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…