Cycle:

Especially in B2B Selling, Organizations are overloaded with Contracts which require lot of efforts to track. Consider a scenario where the same contact gets renewed every year and Company do not want to miss that renewal relying on manual efforts required to track the expiry date and then assigning Sales Agent to connect with Customer. Also, Organization wants to reduce the time to create the Contract, get Internal approval within Organization before sent to Customer. As this required lot of approvals/tracking etc, getting and Automated offering will be always good.

So, for our taken example, Company XYZ Ltd. wants to send a reminder as well as task to Sales Agent Mr. X to go through the existing Contract of ABC ltd. And schedule as meeting with ABC Ltd. Contact person to ensure new Contract get renewed before “Contract End date”. Also the Contract has to be mandatory approved by Legal Dept. before sharing it to Customer ABC Ltd. Legal Dept. needs mandatory 3 working days to review and approve it. This required the first action to be triggered at-least 30 Days before Contract End Date. The IT system must be designed to support this process.

                 CLM offer the feature of highly configurable workflows which are activated along with Status management of each Contract. By using this not only every phase of Contract (Drafted/Sent for Approval/ Signed by Legal/Signed by Customer etc) will be managed but pre-configured workflow will ensure the proper notification to approving/action required team/person. Automated alerts and notifications help you stay informed about important contract management activities and milestones which ensure any pro-active actions required to meet the deadlines or avoid lost business.

2. Managing Multiple Contract Types across the Organization:

Often Organizations deals in multiple contract types depending on Products/Services being offered. And it is very tough to manage the Contract content which has be internally approved and constant across the multiple business units. Management want to ensure that every Business Unit must use the pre-approved template only and any changes must be approved along with documented log in case of changes requested by Customer. But due to high volume as well as attempt to meet the target by Sales Agents; it is often a cumbersome task for management to maintain the constant practice across the business.

Referring to XYZ Ltd as example, XYZ has different template for Storage Services as well as Conferencing products.  Both Contract has different Clauses/Terms and Conditions/Data privacy statements etc. IT system must also support that Mr X who is Sales Agent for Storage Services and Mr. Y who is Sales agent for Conferencing Services; get template in the system configured with their products as well as Contract data which they are supposed to see. They must use the existing template to quickly create a follow-up Contract and proceed.

                 CLM has feature to work and manage pre-approved Contract Type and Template  which can be drafted by Management and can be restricted as per User/Department level using Permission group. The designated user will be only able to access the template he is suppose to work on as well as any changes/approval will be logged in the system for Management. Template will use the Customer info and required data changes (like Dates/Customer Info etc) and Sales Agent can quickly share the contract which is personally addressed to Customer. Monitoring the access/changes/users/template is standard functions provided in for CLM Administrator. Even as CLM user

 

3. Integration of Contracts documents with other systems:

This is a very common scenario where the Contract document must go through some e-sign systems which validates the required authority signature(s). So, consider a scenario where your contract creating system is not integrated with the system which is verifying the signatures, in this case there is extra manual efforts to upload the drafted Contract to signatory system to proceed. At the same time, Business wants to have an IT system which supports Customers to validate/upload their sign while accepting the Contract document.

With automated integration option with minimum efforts as is had pre-define integration settings (only signatory system link and credentials are needed), CLM is good choice. Integration with DocuSign ® and AdobeSign for e-signatures makes contract management completely online. Also the time required to complete the whole process is very minimum to ensure that the Contract process get finished as per required timelines. Also CLM can be simple integrated with SAP S/4, CPQ etc for having a common Customer/Employee/User data which is used in Contract Creation. It also provides Bulk Upload Functionality which can help you to quickly transfer/upload your existing old/archived Contract data.

 

4. Auditing/Reporting and Restoring Contracts:

The IT system must support the Audit function either by Internal management or External Agency as general practice or part of error troubleshooting considering Contract as Legal document.

This required not only step by step change logs but also the actions/user/customer consent info related to each change. Considering the huge volume, it is very tough to track each Contract. Also, Business often comes across a situation where the old/achieved Contract has to be restored which was deleted by mistake from Customer or Sales Agent

Audit Functionality and Restoring Option in CLM provides a best choice which required almost no efforts as system automatically log each change. The Reporting functionality give you very customized Reports which can help to keep track of deadlines as well as monitoring.

 

Conclusion: With fast paced changes in Customer needs which need personal attention considering the long-term relationship; current Business need an automated IT system which helps sales team by reducing the manual efforts while maintaining all required pre-requisites.

CLM comes with all required features as standard functionality, which caters the above need by automating the Contract Management. With CLM as power tool, Sales team get more time to concentrate on Customer Selling with a competitive advantage. Its integration with existing SAP/Non-SAP database/systems ensure the smooth and reliable transition which help Organizations to quickly transform its revenue generating process.

Many Thanks, please share your comment, feedback, suggestion.

Regards,

Mukesh Kumar