In today’s business landscape, digital solutions for managing contracts, vendors, suppliers, and transactions are critical for maintaining efficiency, reducing risk, and ensuring compliance. However, there’s often confusion when it comes to differentiating between tools like Contract Lifecycle Management (CLM), Supplier Lifecycle Management (SLM), E-signature software, and Contract Management Software (CMS).Each serves a specific purpose, and understanding their unique roles can help organizations choose the right tools for their needs. In this post, we'll break down the key differences between these four systems.
Contract Lifecycle Management (CLM) refers to the process of managing contracts from initiation to execution, compliance, and renewal. A CLM system automates and streamlines this entire lifecycle, ensuring that contracts are properly drafted, negotiated, approved, signed, and stored for future use.
CLM systems are essential for large organizations that deal with complex contracts involving multiple stakeholders. They reduce manual errors, improve compliance, and enhance the speed of the contracting process.
It’s pretty rare to see a full blown implementation of CLM software in multifamily. CLM is usually overkill for the types of contracts that we see in multifamily. That said, there are some exceptions when companies are frequently going back and forth with contract revisions with other parties. CLM is the perfect solution for this, but too often we just see people passing Word Documents back and forth with ever changing version names. Consider a CLM if that’s one of your pains.
Supplier Lifecycle Management (SLM) focuses on the entire relationship between a business and its suppliers. This lifecycle includes supplier selection, onboarding, performance evaluation, risk management, and offboarding. SLM systems are designed to manage and optimize these supplier relationships. (see also Supplier Relationship Management - like a CRM of your suppliers)
For businesses relying on third-party suppliers, managing the risks associated with suppliers is critical. SLM ensures that companies maintain high-quality standards, mitigate supply chain risks, and foster stronger supplier relationships.
Risk management (usually called Compliance) is very common in multifamily, but it’s rare to have any other aspect of a professional SLM implemented in multifamily. Considering how often properties and/or vendors are onboarded and offboarded, SLM makes a lot of sense for multifamily, but we don’t think that anyone will even consider SLM until it’s built specifically for our industry.
What is E-Signature Software?
E-signature software allows users to electronically sign documents, providing a legally binding alternative to traditional ink signatures. It is used across various industries to streamline signing processes, whether for contracts, approvals, or consent forms.
E-signature tools accelerate the signing process, eliminating the need for physical signatures and reducing paperwork. They are particularly useful in remote or distributed teams where signers are in different locations.
Despite a few people still clinging to their fountain pen and desktop scanner for dear life, most companies are signing some - but usually not all - documents electronically. If you’re receiving contracts from vendors and suppliers, then it’s probably using electronic signatures, which at least makes up most of your volume. DocuSign, or something similar, gains you back massive efficiency, but it still won’t store your signed contracts the way you want them to be associated with properties. For that, you need to upgrade to Contract Management Software.
Contract Management Software (CMS) provides a centralized repository for storing, organizing, and retrieving contracts. While it’s closely related to CLM, contract management software is more focused on the basic storage and management of contracts rather than the entire lifecycle.
For businesses with a high volume of contracts, a CMS helps avoid the chaos of misplaced documents and missed deadlines. It simplifies the management of active contracts without necessarily offering the advanced features of CLM.
Most of the PMS software will give you a “place to put your contracts” but there is no advantage to this storage location over Sharepoint. In fact, Sharepoint is usually the preference once users see the antiquated interfaces in the PMS. That said, Pivott was made specifically to fill this void, and you can probably expect more verticalization of technology like this because it’s only useful to multifamily if it’s made specifically for multifamily.
While there’s overlap between these tools, each addresses a distinct area of business management:
Choosing the right tool depends on your organization’s needs. If you're looking to manage the entire contract process with workflow automation, then CLM is the answer. If your focus is on managing supplier relationships, SLM is essential. E-signature software is perfect for digitizing document signing, while contract management software provides an efficient way to store and retrieve contracts. By understanding the differences, businesses can select the most effective tools to enhance operational efficiency and reduce risk.
If your multifamily organization is just getting started, we recommend that you start with an even narrow focus. Look for Contract Management Software, but specifically focus on a good Contract Repository that links contracts to properties.
