According to a recent analyst report, the percentage of an enterprise’s revenue governed by contracts is steadily rising and is expected to reach 68 percent by the end of 2008. At the same time, contracts are becoming increasingly complex, as both buyers and sellers dictate terms and conditions that enable each to achieve greater value from their business relationships.

To address this combined issue of growing volumes of increasingly complex contracts, companies need to find effective ways of authoring, managing, storing, retrieving, and analyzing information contained in contracts. The process of achieving these objectives is called contract lifecycle management (CLM), a process that governs the management of a corporate agreement from its inception to its expiration or renewal.

Companies may initially choose to build their own CLM systems by adapting other software tools such as Microsoft Word, Excel, or Access. This approach may be adequate if contract volumes are small, the contracts themselves are straightforward, and there is little need for complex analysis of contract contents. In other words, a homegrown solution is not likely to be appropriate for anything more than the most basic departmental-level contract management needs. As contract complexity increases and as involvement starts to extend across the enterprise, a more robust process will undoubtedly be needed to obtain a much wider range of functionality.