Many legal departments have been embracing developing legal technology in various shapes and forms over the past few years. However, many companies have not quite grasped the value of how much these new tools can improve the way they do business. Today we’re going to focus on a feature found in the more advanced contract management systems — the ability to track contract data.
When a company begins to leverage contract tracking data, they gain the ability to make strategic business decisions based on real, structured information rather than instinct or memory. For a strategic framing of why contracts should be treated as data assets in the first place, see The Contract Is Not a Document. It Is a Strategic Asset.
What contract tracking data reveals
The data captured inside a well-managed contract portfolio can answer questions that were previously impossible to answer at speed: Which vendor relationships are up for renewal in the next 90 days? What is the total value of active customer contracts by region? Which agreement types are taking the longest to close? Are renewal rates improving or declining over time?
These are strategic questions. The ability to answer them quickly gives legal, finance, and leadership a material advantage in planning and decision-making. For a look at how good governance makes this data reliable and actionable, see Contract Governance: What Control in CLM Actually Means.
Common metrics to track
The most valuable contract metrics to track include: contract cycle time (from request to signature), self-serve rate (contracts closed without legal involvement), renewal hit rate, missed renewal rate, and time-in-stage (where contracts are spending the most time in the lifecycle). For a look at what these metrics look like in real CLM deployments, see CLM Savings Examples: Real-World Contract Metrics.
