Calculate CLM ROI: A Step-by-Step Guide

As a general counsel, you're likely no stranger to the importance of contract lifecycle management (CLM). But have you ever stopped to think about the return on investment (ROI) of your CLM solution? In this article, we'll walk you through a step-by-step guide on how to calculate the ROI of your CLM system.

Calculating the ROI of your CLM solution is crucial for justifying its cost and demonstrating its value to your organization. By understanding the financial benefits of your CLM system, you can make informed decisions about its continued use and potential upgrades.

In this article, we'll cover the following topics:

• What is CLM ROI?
• Why is calculating CLM ROI important?
• How to calculate CLM ROI: a step-by-step guide
• Common challenges and pitfalls to avoid when calculating CLM ROI
• Best practices for calculating CLM ROI

By the end of this article, you'll have a clear understanding of how to calculate the ROI of your CLM system and be able to make data-driven decisions about its continued use.

What is CLM ROI?

CLM ROI is the return on investment of your contract lifecycle management system. It's a measure of the financial benefits you receive from using your CLM system, such as reduced costs, increased efficiency, and improved compliance.

Why is calculating CLM ROI important?

Calculating CLM ROI is important because it helps you:

• Justify the cost of your CLM system to your organization
• Demonstrate the value of your CLM system to stakeholders
• Make informed decisions about its continued use and potential upgrades
• Identify areas for improvement and optimization

How to calculate CLM ROI: a step-by-step guide

To calculate CLM ROI, follow these steps:

1. Identify the costs associated with your CLM system, such as software licenses, implementation, and maintenance.
2. Calculate the benefits of your CLM system, such as reduced costs, increased efficiency, and improved compliance.
3. Calculate the ROI of your CLM system by dividing the benefits by the costs and multiplying by 100.
4. Use a CLM ROI calculator or spreadsheet to help you with the calculation.

Common challenges and pitfalls to avoid when calculating CLM ROI

When calculating CLM ROI, be sure to avoid the following common challenges and pitfalls:

• Failing to identify all costs associated with your CLM system
• Failing to accurately calculate the benefits of your CLM system
• Using outdated or inaccurate data
• Failing to consider the potential risks and challenges of your CLM system

Best practices for calculating CLM ROI

To ensure an accurate calculation of CLM ROI, follow these best practices:

• Use a CLM ROI calculator or spreadsheet to help with the calculation
• Identify and include all costs associated with your CLM system
• Accurately calculate the benefits of your CLM system
• Use up-to-date and accurate data
• Consider the potential risks and challenges of your CLM system

By following these best practices and avoiding common challenges and pitfalls, you can ensure an accurate calculation of CLM ROI and make informed decisions about your CLM system.