Why Complexity Matters

Einstein once said that everything should be made as simple as possible, but not simpler. And so it is with document automation. Everyone wants to make it as simple as possible. But anyone who tells you that it is simple (presumably by consuming whatever snake oil they are selling) is lying. Some document composition tasks are, by their very nature, highly complex, and some will make your head hurt. The challenge is to find the simplest and most effective way of dealing with them, so that you can fully reap the rewards of automation. Which begs two obvious question: what do we mean by complexity and does it affect your documents?


Yes, you do need to worry about complexity...

For present purposes, let's break complexity into three buckets: low complexity; medium complexity; and high complexity.

If all you ever need to do is some kind of mail merge or field substitution, where you feed in some names, addresses, products or prices, then you are dealing with low complexity automation. This is the home turf of "customer communications management", which, for the most part, means mass-mailing thousands of letters to thousands of customers, and making sure it says "Dear Bob" or "Dear Betty" at the top (this personal touch making Bob and Betty feel all warm and fuzzy). The documents might have some picky layout or branding, but the content is largely standardized and the variations are limited and controlled.

As you move from consumer (B2C) to business (B2B) transactions, where contracts are negotiated and paperwork is much less standard, you enter the world of medium complexity automation. In order to handle negotiated fall-back language in contracts, you need to support conditional logic, auto-numbering, dynamic cross-references, and page layouts that work no matter what combination of clauses ends up in the final draft. You also encounter repeating arrays of data, which is a fancy way of saying that lists of names, prices or products might need to contain 1, 2, 3 or 30 items. And because real people need to tailor each document to reflect the deals they negotiate, you have the added complexity of designing an intuitive, interactive, wizard (rather than simply pressing a button to run a batch process).

The final frontier is high complexity automation. We won't attempt an exhaustive list of the joys that await, but we will give you a taste. You may need to assemble not one, but 20 different documents, or a subset of those 20 documents, all from a single questionnaire, without ever asking a redundant question. You may need to handle deeply nested conditional logic, where you include some special compliance-related clauses only if you are selling pink widgets, manufactured in the third world, sold by your US operating subsidiary, and bundled with consulting services in the State of Texas (everything's bigger in Texas). You may need to generate documents that list repeating data (for example, a description of all the property you own and the value of each item), within other lists of repeating data (for example, all the locations where you do business). Or you may need to automate a set of documents that sometimes has two parties (a lender and a borrower) and sometimes has many different parties (4 lenders, 2 borrowers, and 3 guarantors). There's a prize for anyone who comes up with a cool-sounding collective noun that covers borrowers and guarantors as a single class.

Now, before you say "most of my documents are low-medium complexity", it's important to remember that what matters is not average complexity, but peak complexity. For whatever package of documents you need to automate to get a new and improved business process, ask yourself what's the most complex challenge in the most complex document. If this is a high complexity hurdle, then you will need to clear it to solve your business problem. This "peak complexity" is what really matters.



Which is not to say that you don't have choices about how you deal with peak complexity.

For a one-off, tactical solution, you may choose a low-cost tool which can handle some of the automation out-of-the-box, and pay for custom-coding to solve the tricky bits. Or you could simply automate the easy bits and tell your users to use a manual work-around for the rest. But these approaches carry significant risks.

Custom-coding is a rabbit hole which can get deeper and deeper as you stumble into one unexpected surprise after another. It also leaves you dependent on the programmers who cut the code, which can make maintenance and enhancements slow, expensive and in some cases impossible (for example, when the only person who understands the code moves on to other things). And manual work-arounds can be just the excuse users need to reject a promising new solution. Plenty of people hate change, and if a change is clunky they will gleefully use that to justify a return to their bad old ways. Manual steps also threaten the compliance, cost and speed benefits the solution was supposed to deliver.

For enterprises looking beyond the tactical, to the full range of document-intensive processes that can benefit from automation, it's important to make investment decisions with peak complexity in mind. There's great value in document automation. But if you don't have the tools to handle peak complexity, you may be leaving much of that value on the table.

How to Manage Revenue through Sales Contract Automation

Marc Benioff, CEO of Salesforce.com, has a new book called Behind the Cloud- the untold story of how salesforce.com went from idea to billion-dollar company and revolutionized an industry. If you are interesting in how to grow a business, CRM, or SaaS, the book is worth reading. If you read carefully you’ll see how Marc talks about the exact problem that document assembly can help solve.

Companies with fast growth, complex products or complex contracts have trouble closing deals quickly. Perhaps just as challenging, is enforcing consistency in contracts to ensure compliance, reduce risk, and dictate how the company can recognize revenue. Benioff says,

“Our sales team was selling to the customer constantly. Because we were continually adding new users or innovating new products, it had become common to renegotiate the contracts and create new ones. That turned into an organizational nightmare for managing revenue, and the ambiguity that came from renegotiating made us susceptible to risk. We needed to find a way to define everything up front and standardize the way we did sales contracts. We had to negotiate all the future possibilities ahead of time to guarantee that we got the best terms. . .we instituted a series of processes, practices, and programs to help make us more systematic in the way we approached a number of issues. For example, our legal team began to monitor the acceptable degree of risk in customer contracts.”

