Category: Contract Automation
If you’re just joining in now, feel free to go back to part 1 of this blog series.
If not, here is a quick recap:
There isn’t much time left to come up with a plan for the new revenue recognition guidelines since they are coming into effect in 2018. There are a lot of factors and hard work that go into complying with these new standards, so we’ve simplified the process by taking a three-step approach to help you on your journey to increasing compliance.
Step 1: Assessment- By now you should have already performed an initial assessment of your systems, processes and internal controls. This is meant to help you understand exactly what information needs to be captured and reported on, and where that may require certain modifications to your current process, system, and/or controls. It will also help you better prepare for the impact it will have on your business.
Step 2: Identifying the Impact
Once you have completed your internal assessment and have a better idea of what information needs to be captured and reported on, you will now need to consider how the new standard will impact your entire organization. How will it affect your sales team? Your accounting department? Do you need to re-evaluate company expenses? Do you know exactly where all of your contracts are located with each customer and are they the correct, finalized and signed version?
In order to fully identify the impact, you will need to locate and organize each customer contract. The new standard calls for a review of each agreement to understand if any modifications need to be made. For example, the performance obligations changes include determining whether or not a good or service needs to be accounted for separately or be combined into one single performance obligation. You may find you have more, or fewer performance obligations than in the past, but either way you will need to double check all contracts to make sure you are in compliance.
If your contracts are not yet organized in one central and secure repository, then you could be putting your entire business at risk. Maybe you have thousands of contracts that are living with the sales or procurement departments. Maybe you don’t have the latest version of an executed agreement. Getting organized is going to be a huge undertaking and will require cross-departmental participation. Implementing enterprise contract management software can streamline the process, save valuable time, and increase compliance and best practices throughout your organization. By implementing a solution you could capture the data from your contracts right off the bat and see the implications on your revenue within minutes. This would save much needed time, resources and costs associated with failing to recognize revenue.
So, since you are already reviewing your process for the new standards consider deepening your insight into your contractual data. It’s the perfect time to incorporate enterprise contract management software into your revenue recognition process.
If you’re interested in learning how an enterprise contract management platform can help you increase compliance throughout your entire organization, contact us here.
Tune in next week for the third and final step of the process where we discuss actions for implementing the changes.
Last Tuesday we held a joint webinar with IACCM’s CEO Tim Cummins alongside our Co-Founder Jamie Wodetzki, in which they discussed the topic of Artificial Intelligence (A.I.) for contracts professionals, what it means and how it will impact their business and career in the near future.
A.I. is creeping into nearly every aspect of our lives – whether we realize it or not. We’ve been hearing promises that A.I. will change how we work and live for decades, yet over the last few years, there has been an explosion of progress fueled by leaps in computing power, natural language processing, and neural network design.
So, we all have a choice… A.I. is something we can learn more about and begin to embrace or we can choose to turn the other way and hope it won’t upend our work and personal lives. With any luck, we may be pleasantly surprised that A.I will, in fact, offer up new tools and insights we can use to our advantage in our professional daily lives.
In order to understand any topic, you must do your initial research. A participant from the webinar asked for recommendations on where they could look to learn more about A.I. and how they should get started. So, we put together an A.I. reading list below to help you get started on your exploration phase. Don’t limit yourself to just this reading list – there are numerous podcasts, articles, and videos out there. If you find anything particularly interesting, please don’t be greedy and share in the comments section with the rest of us!
You did your Google research, re-watched the webinar, read the provided reading list below and watched the movie Arrival and now know who Louise Banks is- you’re basically an A.I. expert. So the question now is, what A.I. tools are out there that can complement the work you are doing as a contracts professional?
Now that you understand the benefits A.I. can bring to your business and career, you can start to evaluate your current processes, systems, and controls. Think deeper about how A.I. can automate document creation, connect enterprise systems to share data, or generate deeper analytics for reporting. Thinking about improvements in your current daily tasks will help you identify what requirements are needed when evaluating different platforms. Data capture of legacy agreements, advanced reporting capabilities, contract automation and enterprise integrations should be a few of the top capabilities you look for when evaluating a contract management platform.
