October 30, 2014

Are You Afraid of the Dark?: Manage Risk Through Visibility



The scariest part of this Halloween season might be what’s lurking in the dark.  

We’re not talking about spiders and skeletons, ghouls or goblins; we’re talking about all the important – dare we say critical – information about your business that is kept hidden in filing cabinets, inboxes and shared drives. That’s right: contract data. The phrase alone may be enough to send chills up the spine of every General Counsel and Chief Compliance Officer in companies where contract data remains buried, disregarded, left for dead.

Indeed, far too many companies do not have any useful or meaningful way of analyzing the data in their legacy and active contracts – those common yet complex mechanisms by which nearly all of your external and internal affairs are governed. And when you have no way of knowing what and how many contracts you have, where you have them and what they say, you are exposing yourself to the most bone chilling word in today’s business world: risk.

One way to bury risk is to gain visibility into your company’s existing processes, knowledge and data. Visibility is the light bulb in the basement, the candle in the attic, the flashlight in the graveyard, the car keys in the abandoned truck with a full tank of gas.

How does one go about gaining the visibility that equates to adequate risk management?
The first step is to understand what is going around within and around your business. From a contract perspective, this means you have to do what was previously unthinkable. The task of manually compiling and organizing all of your company’s contract data is a terrifying one and rightly so. According to an oft-cited statistic from IACCM, the average global 1000 corporation maintains and manages over 40,000 active contracts. Manual contract creation and archiving? Manual searching and reporting? Downright bloodcurdling.

Adopting tech-based strategies such as contract lifecycle management tools with reporting, trigger and workflow capabilities, will work wonders for increasing both efficiency of and insight into existing processes. But according to CEB’s Risk Intelligence Quarterly: Q2 2014, visibility is more than just knowing what you have, it’s knowing how to use it.

The key to successful risk mitigation, according to the report, is tying data to goals. This is the real-world equivalent of using a cell phone to call 911 when the land lines have been cut by the prowling serial killer: it doesn't make good TV, but it does mean survival.

Visibility into contract data can go far beyond knowing when to renew a contract to activate a discount or being able to quickly locate non-standard, high-risk clauses. It can mean understanding the true worth of certain projects and partnerships. It can mean understanding the value of departments and individual employees. When metrics are extracted to answer specific questions, contract data can be a hugely important source of light.

Don’t let yourself fall victim to the darkness. This Halloween, turn on the light by adopting successful strategies to gain insight into the data at your fingertips, lest risk come knocking on the window…

October 21, 2014

Upcoming Webinar: What is Contract Lifecycle Management?



Contracts serve as the backbone of the modern business. They contain nearly all the information you need to be able to assess the health of your business and your business relationships, both internal and external. The best Contract Lifecycle Management (CLM) solutions available today not only automate contract creation, they import key data points from legacy contracts, so you can search, sort, share and report on the data of your entire contract portfolio.

In order to better explain what we mean by "the best solutions," we're hosting a free webinar on CLM. Think it might be interesting?

Are you...

        unsure where your contracts are or how many you have?
aware that you could be giving more to and getting more from your contracts?  
losing time and money on inefficient, manual-heavy or nonexistent contract management? 
blinded by lack of visibility into your contract data or frustrated by the bottlenecks of sales contracts in the legal department? 
interested in learning more about about how you can organize and share information with colleagues and how it can help your bottom line?
If you answered yes to any of the above questions, or just simply want to know more about CLM, you are invited to join us on Wednesday, October 29th at 12pm EST (5pm GMT).* The webinar will be free, brief and objective. 
Led by Grant Ramsey, our VP of Global Solutions (and all around great guy), this introductory yet deep-diving session is perfect for those who have never heard of CLM, have seriously explored implementing a CLM solution, or are at any stage in between. 
To register, click here.
*If you can't make it to the live webinar, register anyway to receive a link to the recording.

October 09, 2014

What's Wrong with Contract Management Software?

With time, CM software vendors will grow to
match the breadth of the existing opportunity.

In a recent post on his blog, Commitment Matters, Tim Cummins of IACCM observes that, while the usage of contract management (CM) software has increased substantially in recent years, it hasn’t quite lived up to the original hype. As a CM software company, we agree that many vendors and companies alike have been slow to recognize the full range of potential benefits from CM. Instead, vendors have specialized on one or two dimensions of CM – such as centralized storage or speedy drafting – while neglecting other parts of the contract lifecycle. The degree of customization thought necessary to meet individual corporation’s unique needs has often led to a cumbersome end-user experience, which discourages use, thus undercutting the inherent value of the solution.

But before you resign yourself to an eternity of contract blindness, there is hope. Many companies actually do get many things right. Tim mentions some areas – here in quotation – that he claims could jumpstart adoption, namely:






Data: “Contracts are a great untapped bastion of data.”
o   This is the crux of what so many CM vendors have been missing. Companies seeking a CM solution could do so much more than simply organize and structure their contract portfolio. Why would they settle for mere organization and efficiency when they could use CM software to gain access to the wealth of data imbedded in their contract terms in order to achieve better insight into all areas of the enterprise, from sales to HR? As we’ve written about this topic before, we won’t go in depth here, but feel free to check our previous post about how contract data adds value across the business. In short, a company’s contracts contain virtually every piece of important information about an enterprise and its clients, interactions, vendors, employees, assets, obligations, and sales; putting that information to work by analyzing this embedded data means unprecedented insight, which means more power and less risk.

Relationships: “Contracts are related to relationships.”
o   Historically, CM solutions have neglected to appreciate the legal complexity inherent in contract management. A vendor may have assumed, for example, that a contract is simply a transaction between two parties, while failing to recognize multilateral contracts, the legal distinction between parties and third parties, the concept of principal and agent, and the fact that one document can spawn multiple contracts. But just because recognizing the relational nature of contracts isn’t the norm doesn’t preclude some of the best vendors from appreciating that contracts are not static and separate from the context in which they operate.

Complexity: “Contracts are interdependent.”
o   This is part of the bigger point that contracts are messy, complex, and inter-reliant. Understanding contracts depends on understanding the way documents such as amendments, master agreements, statements of work and purchase orders interact with them. It depends on understanding renewals, assignment and novation. But most of all, it depends on recognizing that, contrary to what many people might naturally assume, contracts follow very few rules and are indeed a tool for bending and shaping rules, which means that only the best vendors are able to model them as structured data.

Revenue:
o   One thing that Tim did not mention in his post, but that we think is worth mentioning, was the failure of many CM vendors to adequately automate the creation and negotiation processes. When these are improved on sell-side contracts, the perception of CM can shift from a cost-reducer to a real revenue generator. When, for example, CM software can signal certain contracts for preapproval, salespeople are equipped to push through those urgent, hard sales without wasting time – and potentially losing an opportunity – by handing the contract over to legal to be drawn up, reviewed and/or approved. Often being the first to present a great contract means the difference between walking away empty handed and walking away with a sale.

We have always appreciated that the true value in CM was more than merely in organizing clutter and speeding up burdensome processes – the key is helping companies deal with the multilayered complexities of their entire contract portfolio and lifecycle while gaining unlimited visibility into contract data. While, as Tim mentions, much of the industry is still too narrowly focused on meeting customer demand rather than shaping demand based on innovation, it is still early days. As he points out, there is still “a massive market opportunity;” big steps are being made all the time, and we remain excited about the places we’ll go.  

October 07, 2014

Using Tech to Reduce Paper Use: Why It's Crazy Not To


Law firms use ridiculous amounts of paper. A study from a few years ago estimated that a single attorney in the U.S. will use up to 100,000 sheets per year – that’s nearly 400 pages per workday. 
And that’s crazy.

Sustained awareness campaigns over the last few decades have led to a significant shift in public attitudes towards our personal responsibility to protect the environment. We all know the environmental impacts of paper are obvious, from deforestation to pollution from paper factories. In case you need a refresher, the EPA reports paper makes up 40% of the total waste in the U.S. Even recycling can be a source of pollution due to the sludge produced during de-inking. So in this day and age, when recycling is the norm and electric cars are cool, why haven’t legal departments caught up?

It could be that lawyers love paper – it’s what they’re provided with and expected to provide; it feels familiar in their hands; it’s safe, easily read and marked up; they can take it home; they’re used to it. Courts may be similarly resistant to alternatives to single-sided, hardcopy filings and submissions. Thus, in an industry built on paper documents, run by people trained with paper documents who answer to courts expecting paper documents, reducing paper use will clearly require a change in mindset.

The sheer will to “go green” hasn’t been enough of a motivator for large numbers of firms and departments to significantly change their paper-loving ways. If "doing the right thing" isn't quite enough to instigate change, why don’t we look at it as doing the right thing by both Mother Nature and the bottom line? This shift in thinking away from paper may be facilitated by exploring the array of positives associated with “going green.” According to an article by South University, “Going green may be a popular PR move, but for many businesses, taking green initiatives to cut down on waste helps them run more smoothly, efficiently, and maybe most importantly, cost effectively.” 

Technologies that aid in going paperless result in a number of residual, direct benefits. Implementing tried and true tech initiatives such as electronic billing, e-discovery, document automation and contract management mean less money spent on paper, printing, envelopes, postage, filing and archiving. It means records can no longer be lost by fire, flood, misplacement, or coffee spillage. Centralized electronic document repositories mean more efficiency, organization and possible collaboration among attorneys, teams and offices. Locating important documents or data would entail a simple repository search rather than a desperate dig through filing cabinets. Electronic, centralized filing systems – often included in document automation and contract management software – mean no more piles of poorly organized legacy documents, research, cases, contracts, forms, memos and filings.

Less waste, less spend, less inefficiency, less carbon footprint and more desk space? Cutting down on paper is a no brainer. Beyond fulfilling law firms’ obligation to give back to the community and serve the greater good, reducing paper use is a win for the environment, hardworking lawyers and the bottom line of the firms and businesses they work for. 
It’d be crazy not to.

September 25, 2014

Why the BUILD vs. BUY Question is Much Easier to Answer Than You May Think


Not every "out-of-the-box" CLM solution is one size fits all. Choosing the right vendor means finding a solution flexible enough to handle your needs, complexity and budget. So whatever is in that box might be a little more unique than it first appears. 

You’re ready to implement a contract lifecycle management tool. Your company cannot maintain its place in the competitive market unless it adopts a comprehensive, streamlined system for managing the lifecycle of its contracts, from creation to archiving and everything in between. You need meaningful, complete insight into contract data; you need libraries of best-practice clauses to be shared among attorneys; you need to be able to create contracts with far more speed and accuracy; you need to you need to be able to store and locate your existing contracts; and, most importantly, you need it to be intuitive enough that your team will want to use it.
Now you’re seeking help. You know you need to implement a comprehensive Contract Lifecycle Management (CLM) system. But how? Do you build your own system or do you buy something from a CLM vendor?

Depending on your situation, it could be a really simple decision.

Requirements

In order to determine whether to build or buy, you’ll need to work out exactly what problems the solution will need to solve. This is no easy task, given the conflicting stakeholder expectations and internal politicking that inevitably color any enterprise-wide IT project.
You’ll need to consider the issues that are pressing right now, those that may arise down the track, as well as potential applications and necessities for other business units within your firm. Remember that specialist contract lifecycle management vendors – as well as other businesses who have turned to them – have valuable experience and expertise that will help you appreciate and evaluate the sorts of problems you may want to address and other sources of value a CLM solution may be able to leverage.

While it’s true that smart companies spend a lot of time researching solutions, the answer to the build vs. buy question should become apparent pretty early on. Here’s why:

Building

What does it mean to build your own CLM solution? It means the whole process takes place internally. Once your team works out their specific needs, the buck passes to the IT department, where the solution will be designed, constructed, serviced and maintained. It also means the instruction necessary to get – and keep – your team competent and comfortable using the tool must come from within.

Building may be the way to go if your contract management needs turn out to be truly unique and if you’re confident that your IT department is sufficiently resourced from the perspectives of budget, brainpower, capacity and vision.

Even if you think your IT guys and girls can’t be beat, you still need to be aware of the challenges of building your own document assembly system. Here are some things to keep in mind:

  • It's not just the tool that needs building. There's support, maintenance and possible enhancements down the line. As your business grows, your CLM solution will need the capacity to scale. Also don't underestimate the effort that will go into testing. 
  • On the surface, building a CLM solution may seem straightforward. As with any area of expertise, it's only when you dig deeper that you can begin to grasp the complexity that lurks in building the logic behind each distinct contract template, not to mention the various and complex ways in which their logic interacts and co-depends.
  • Building anything from scratch will mean more customization right off the bat, but it will also take longer to implement than a vendor-supplied solution.
  • While a good end user experience is essential, it’s only half the battle. Templates need to be updated and maintained. Without the right authoring tools, maintenance needs can easily turn your project into a money pit.
If your project really is a "one off "with well-known, defined requirements that are unlikely to change over time and you have a well-resourced, skilled development team, then building your CLM internally could be your answer.

Buying

What does buying a CLM solution mean? To begin, it’s more than ordering an out-of-the-box product. Many specialized CLM providers understand that no two companies are the same and will work with you to fine-tune solutions tailored to your unique needs and issues. Additionally, CLM providers may offer various levels of support, based on your requirements and budget. They are also able to foresee problems – as well as opportunities to leverage contract data – that your team may have overlooked.

Here are some considerations:

  • You’ll need to assess various CLM vendors and identify the features and functionality that best match your business problem. Take advantage of other customers having been through what you're going through. Use the vendors to help you to define your business requirements. Remember, they may be able to foresee problems (and solutions) you hadn’t even contemplated.
  • Make sure the system you choose can aptly handle the tricky parts. Things are always more complicated that they first appear. Complexity will inevitably increase as you delve deeper, and you’ll need a stable, easy way to automate it. Be wary of anyone who offers to automate your contract portfolio in five easy steps; any solution worth its salt – and your money – will take time and effort to implement successfully. 
  • Confirm that the solution you choose works and integrates with your other applications and infrastructure. Requirements change over time and growth trajectories. Systems with flexible APIs that are based on open standards enable you to future-proof your investment.

Hybrid

It’s possible that, after toiling through your pain points, the IT department’s capabilities and vendor-proposed solutions, nothing will seem quite right. For example, your own IT team may not have the wherewithal to build a solution from the ground up but no vendor you explored could handle the sensitivity of your documents or the breadth of your contract portfolio. If something like this is the case, a hybrid solution – in which your IT team works hand-in-hand designing and/or building aspects of your CLM solution – may be available. It is also important to keep in mind that many seasoned CLM vendors are willing and able to design bespoke solutions that sit on top of their pre-designed solutions to fit your needs.

That wasn’t hard, was it?

Essentially, the answer to the Build vs. Buy question is a simple one: it will almost always be Buy.  Building your own CLM tool from the ground up will be worthwhile only where you have the time, budget, brains, vision, and truly unique requirements to make the project viable. Buying from the right provider means you will have the benefit of expert insight, faster turnaround, personalized service and maintenance, bespoke features, increased ability to handle complexity and most likely better value.
So what makes a provider The One?

Ah, that’s the stuff of another post. Until then, happy contracting.

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