With Document Assembly, you can create templates that contemplate all of your business issues and include approved negotiated fallbacks. By automating your contracts, you can dramatically speed up sales contracting and enforce standards, as well as scoring and guiding the acceptable risk in each contract.

Learn more about automating your sales contracts here or listen to a webinar by Dow Jones and DLA Piper to learn "How sales teams can reduce the time and expense of closing deals by 50%" here.

Have you reduced the risk in your sales contracts? Please tell us how in the comments below

A law firm that makes life simple for clients

As a lawyer, have you ever wondered how your clients would describe you? Would they say you're client-focused? Commercial? Concise? Cost-effective?

If not, you might be interested in Australian Business Lawyers. Lawyers Weekly has an article on how the Sydney-based firm has built a successful workplace law practice over the past 10 years by making life simple for its clients. So, how has ABL done it?

One way has been by ensuring that written advice is as straightforward as possible. Many firms aspire to write in Plain English. ABL actually does.

Another way has been by providing clients, most of whom are HR professionals, with access to HR Advance, the firm's online documents service. ABL created HR Advance by combining its deep employment law expertise with Exari's document assembly platform. The Lawyer's Weekly article explains:

[HR Advance is] a toolkit of HR documents which HR professionals can use to generate workplace-related documents online via sets of simple questionnaires. According to [Managing Partner, Tim] Capelin, the toolkit recognises that certain areas of workplace law are essentially becoming commodities, and while most law firms will attempt to produce consulting services around such areas, ABL believe the process can be much cheaper and simpler.

Thousands of subscribers pay a subscription fee which the firm says is usually less than what it would cost for one consultation session with a law firm. The product won an award for IT innovation in law in 2007.

All firms claim to be client-focused. ABL is one of the few that has actually done something about it by developing an offering tailored to its clients' needs.

To learn more about ABL's use of Exari for HR Advance click here.

Do you know of other firms that are reinventing the way legal services are provided? If so, let us know in the comments below. We'd love to hear about it.

40% of legal budgets spent on contract support

IACCM research “has found that in many organizations, bid and contract support can account for more than 40% of the legal budget.”

Accordingly, recent comments made by Colleen Gallagher of Huron Consulting should come as no surprise. At an IACCM meeting, Gallagher explained that current pressure on legal departments to increase efficiency has made contract management ‘top of mind’ for many in-house lawyers. She then outlined eight issues on the agendas of law departments that analyze their contracting processes. IACCM President, Tim Cummins has posted a summary of Gallagher's talk which is definitely worth reading.

Poor understanding of contracting costs

Of particular interest to me was the point that “few organizations have any consolidated understanding of the costs associated with the development and management of their contracts.”

Even though it’s entirely consistent with our experience at Exari, I never cease to be amazed by this. I just don't understand why companies seem so oblivious to the level of waste in their contracting processes. Yes, I know that the cross-functional nature of the process adds complexity. But isn't that what all those lean/six sigma/process improvement people are there for?

If you knew that your contracting processes accounted for around 40% of your costs, would you want to look for potential efficiencies?

Have you already improved efficiencies in your contracts? If so, please tell us about it in the comments below.

Click here to learn how Exari helps corporate law departments achieve higher levels of efficiency.

Related Posts:

Is Your Procurement Team Best in Show?

The 4 Key Challenges of Contract Management for Law Departments

Breaking the "Groundhog Day" Curse

In this month’s Global Broker and Underwriter Magazine, Lloyd’s CEO Richard Ward, talks about the market’s need to “get it’s act together” to provide better service to its clients, or risk them going elsewhere. He emphasises the need for the market to embrace the Lloyd’s Exchange initiative and says that, “To some respects the market is like a Groundhog Day as nothing has materially changed.”

The challenge of the Exchange is to get more information flowing between broker and underwriter. This initiative is at the exact same point where others have failed and we have heard the same rallying cry from previous advocates of change. But how can you break through to the next level and actually get meaningful volumes of information being transmitted between trading partners?

The answer is certainly not to ask the brokers to work harder or spend more money to make it happen. They will merely smile sweetly (again) and carry on with their own priorities.

So, how do you break the cycle of failure? - Change the path of least resistance.

Today, brokers often use Word to generate the documents they need to negotiate a client’s risk. In doing so, they trust their support staff to be on top of the latest market reform initiatives and their company’s rules. And then, most of the really useful information ends up locked inside these Word documents.

There is a growing recognition, however, that by using specialist document automation technology such as Exari, brokers can improve turn-around times (documents produced in 80% less time) while ensuring greater accuracy and built-in compliance. Our broker clients tell us that it’s easier to use a structured mechanism for building their documents than relying upon the free form use of word processing.

Using Exari, documents are “assembled” from the relevant sections, clauses, paragraphs and words that are applicable to the risk class. During that process, data is automatically being gathered in the background. It is that data that can be transformed into a message and sent to underwriters via the Exchange.

Everyone wins - Brokers get better documents faster; Underwriters have to do less checking since there are fewer elements that can go wrong; Clients get better service and the Exchange builds up its message traffic.

If you use a document assembly solution like Exari to structure the creation of your documents at the beginning of the placement process you can break the Groundhog Day curse.


This post was guest authored by Martin Kett, Exari's VP of Insurance Client Development.