5 reasons why CEOs need to invest in contract management software 

Maintaining and driving business growth is a top priority for any executive. As a CEO, you’re always looking for ways to drive that growth, streamline operations, and reduce costs within your organization. One often overlooked tool that can help achieve these goals is Contract Lifecycle Management (CLM) software.  

While managing contracts is only one piece of the puzzle for a successful business, integrating new technology is critical across your enterprise. Even though you may not have the time to oversee every contract personally, staying informed about your company’s revenue health is crucial. Robust CLM solutions like Agiloft provide you with instant insights into critical aspects of your business.  

By fully leveraging contract management software, you can gain a comprehensive understanding of your business, make informed decisions, and avoid being blindsided by unnecessary expenses when a contract is renewed.  

Here are five reasons why investing in contract management software is a smart move for CEOs of organizations big and small, public and private, and everything in between. 

1. Increased revenue and cost savings 

Effective contract management software can make a significant impact on your bottom line. 

According to research by World Commerce & Contracting, good contract management can save a company up to 9% of its annual revenue. What’s more, analysts at PricewaterhouseCoopers estimate that organizations can save up to 2% of their annual costs by using contract management software. 

Just take King County, Washington. With a population of two million (the 14^th largest county in the United States), King County reduced its operating costs by automating and optimizing their contract processes with Agiloft CLM.  

But King County isn’t alone in experiencing significant Return on Investment (ROI) on a CLM platform. Leading analyst firm MGI Research recently conducted a comprehensive assessment of Agiloft’s ROI by interviewing companies that have implemented the software to gather key investment and outcome metrics. The findings reveal that Agiloft’s CLM can generate substantial ROI, generally exceeding 100%.    

2. No more missed obligations

We’ve all been there: an email appears in your inbox thanking you for renewing a contract you’d completely forgotten about. 

While this can be frustrating at home (hello, streaming service you were only going to use for a two-week international soccer championship!), it can be deeply problematic – and costly – in a professional environment.  

Missed contract obligations can lead to unwanted renewals and costly mistakes. For instance, Bissell once made a $60,000 mistake due to an unwanted auto-renewal. This oversight could have been avoided with the automated reminders provided by contract management software.

3. Expedited deals and shorter sales cycles

How many times has Sales secured a deal, only for it to fall through due to delays in the approval process? Without automated approval workflows, contracts can become unnecessarily delayed, increasing the risk of losing deals. Flexible contract management software can eliminate human errors by automatically routing, pushing, and escalating contract approvals as needed. 

For example, Health Catalyst, a leading health data provider, accelerated its sales and legal processes with automated CLM, resulting in faster deal closures. By streamlining contract approvals, you can ensure that deals are finalized quickly and efficiently, giving your sales team more time to focus on closing new business. 

4. Opportunities for business growth

In 2025, doing more with less is crucial. According to the Harbor’s 2023 Law Department survey, more than 80% of companies expect legal demand to increase – and CLM software plays a critical role in meeting these demands.  

AI-enhanced contract management software can act as a “force multiplier,” freeing up time for more strategic work and allowing your team to focus on high-value tasks. For example, reviewing standard contracts might not be the best use of senior counsel’s time. Standard, run-of-the-mill contracts can be routed straight to signature. 

Keeping up with the competition is also essential in a world where the most responsive player often wins. We need emails and instant messages answered promptly, tasks done efficiently, and quick access to all necessary data.  

Many legal departments use digital repositories like SharePoint or shared drives to store their contracts, but these are often siloed, don’t work well, or can’t grow with the business. If it takes days to gather scattered contracts, your organization risks missing crucial insights into third-party responsibilities. A modern, flexible CLM platform helps you avoid costly mistakes and provides real-time visibility for better decision-making and negotiating. 

5. Risk management

We’re all aware that we are living in a unique period of history, where so-called “black swan events” have become the norm. From the global pandemic to the supply chain crisis to the invasion of Ukraine, we’ve seen black swans flying left and right for years. 

So how can companies survive with the constant disruption, much less thrive in this era? According to Dawn Tiura, CEO and President of Sourcing Industry Group (SIG), the best way to prepare for uncertainty is by mitigating risk. 

One significant risk is missed contract expirations, which can lead to significant consequences, including potential lawsuits and loss of revenue.  

For example, if a company uses intellectual property beyond the predefined duration, it could face litigation. On the other hand, a missed expiration date could result in lost revenue for the licensor. A quality contract management software system alerts staff of upcoming expirations and renewals, helping to mitigate these risks. 

Conclusion

Investing in CLM software is a strategic move for any CEO looking to drive growth, reduce costs, and manage risks effectively. By leveraging the power of CLM, you can gain instant insights into key aspects of your business, streamline operations, and ensure that you never miss a critical contract deadline again. With the right CLM platform, you can unlock hidden revenue streams, expedite deals, and stay ahead of the competition.  

So, why wait? Start exploring the benefits of contract management software today and position your company for sustained success in 2025 and beyond. 🚀