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Return to Agreements Page.
An Agreement in ICM is based on these main concepts:
- Template is a predefined format that gets used for a given agreement. It consists of the text that is relevant to the type of agreement being created. Templates in ICM are used to organize clauses and give a certain structure to all the attributes.
- Attribute can be defined as a variable or placeholder for the actual data for the agreement. This is data that changes for each agreement. For example, [Company Name] and [Legal Address] can be attributes that will be replaced by the actual name and address of the company the agreement is being signed with.
- Clauses contain the terms and conditions of the agreement. For example, the payment terms will be 45 days from the date of invoice. Clauses can be rule or attribute based.
- Rules help automate the workflow and define conditions that must be met for an agreement to get executed and stay in force. They enforce specific roles for certain users and comply with predefined business conditions. For example, if the payment is not received within 45 days of the date of the invoice, a 10% penalty on the outstanding amount will be levied.
- Approvals and signatories are an integral part of creating an agreement and are rule based. Who the agreement needs to be approved by and who the authorized signatory should be (based on the legal entity entering into an agreement), is defined by rules in ICM.
This figure shows these building blocks of an Agreement in ICM:
While the actual workflow of an agreement within ICM can be quite complex and involved, it can be summarized in these 5 steps:
1. Create contract request: when someone in your organization, such as a department manager wants to engage a vendor for certain services over a length of time, the individual can raise that request with the procurement department that can then work on that agreement. Depending on the workflow adopted, your organization may:
- enforce this step so all contracts are initiated and drafted only by 1 department, or
- make this step completely optional, so it can be skipped by someone who is an expert at contracting and it's process.
2. Create agreement: this involves the primary owner (creator of the agreement) defining the contract type, selecting attributes and template, and verifying the details entered. See Create Agreements Page for complete details.
3. Review and approve agreement: Once the primary owner has created an internal draft of the agreement, it gets published and this published draft can now be sent for reviews and approvals to the team of people that are working on this agreement in various roles.
in this figure shows all the possible states an agreement can be in and the various roles involved:
