What Influences the Cost of Contract Lifecycle Management Software

What Influences the Cost of Contract Lifecycle Management Software

Choosing contract lifecycle management (CLM) software is not an easy task. With so many providers on the market offering different products with varying prices and features, it can feel overwhelming to commit to one. Before choosing a CLM solution for your business, you must consider your budget and what the software offers, so you don't pay too much.

Why consider the price of contract lifecycle management (CLM) software?

Contract lifecycle management (CLM) software pricing varies from platform to platform depending on what the software offers its users. Since contract management solutions should save your business money by streamlining the contracting process, it's important to ensure that you are not paying too much for the solution. Investing too much can offset its money-saving benefits, meaning that your business should take time to consider your needs and determine a budget.

Key factors that determine the price of contract lifecycle management software

Various factors influence the cost of contract management software, most of which are related to your company's size. Smaller businesses typically require fewer data storage, fewer user licenses, and a limited feature set, resulting in a lower price. However, large organizations will typically have to spend substantially more on larger and more complicated systems, which frequently include various integrations.

Some factors that influence the cost of contract management software include:

The number of users

Another reason why large firms can expect to pay more for contract management software than smaller businesses is that certain pricing plans are based on the number of users. The monthly pricing point of certain software may be determined by the number of user licenses that a company requires. To determine a rough estimate of how much your company will spend, consider all the people who work on your contract lifecycle, including management, legal, finance, sales, and procurement.

Storage size

Since contract management software gives businesses a centralized repository for document storage, an accurate way to predict the platform's cost is to determine how much storage space your company needs. Before committing to a CLM provider, you need to know the number of contracts your firm typically handles. Also, think about your company's goals in terms of growth and how much your agreements may increase in the following five years. Fortunately, many manufacturers will let clients start at a lower price point and then upgrade to more storage space as needed.

Third-party integrations

Contract management lifecycles frequently impact other operational procedures, and some software companies charge for integrations with third-party solutions. This means that when evaluating prices, you should account for the other tools you'll need to connect to your contract lifecycle management software. Salesforce (or other CRM) or E-Signature systems like DocuSign are two common tools businesses will need to integrate with their contract management software. Although more integrations may cause increased costs, some software companies provide free integrations with third-party solutions.

Software security

When it comes to document storage, certain companies must comply with strict regulations, while others simply want to ensure that contracts are protected from unwanted access. In any case, the safety and security of your sensitive documents are vital, and the level of security you select will significantly impact the platform's price.

While some platforms on the market provide little protection, others have regular safety and security audits to ensure they safeguard your documents with innovative technology. Multi-factor authentication, user permissions, and IP safe listing are beneficial safety features, but they come at a price. However, paying more for a secure platform may save you a lot of money in the long run.

The number of features

Each business has different operational needs, and not every contract system has the features that a company requires. What feature set is best for your business will be determined by the complexity and number of contracts your business handles. Platforms that offer more features are typically more expensive than base-level software systems. However, your business may require these tools to maximize its efficiency.

Some of these features include:

  • Red-lining
  • Smart templates
  • Workflow automation
  • Advanced analytics

Customer support

Most platforms charge more for premium customer support services. These include 24-hour assistance, assured response times, and accessibility (phone, messaging, or email). Some companies charge an annual support price or bill teams directly for support services regularly. Therefore, it may be more cost-effective to opt for an easy-to-use platform or a company that provides free customer assistance.

What are the additional fees associated with contract management software?

Software vendors sometimes charge various fees for using their platform. These are typically one-time or regular payments that cover a variety of services related to the implementation and maintenance of the system. Because not all providers charge these fees, it's usually best to select a solution that keeps additional costs to a minimum.

Typical fees associated with contract management software include:

  • License fees
  • Implementation fees
  • Optional features
  • Integration fees
  • Customer support

The pitfalls of free CLM solutions

While some companies spend thousands of dollars on a contract management tool, plenty of free alternatives are available. Free software can be an excellent place to start. Especially, for a small business or a startup that doesn't have a lot of contracts. Free platforms might help businesses ease into contract management automation. However, keep in mind that most versions are constrained regarding capabilities and storage capacity. A free platform may sound appealing, but most of the time, these solutions do not suit the needs of firms with a complex contract lifecycle. For more accurate and up-to-date information on the contract lifecycle management software, contact the Parley Pro team.

Things to consider before investing in a CLM solution

Choosing a contract management platform is a decision that your company should carefully consider. Each business has different management needs, and thus different requirements. Many software providers offer various features, storage space, and security measures. Not only that, but contract lifecycle management software pricing varies from provider to provider. This means you also have to outline a budget, so you don't overpay.

If you want to implement the best contract lifecycle management software for your business, consider:

  • The size of your company
  • Your contract management needs
  • How much your willing to spend on a platform
  • Your current business solutions that you need to integrate
  • The contract management process that you currently use

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