Once you have evaluated and chosen a platform, embrace it! Adopt it company-wide, take action to learn the ins and outs and everything it can help you accomplish, and teach your colleagues about it. The more you learn about how A.I. can complement your daily tasks in your career, the less fearful you will be of a complete takeover. You’ll be seen as a Contracts A.I. Master and everyone will thank you for making their jobs just a little easier, and a lot less manual.
If you are in the exploration or evaluation phase, don’t hesitate to contact us now to discuss how our enterprise contract management platform can help meet your business challenges and prepare you for A.I.
An A.I. Reading List for Contracts Professionals
Artificial Intelligence is entering the contracts world. In order to best prepare, it is necessary to take steps to understand how it will impact contracts professionals and their careers and businesses. Our co-founder Jamie Wodetzki has put together a comprehensive reading resource guide below to help you get started on your initial research.
Humans Need Not Apply: A Guide to Wealth and Work in the Age of Artificial Intelligence, Yale University Press, 2015, Jerry Kaplan, http://jerrykaplan.com/books/
The Great AI Awakening, The New York Times Magazine, December 14, 2016, Gideon Lewis-Kraus, https://www.nytimes.com/2016/12/14/magazine/the-great-ai-awakening.html
The Future of the Professions, Oxford University Press, 2015, Richard Susskind and Daniel Susskind, http://www.susskind.com
An executive’s guide to machine learning, McKinsey Quarterly, June 2015, Dorian Pyle and Cristina San Jose, http://www.mckinsey.com/industries/high-tech/our-insights/an-executives-guide-to-machine-learning
Where machines could replace humans—and where they can’t (yet), McKinsey Quarterly, July 2016, Michael Chui, James Manyika, and Mehdi Miremadi, http://www.mckinsey.com/business-functions/digital-mckinsey/our-insights/where-machines-could-replace-humans-and-where-they-cant-yet
The Master Algorithm: How the Quest for the Ultimate Learning Machine Will Remake Our World, Basic Books, 2015, Pedro Domingos, http://www.basicbooks.com/full-details?isbn=9780465065707
Superintelligence: Paths, Dangers, Strategies, Oxford University Press, 2014, Nick Bostrom, https://global.oup.com/academic/product/superintelligence-9780198739838
Computational Legal Studies, https://www.computationallegalstudies.com/
Is your team ready for the new international revenue recognition standards? Chances are you’ve got a small army working on this problem, but how will your business be affected? Are you on track or behind? Is there risk that your policies, procedures, and systems are not going to be ready in time for compliance? Even the most forward thinking businesses acknowledge that they’re on a journey to find the best methods and systems for institutionalizing best practice into their accounting departments.
We’re sprinting towards compliance, yet recognizing your company’s revenue is a crucial and complex, and the spotlight is on your team to get it right. If you’re interested in a refresher on the standards and a high-level survey of what your team needs to be working on, we’ve prepared an e-Book on what every Executive needs to know about these standards.
The current requirements for recognizing revenue in the United States are the Generally Accepted Accounting Principles (GAAP) and are viewed as overly complex and fragmented. The International Financial Reporting Standards (IFRS) have also been criticized for not providing enough guidance. For these reasons, the new International Revenue Recognition Standards were created to standardize the way revenue is recognized across all organizations globally.
With a 2018 effective date, the clock is ticking for companies to begin to wrap their head around what it means for them, and what they need to do to begin preparing. Although it will take time to evaluate the most efficient way to transition to these new standards, in the long-run it will make it much easier for companies and industries to compare financial statements- if widespread adoption unfolds. This new standard will actually help companies gain deeper insight into their contract data. Some data, in fact, that is buried within complex contractual agreements that could cause major risk unless you uncover them with a contract management platform.
Companies must understand how these standards will impact them, what needs to be done to prepare for a new process, and finally, how to evaluate, implement and adopt an enterprise-wide solution.
In this three-part blog series, we will walk through what Executives need to do in order to prepare as soon as possible. There are three steps to success for this process.
Step 1: Assessment
When first understanding the new guidelines and how they will specifically apply to your transactions, you’re likely going to run into some challenges along the way. Having an initial assessment of your business will help you understand exactly what information needs to be captured and reported on, and where that may require certain modifications to your current process, system, and/or controls.
What to consider during your initial assessment:
- Look at how the new standards will affect your operational and performance metrics
- Perform a technical assessment of revenue transactions
- Determine the impact on miscellaneous aspects of your business
- Form a team from different departments to identify any ripple effects
- Analyze how existing contracts would be recorded under the new standard
2018 is less than a year away, and this isn’t something that can be transitioned overnight, or even over a month. Start the process today by downloading your free e-book now to help you get started.
Whether you like it or not, Artificial Intelligence (AI) is here – and it’s not only here to stay, it’s here to thrive. In a recent Hubspot-led survey of more than 1,400 global consumers, it was found that 63% of people who use AI technology don’t even realize they are using it. AI is that ingrained into our daily lives, both at home and in the office. Now, imagine the doors you could open (quite literally, in fact) through the conscious and purpose-driven use of AI.
Where does AI exist now?
If you own a smartphone, shop online, or chat via messenger with a customer service rep – congratulations, you are a user of AI! Voice recognition and search assistants (like Siri or Alexa) are available on 3.9 billion Apple, Android and Windows devices being used worldwide. Over 4 billion people globally are using messaging apps.
The White House recently released a report on the current state of AI and its potential to help address major challenges society faces.The way we live, connect and search on a daily basis is completely transforming- and it’s just the beginning.
Into the Future
Changing the way we use technology on a personal basis also means enhancing the way we do business. Integrating artificial intelligence into the workplace holds untold potential to increasing efficiency, certainty and productivity in our work. But what does it mean for contracts professionals?
We are seeing it rise up in the contract management space, making data extraction painless for legacy contracts and providing faster and better insights into contractual data. It’s going to change the way contracts professionals work on a day to day basis, ultimately affecting both their business and their career.
What are you doing to get ready for AI? Join us for a webinar with IACCM on Tuesday, February 28th as we explore the history of AI, what it means for contracts professionals and how you can develop a plan to take advantage of this game-changing technology.
Historically, businesses have struggled with successful adoption of Contract Management systems across their entire enterprise. Often times, only a small department will use the system around their specific processes, leaving other areas of the business in the dark. While this may increase process efficiency for one group, it does not solve the issue of contract certainty across all disciplines and all contract types.
The problem is that in the past, Contract Management has always been an extension of another solution (ie ERP or CRM). The systems also relied heavily on customized workflows, as they focused more on contract processes instead of the contract itself. These systems have failed adoption for various reasons, such as:
- Lack of proper visibility across the entire enterprise
- High risk of duplicates due to multiple systems for each department
- Complex customization for each users requirements
- Fragmented process of managing and storing data
Exari has taken a completely different approach to Contract Management from the start. We think of contracts as golden sources of data for your business, not just a trigger for a workflow. We offer a stand-alone Enterprise Contract Lifecycle Management Platform, NOT a thrown together feature spun off of an ERP or CRM. The Exari solution allows all disciplines within an enterprise to leverage the system without forcing them into an unnatural process, or make them duplicate their efforts.
Legal can stay in Word, Sales can stay in their CRM, Finance can stay in their ERP-but while still continuing to leverage the system. Having a centralized platform that can seamlessly share data with other systems across the entire enterprise has proven to be CRITICAL for adoption.
Stop siloing your data and increasing maintenance costs for fragmented processes. Join the 21st century and achieve 100% contract certainty across every contract type in your business with Exari Contracts™ Enterprise.
Here’s a strange comparison for you: contracts are like concrete. But what do legal agreements have to do with building materials?
Think about a concrete foundation. If a foundation isn’t rock solid, whatever is constructed on top of it could collapse without warning-the same is true about any company. A business is only as strong as the contracts it’s built upon and its ability to fully understand and comply with those contracts. Things like weak liability and intellectual property protections, missed contractual milestones, inadvertent breaches, and misunderstood termination for convenience clauses are all recipes for disaster.
What if your company could eliminate that unpredictability and achieve total certainty over what’s inside 100% of its contracts? At Exari, we see this as a simple three-step process.
Step 1: Gain visibility into your existing portfolio of contracts.
Whether your company has dozens of contracts or thousands of them, it can be nearly impossible to keep track of every single requirement, restriction, and deadline. When your company’s revenue and reputation are on the line, staying ahead of your obligations and out of breach is imperative. But how could you do this without having to read every clause in every contract?
