Articles

CLM Vs Workflow Automation: What’s Best for Your Business?

By Tom Odlin, published: 2023-12-14

A man at a desk surrounded by robotic equipment, simulating automation.

Businesses are often caught at a crossroads when choosing between Contract Lifecycle Management (CLM) and workflow automation.

Both technologies offer significant advantages, but understanding which is best suited for your business is crucial for efficient operations and cost-effectiveness. 

Understanding CLM and workflow automation

Contract Lifecycle Management (CLM) is a comprehensive tool designed to manage the entire lifecycle of a contract. It involves tracking, drafting, executing, and analysing contracts to enhance operational and financial performance.

CLM is particularly beneficial for businesses that focus heavily on legal contracts, offering insights into contract intelligence and improving negotiation efficiency.

Workflow Automation is a broader technology that streamlines and automates various business processes. It is not limited to contracts but includes multiple functionalities like vendor onboarding, incident reporting, and employment-related inquiries.

Workflow automation is ideal for businesses seeking to improve process efficiency and reduce the workload on staff.

Choosing the right tool for your business

Choosing between Contract Lifecycle Management (CLM) and workflow automation can significantly impact operational efficiency and success. 

When to choose CLM:

  1. Contract-Centric Needs: If your business manages many complex contracts, CLM provides specialised tools for negotiations, tracking obligations, and analysing contract data.
  2. Desire for Contract Intelligence: CLM excels in offering insights into contracts, like deviations from standard language and financial implications.
  3. Advanced Contract Management Requirements: Businesses needing sophisticated contract management, including searchability and tracking of signed contracts, will benefit more from CLM.
ProsCons
Specialised in managing complex contractsCan be resource-intensive in implementation
Provides insights and intelligence on contractsMay require significant training for users
Enhances efficiency in contract negotiationsPrimarily focused on contracts, less versatile
Tracks obligations and financial implicationsPotentially higher costs for software and maintenance
Improves contract searchability and management

When to opt for workflow automation:

  1. Broader Process Improvement: If your goal is to enhance efficiency across various non-contractual processes, workflow automation is the way to go.
  2. Resource and Time Constraints: Workflow automation tools are typically easier to implement and require less training, making them suitable for businesses with limited resources.
  3. Handling High-Volume, Low-Complexity Work: Workflow automation offers a more streamlined approach for businesses that manage simple, high-volume tasks like NDAs.
ProsCons
Broad application across various processesLess specialised in contract management
Easier and quicker to implementMay not offer in-depth contract insights
Requires minimal trainingCould lack advanced features for complex contract handling
Ideal for high-volume, low-complexity tasksNot as tailored for contract-centric organizations
Improves overall process efficiency

Choosing Zegal for the best of both worlds

Opting for Zegal offers a unique advantage, effectively bridging the gap between CLM and workflow automation. Zegal provides CLM’s specialised capabilities while offering workflow automation flexibility and efficiency. 

The complementary nature of CLM and workflow automation

It’s important to note that CLM and workflow automation are not mutually exclusive and can be complementary. Many businesses start with workflow automation to get a handle on their primary processes and then gradually integrate CLM as their needs become more contract-intensive.

Key considerations before deciding

  1. Evaluate Your Business Needs: Assess the nature of your workflows. Are they contract-heavy, or do they span a broader range of activities?
  2. Consider the Maturity of Your Processes: Workflow automation might be a better initial investment if you start from scratch with minimal contracting rules.
  3. Budget and Resources: Implementing CLM can be resource-intensive. Ensure you have the budget and personnel for a successful deployment.

Conclusion

The decision between CLM and workflow automation hinges on your business’s needs. While CLM offers in-depth contract management capabilities, workflow automation provides a broader spectrum of process improvements.

You can choose the right tool to drive efficiency and growth by carefully assessing your business requirements. Remember, in legal tech, one size does not fit all – it’s about finding the perfect fit for your unique business needs.

Tags: business | legal | legal tech

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