Archive: December, 2015
I spent this week with our talented team in London and talking with leaders in both financial services and insurance. We’ve recently delivered a new Contract Model that enables companies to more effectively manage risk. Most of the leaders I spoke with expressed deep concerns about the risk embedded in their contracts- one top ten bank said “we have all the data, we just don’t know if it’s the right data”.
It’s a huge problem with contracts because so much of the data is interpreted. A limitations of liability clause might be 3 paragraphs in one contract and 1 in another and say the same thing. In order for the data to be used properly, it has to be interpreted and stored as data so it can be analyzed, correlated and used for decision making?
Why is this so hard? One customer outlined their contract management nightmare when they tried to use a document management, workflow, master data management and data warehouse to extract and report on contract data. Just keeping the systems in sync was a nightmare. After 3 years and $25m USD, they abandoned the project. What they have now is a very expensive electronic filing cabinet.
Contract “data” doesn’t really exist until it is interpreted and normalized; our Universal Contract Model (UCM) does that for companies and shows them a 360 degree view of their contracts. It’s real and it works. Now contract data can be valuable in managing risk across the enterprise.
Are you still drafting thousands of contracts manually? In Word? Or storing multiple versions of paper contracts in a filing cabinet? Well, you’re not alone.
Exari recently surveyed 92 Corporate Counsel and compliance professionals about their habits and challenges for contract creation, storage and legal technology. More than 75% reported that they were still creating contracts in Microsoft Word, using some form of “copy and paste” template, while only 1 out of 10 currently use a document generation software to streamline the process. Half of the participants (47%) said they were still using paper filing systems to house corporate contracts. Their top pain points included:
- Slow contract approval processes (59%)
- Little or non-existent insight into risk (39%)
- Missing key milestones (27%)
- Difficulty with internal collaboration (25%)
- Risk of error (23%)
With outdated practices for generating and storing contracts, you’ll lack complete visibility into all of your agreements, increasing your risks such as liability, being underpaid or overcharged and missing key milestones. By implementing an efficient contracting process, you won’t miss a step. Not to mention you’ll be able to pull information during a crisis in minutes, rather than taking hours to dig up and sift through multiple paper copies. Avoid missing renewal rates, reduce the length of sales cycles, streamline negotiations and increase internal collaboration.
Doesn’t that sound better than the ol’ “copy and paste”?