The answer is simple: Turn your documents into data. When contracts are imported into the Exari system, the most important clauses and information are pulled from the document, allowing business users to visualize and analyze this data in seconds with the help of dozens of standard reports.
Step 2: Gain visibility into your contractual risk.
Every contract contains several important risk factors…termination clauses, IP protections, payment terms, liability limitations, etc. Could you assess precisely how much risk is contained in a particular contract? How about the risk contained in your entire contract portfolio? Unfortunately, for many companies the answer is “no.”
That’s why Exari created a revolutionary algorithm that analyzes more than 20 specific contractual data points, determines the contract’s risk to your organization, and assigns it a simple risk score. And since these scores are based on a uniform set of data, you can compare apples-to-apples and fully understand the risk (or lack thereof) across your entire enterprise.
Step 3: Gain visibility into your contracting practices.
The easiest way to make sure that your company is creating low-risk agreements is to develop a standard procedure that promotes good contracting practices and prevents so-called “rogue contracting”. The question then becomes, how do you both tightly control your contracts while still providing the flexibility necessary to prevent legal department bottlenecks?
Exari’s DocGen™ allows all business users to do just that with an innovative and streamlined document automation system. Using a simple question and answer “Wizard” interview, DocGen™ lets any user create pre-approved, ironclad contracts, while integrated workflows loop-in the correct people, as needed.
Achieving 100% Contract Certainty™ has never been easier for businesses large and small. Think of it as reinforcing your wobbly foundation. You’ll be glad you did.
And since a picture’s worth a thousand words, please take a couple minutes to enjoy our newest video “100% Contract Certainty.”
At Exari we’re always innovating. Coming up with new strategies for making our customers’ experience even better is an obsession! We get the chance to talk with hundreds of companies about the contract creation process and we are consistently asked for help in making it more streamlined. A primary benefit of a contract management solution is breaking up the many steps involved in contract drafting, negotiation and execution processes so they can be more easily automated- freeing up more time for you to get back to important tasks. In addition to helping you easily generate contracts and better manage them, we are also surveying the market to understand what tools will help provide our users to continue to ease the contracting process.
After integrating with DocuSign at many customers, we’ve decided to formalize our relationship and establish a formal technology partnership. We’ve digitized the contract creation process from the beginning to the very end, sealing the deal with DocuSign’s eSignature and Digital Transaction (DTM) Platform. Our users can now enjoy the ease of contracting with Exari while using DocuSign’s secure, cloud-based platform for signing agreements instantly.
We can already see the value that DocuSign is adding for our customers. Now, users can accelerate their sales cycle and revenue error free, by eliminating the manual efforts of signature by being able to sign anytime, anywhere and on any device. This will not only increase customer satisfaction, but also keep you worry-free about contracts getting lost in the mail or being buried under piles of other documents.
To hear more about all of the benefits both Exari and DocuSign’s eSignature can offer your business, contact us now to discuss further or see a preview!
We recently discussed the new uncleared margin regulations (UMR) and best practices for successfully re-papering your Credit Support Annexes (CSA’s.) Now that you’re up to speed on what it means for your organization and the steps for re-papering, there is a bit more you should consider when evaluating each agreement. To get you the best advice we teamed-up with experts in this subject in order to bring you all the information you will need to successfully comply.
While adapting to these new regulations, complexity is going to be your greatest obstacle. You will have an increase in the amount of documents and data you need to manage, which means it will also be much more complex than previously creating or editing agreements. You will have to find a better way to manage the additional work required to support this intricate and time-bound project.
Depending upon which strategy you decide to adopt (or are forced to adopt by your counterparties) you may have to amend existing CSAs, create a duplicate to comply with the new regulations, or create a new CSA for the Counterparties (CPs) that want to renegotiate terms. Whichever strategy you end up with, managing the increasing number of agreements, and managing the legal and collateral terms is going to be a much greater burden for legal and operational departments.
In our upcoming webinar alongside Derivatives Risk Solutions (DRS), we will help you better understand the pros and cons of the strategies available to you, and how technology can help to ease the inevitable burden.
