Request

Usually, the one within the stakeholder who sends the request is the staff member with long experience, such as a finance manager or sales supervisor. Prior to the proposal submission, they already have meetings with their staff and arrive at an agreement. Let’s explore the topic more in the paragraphs below.

What is a request in contract lifecycle management (CLM)?

Request in contract lifecycle management means a party identifies a need for a new contract and then sends a formal letter to the legal team of the same firm. This is where the contract-making kicks off. There’s no exact timing when a stakeholder should initiate a contract. This aligns with the business progress itself.

In addition, the stakeholder details all aspects of the business's potential contract. This is the first and key component that explains why the agreement is necessary. The party elaborates on what it wants to achieve from the deal. Besides, it includes all necessary files to support its proposal for the business deal.

Here's an illustration. A firm seeks new external consultants as its business expands. To support the proposal, its HR team inserts the financial data of the company’s growth. It hopes the new consultants will provide regular advice with certain payment terms. All of these should be inside the file.

Why the request stage is important

The request phase plays a crucial role in the contract process. As hinted above, it contains full information about the deal itself. The details inside the proposal serve as the basis for drafting and negotiating with the targeted vendors. Besides, the facts create a strong basis for the entire contract lifecycle thanks to their accurate content.

Also, due to the precise information, all parties can minimise any potential ambiguities along the way. This makes the whole process more efficient. And this benefit will become greater when the stakeholders involved use contract lifecycle management software. This innovation helps to streamline all of the jobs, especially administrative ones.

Besides, the software collects and records all data safely. The parties can easily access the resources anytime they want to. They can observe the progress of the contract-making and then submit questions or another request using the software. When the contract is completed, they can examine the details before agreeing to sign it.

Key steps in submitting a contract request

As hinted above, delivering a contract request requires four steps. These include identification of a business need, data collection, formal submission, contract goals and motivations, and process initiation. The length of each of the steps varies depending on the scale and type of business needed at a certain point in time.

For example, a small-scale business contract usually takes a shorter time to finish every step of the deal. A mid-sized deal or even a larger one may need a longer time to finalise the agreement. Here is the list of the steps that commonly happen at the initial stage.

1. Mapping the business need

Besides the need for new vendors, the other top examples in this request stage are about raw materials and tools. These are usually helpful for smoothing production and operational activities. In the case of tools, companies may opt for buying or renting, depending on their financial conditions. While for the materials, the firms need to specify the exact volume that is necessary within a certain period of time.

2. Collecting the supporting documents

These data become the terms of the new contract. They include scopes of the project, deliverables, timelines, key requirements, and financial details. The legal team or the contract manager of the firm will write all the details in the contract and propose it to the stakeholders with whom they will work.

3. Formal submission

The next step in the request stage is sending the proposal formally. Nowadays, many firms already make use of an intake form. It refers to a standardised electronic form within a CLM system. Another option is email or letters, which remain popular although they are less efficient than the electronic choice.

4. Starting the process

After they are all complete, the party sends the proposal to the relevant departments. Common examples of the divisions are the legal or a special team on business contracts. They will be responsible for making the draft, contacting the intended outside party, and handling the rest. When necessary, they will help negotiate the terms in the draft.

5. Stakeholder notification and assignment

Sometimes, the contract will deal with other internal teams. As such, the party that initiates the contract should send the duties and responsibilities that will support the contract’s goals. For example, in the case of purchasing new IT tools, the IT division will request the help of the Finance and procurement divisions.

Common mistakes in making a contract request

The request stage in contract making is prone to at least three big errors. The first relates to a lack of information regarding specific details in the contract terms. They include the scope of work, deliverables, and timelines. As a result, when the agreement progresses, the intended party may not meet the exact target or rework their duties.

The second mistake is linked to unclear business goals or what the requester hopes to gain from the contract. Sometimes, the expectations are too abstract or too wide. For example, the requester only says it wants to gain “reasonable clothing volume within a month” instead of “100 clothing pieces in 30 workdays”.

The third error at the request stage seems trivial, but it can be significant. This refers to not using standardised forms or processes. For example, a requester opts for email correspondence instead of the online contract system. This method leads to a higher error rate and inconsistent data. Further, all of the parties involved will find it hard to track the progress of the contract.