Contract Lifecycle Management: What It Is, How It Works, and Why It Should Be Digitalized

In today’s data-driven world, Contract Lifecycle Management is no longer a purely administrative task. It has become a strategic process that directly impacts costs, risk exposure, and overall business performance. How does it work, and why is investing in a Contract Management Software worthwhile? Let’s explore some key insights below.

Contract Lifecycle Management (CLM), or simply Contract Management, is a structured process for managing and monitoring contracts throughout their entire lifecycle — from the initial draft to renewal or termination.

It covers both the pre-signature activities, such as drafting, negotiation, and approval, and post-signature activities, including execution, tracking of deadlines, performance monitoring, and contract risk management.

Essentially, this process is a workflow that connects people, activities, rules, and tools with the goal of ensuring that contractual rights and obligations are clearly defined, properly executed, and easy to manage.

A Contract Manager is the professional responsible for overseeing the contractual flow across all its stages.

Within an organization, this role acts as a bridge between legal, business, procurement, finance, and operations, ensuring that agreements are aligned with business goals and consistently applied over time.

Not every organization has a dedicated Contract Manager, which often depends on company size, industry, and the complexity of contracts handled. In large enterprises and highly structured environments, the Contract Manager is a key function. In small and medium-sized businesses, these responsibilities are often shared across legal, procurement, sales, or project management teams.

Across a typical contract management process, Contract Managers are responsible for:

• negotiating and defining terms and clauses
• managing contractual risks
• coordinating approval and signature workflows
• monitoring performance (KPIs, SLAs)
• managing amendments, renewals, and contract closures

The first phase of the CLM process focuses on defining business needs and contractual requirements, leading to the drafting of the agreement — often based on standardized templates.

This is when contract clauses are negotiated and legal, financial, and operational risks are assessed. A well-drafted contract ensures that all parties have a clear and shared understanding of their rights and obligations.

Using predefined templates helps streamline the creation of the contract, while reducing inconsistencies and errors.

Once negotiations are complete, the contract must be reviewed and approved — internally by legal teams or business managers, or externally by advisors or consultants, if and when required.

Before signing, it is essential that all parties fully understand the contract terms and that the agreement is legally binding.

Contracts can be signed using traditional or digital methods. Electronic signature solutions significantly simplify this step by enabling remote signing, eliminating the need for physical presence and reducing turnaround times.

A small change that can deliver a tangible impact on process efficiency.

Following the signature, the contract enters the execution phase, where its full value is realized. This phase includes fulfilling obligations, delivering services, tracking deadlines, and managing financial aspects such as payments, costs, and penalties.

Ongoing monitoring is essential to identify delays, upcoming renewals, or contractual changes. At the same time, proactive risk management helps prevent disputes and highlights opportunities for improvement.

Digital contract management tools make it possible to track contract status, receive automated reminders, and ensure compliance with contractual obligations, making contract execution more transparent, efficient, and secure.

Un’ultima fase, spesso sottovalutata, riguarda l’archiviazione e la conservazione dei contratti, che deve avvenire in modo sicuro e centralizzato, nel rispetto della normativa vigente.

In Italia, il Codice Civile e le leggi fiscali prevedono obblighi specifici di conservazione (art. 2220 c.c.; D.P.R. 600/1973 e D.P.R. 633/1972) dei contratti, che devono rimanere leggibili e facilmente reperibili per un periodo determinato di tempo (spesso dieci anni), al fine di eventuali controlli, verifiche legali o contenziosi.

Nel caso di contratti digitali, la conservazione digitale a norma, disciplinata dal CAD (D.Lgs. 82/2005) e dalle Linee guida AgID, richiede l’utilizzo di sistemi di archiviazione che garantiscano l’autenticità, l’integrità e la tracciabilità dei documenti informatici, tenendo traccia di firme, aggiornamenti ed eventuali revisioni.

In many organizations, contracts are still managed through manual and fragmented processes, with documents scattered across shared folders and e-mail inboxes, limited knowledge of deadlines, and difficulty retrieving information.

This approach increases the risk of errors and turns contracts into hard-to-manage assets. The lack of structured data also limits analysis and prevents informed decision-making.

Digitalization represents the natural evolution of traditional contract management, involving the adoption of software solutions designed to integrate seamlessly with existing business processes and IT systems.

Nowadays, organizations, including public entities, can rely on contract management software to support risk management, cost reduction, and dispute prevention.

Through document, approval, and archiving workflows, the entire contract lifecycle can be managed within a single platform. This enables standardization and automation of routine activities, reducing manual effort, inefficiencies, and planning errors.

An effective digital contract management solution should include:

• a secure, centralized contract repository
• document template management
• configurable workflows
• integration with ERP, CRM, and electronic signature services
• reporting tools and control dashboards

Increasingly, these platforms also incorporate artificial intelligence capabilities, enabling large-scale document analysis, version comparison, and identification of potential risks or opportunities.

ARXivar is a Business Process Automation suite designed to support the digitalization of contract management processes, enabling organizations to manage documents in a structured, secure, and efficient way.

ARXivar integrates digital archiving, electronic signatures, workflow automation, monitoring, and reporting dashboards, ensuring full control over every step of the contract lifecycle.

With ARXivar, organizations can:

• manage workflows and approval processes while maintaining full traceability of every action
• accelerate contract signing through integration with ARXivar Sign, the electronic signature service.
• organize and store contracts in a single, centralized repository that meets digital preservation standards. With ARXivar eArchiving, documents remain protected, accessible, and legally valid over time
• automate deadline tracking and reminders through alerts and notifications for renewals and contractual obligations

Furthermore, ARXivar’s AI-powered tools allow users to quickly search contracts within the document database and analyze their content, extracting valuable data to support decision-making.

In recent years, efficient contract management has become a critical competitive factor for growth, sustainability, and improved business performance.

Organizations have moved beyond viewing contracts as mere legal documents, recognizing their direct impact on financial and operational outcomes.

Adopting contract management software delivers concrete, measurable benefits, including:

• reduced legal and operational risk through systematic control of clauses, obligations, and deadlines;
• increased operational efficiency through process standardization and automation of repetitive tasks;
• greater transparency and control thanks to centralized, traceable access to up-to-date information;
• improved compliance and security aligned with internal policies and regulatory requirements;
• enhanced value extraction from contract data, turning agreements into actionable business insights.

In short, digitalizing contract management is not just about replacing paper with digital tools: it is about transforming contracts into strategic assets that drive smarter decisions and long-term competitive advantage.