When: Tuesday, September 13th 10:00AM EDT / 3:00PM BST
*Can’t make it? That’s okay! Register now and receive a link to a recording once it’s completed.
The concept of contract management can get quite complex. There are many different contract-related challenges facing the modern enterprise, and they don’t affect all people the same way. The best way to get started is simple, yet highly effective – we call it the three O’s of contract management: Organize, Operationalize, and Optimize. You can move on to bigger challenges later, for example automation of contract drafting, approval workflows, and negotiation processes. But starting with the three O’s will give you a strong foundation on which to build:
1. Organize. Store all of your contracts in one place. Whether you keep them in a folder on your shared drive or somewhere in the cloud, the key is to identify major gaps and surprises (e.g. missing or expired contracts) and any major contractual risks that could expose you to unexpected losses or brand damage (e.g. uncapped liability, regulatory failures or rogue vendors).
2. Operationalize. Next, make sure the right people know about your contractual commitments and the commitments your suppliers have made to you. By extracting data about obligations and similar operational issues, you can share it, track it, and avoid the pain of poor compliance. This will mean fewer missed milestones, fewer pricing and payment errors, fewer disputes and fewer cost overruns.
3. Optimize. Finally, armed with better information about contractual risks, terms and process, you can make better decisions and streamline the way you do business. You’ll be able to find and eliminate bottlenecks in the contracting process, leverage past deals to drive better negotiation outcomes, and respond with confidence and speed during a crisis. Put simply, better contract insight will help you build a stronger, more valuable business.
Daunted by making changes in a large organization? Consider thinking globally, but acting locally. Your department or division is a great place to start your journey towards contract certainty and contracting excellence. It starts with better knowledge and insight. But as you grow and evolve, greater benefits emerge from automation and process improvement. It pays to think ahead and make a plan for where you want to go.
For more information about contract management, how it can benefit your organization, and additional resources please visit our contract management page to learn everything you need to know.
It was a beautiful afternoon in Boston as Chief Compliance Officers from the area convened to discuss the changing role of compliance at their financial services firms. The venue, Top of the Hub, is situated at the highest point in Boston – amazingly appropriate given the conversation quickly gravitated towards visibility and the difficulty of transforming ISDA Masters & CSA’s into data that can be more easily analyzed and operationalized.
Conversation was lively with several topics resonating with all participants. A significant theme of the conversation was around the changing role of compliance within the business. Compliance leaders are now asked to sit at the negotiation table with clients and have become a key member of the team. With the regulators playing a more resident role in corporations, compliance has become a more visible component of daily activities. There was a general theme that the integration of compliance into the business functions has also integrated the role of Chief Compliance Officer.
When speaking about ISDA Master Agreements, many felt that this was an area for ongoing automation and restructuring. Specifically, the harmonization of the ISDA-related data would reduce cost and risk for many firms. The advent of tools in this area is an opportunity for the teams to improve their process. The process of collecting the ISDA detail is very manual today. Once automated, however, this data would better enable companies to address questions regarding most favored nation clauses and other contract call outs.
The general consensus is that there are many regulations for the buy side firms to cover. It is easy for things to fall through the cracks as many companies cannot cover all regulations with a SME. The attendees discussed that the maturing of the processes was key to success, with several recommendations offered. Three of these suggestions included:
- lobby ISDA collectively to request more structure,
- designate key staff members to be SMEs in areas of greatest concern and,
- agree on a standard CSA
The attendees discussed how to best direct their limited resources, thus being a main concern. One recommendation was to provide incentives to the organization for meeting guidelines. A detailed conversation was held recommending teams to review the operations logs on a regular basis to spot check for any opportunities open for improvement.
Firms at the table had many different types of risk: fiduciary vs. deposit risk, while some companies were faced with both risks and answered to multiple regulatory bodies, that often had conflicting recommendation or reporting. Additionally, the impact of international regulation was discussed as an area of rapid change that is also causing workload on these teams.
Overall, there seemed to be consensus about ways to improve:
- Implement a central repository for all important agreements
- Capture key contract terms related to risk and compliance
- Provide proactive visibility for business users that quantify the indicators they find most valuable
The event ended strong with many of the participants exchanging cards and committing to continued sharing of best practices. Many thanks to the participants for such a lively discussion and to Exari for hosting an amazing event!