Category: Contract Lifecycle Management Software

Why Prehistoric Contract Management Solutions Have Failed at Adoption

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.

9.thumbnailZack Bliss is Exari’s Inside Sales Representative. Reach out in the comments below.
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Beyond Compliance: Moving towards an Enterprise Level View of Risk

This week, DerivSource interviewed Alexandre Bon, Senior Solution Architect at Murex, to discuss the growing needs of an Enterprise View of Data in Financial Service firms. He explains how it is essential in order to comply with both the FRTB and SA-CCR requirements, as firms need full visibility into client and trade data. By concluding Bon’s Q&A, here are the important steps you need to be aware of and follow in order to better comply with these regulations.

1. Improving communication between all departments will build a better enterprise view of risk and capital

By bringing departments together with full transparency into all information, regulation-related strategic decisions can be more efficiently built out. For example, by bringing together the credit, collateral management, treasury and trading departments, will link together how collateral management operates and how trading desks will price the effect collateralization of new transactions. In return, this will provide traders with the information they need to efficiently evaluate which entity they should execute a trade with.

Bon stresses the importance of full transparency into all data at an enterprise level view. Banks need to move to a real time view of their regulatory capital positions in order to properly comply with the FRTB.

2. The SA-CCR has an implementation deadline for many firms

The new standardized approach is scheduled to take effect January 1, 2017. This includes a comprehensive approach for measuring counterparty credit risk associated with OTC derivatives, exchange-traded derivatives and long settled transactions. For more information on what you need to consider in order to comply, you can find it here.

Since a deadline is quickly approaching, more and more firms are beginning to put budgets into place to either build their own system or evaluating enterprise solutions for adoption (take a read through our Build vs. Buy whitepaper for more information).

3. How to integrate departments and getting over that initial challenge “hump”

Integrating departments can be extremely difficult, as further discussed by Bon. It’s no surprise that he mentions the challenges that firms will face, such as how they all operate and run differently, their data sets are incompatible or out date or can be duplicated with inconsistencies. The worst of it- they have no central data repository. He mentions that some firms have built their own regulatory reporting systems on top of data warehouses, but they just don’t cut it.

Implementing a central data repository to allow for full visibility into all data and reporting for every department is essential. It will help establish clear data management processes for maintaining clear, consistent data across the entire enterprise. By moving toward an enterprise view, the information can be used to rationalize processes, understand which businesses are most profitable, and divest those that are not.

Firms will not only be in compliance, but looking further ahead they can develop enterprise-level risk tools for analyzing positions and capital data in a much more efficient way. Banks need to adopt a more innovative approach for dealing with the high cost of regulations, such as managing the total cost of trading. An Enterprise Contract Management System is just that approach.

To learn more about how an enterprise contract management system can help you reduce your firm’s risk, download our Contract Risk Playbook: Risks Hiding in Plain View, an advanced guide for corporate boards and senior executives today.

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DerivSource is an independent information source and online community for OTC derivatives professionals globally, with a community of over 15,000 members globally.  


*DerivSource, SA0CCR and FRTB: Compliance Drives Renewed Push for Enterprise Data Management. 2016. http://derivsource.com/articles/sa-ccr-and-frtb-compliance-drives-renewed-push-enterprise-data-management-0

The Changing Role of Compliance within Financial Services Firms

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:

  1. lobby ISDA collectively to request more structure,
  2. designate key staff members to be SMEs in areas of greatest concern and,
  3. 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:

  1. Implement a central repository for all important agreements
  2. Capture key contract terms related to risk and compliance
  3. 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!

9.thumbnail Patricia Flynn is a Compliance/Big Data Consultant. Reach out in the comments or on her Linkedin .

Risk Management Without Contract Certainty is Dangerous

According to The National Contract Management Association, 81% of members reported that finding their contracts was a major concern. Think about your own experience – have you ever needed to look into the details of a contract and couldn’t find the right agreement?  For a small number of contracts this could be considered sloppy, but for more it’s dangerous and frankly puts your firm at risk of being blindsided at the worst possible moment.

Contracts are one of the most effective tools for managing risk, because they have legal teeth.  Chances are your company is pretty good at drafting and negotiating contracts to protect your interests while still moving business forward, but what happens once the ink has dried?  Do you have an effective system for capturing and storing the information within the contract?  If you’re like most companies there’s a good chance you fall short.  The most progressive firms we see simply store contracts on a central file share and add a spreadsheet with basic metadata.

If your firm is serious about risk management then finding effective ways to manage and deeply understand your contracts is essential.  It means taking a fresh approach to contracts and transforming them from documents into data.  If you’re not managing your contracts properly you’re bound to face some unwanted surprises. Surprises that might cost your firm millions of dollars, or worse, your job! This is why you need a plan in place for when a crisis emerges.

If you think your firm can do a better job at risk and contract management, you’re right!  The first step is to implement a universal data model for all your contracts and then consistently populate that database for every new contract. This uniform and data-centric approach will provide your firm with real-time information about the risks, obligations and exposures your company has to a counterparty. This is just the first step to managing your contract data successfully in order to reduce the risk in your firm.

Here’s an action checklist you can follow to get you started:

  • Review the ways in which contracts are tracked on a company wide basis, and the policies and procedures in place to use that data to hedge against and mitigate risks.
  • Review the status of contracts, including any risk concentrations and interrelationships, as well as the likelihood of occurrence and potential risk.
  • Design contract risk management policies and procedures that are coordinated and function as directed.
  • Implement these strategies in a timely manner.
  • Send a message to management that comprehensive contract management is an integral component of the firm’s strategy and business operations.

To learn new approaches that will provide you with real-time visibility, such as assessing your current situation to track interrelated risks and identifying the steps you need to take for implementing an internal risk management campaign, check out the New Contract Risk Playbook. Its an advanced guide for Corporate Boards and Senior Executives on how they can take an enterprise view on managing their contractual risk, which will improve operational excellence while reducing risk.

9.thumbnailMike Maziarz is Exari’s Chief Marketing Officer. Reach out in the comments or @mikemaziarz.

An Industry Game Changer: Exari’s Universal Contract Data Model for the Win

Even after eight years since the financial crisis, we are still seeing firms continue to recover and take critical steps to put strategies in place for improvement. Firms are focusing on reducing their costs, while increasing their ability to respond to the changing regulations around ensuring financial health.

In particular, our largest global financial institutions are required to implement Living Wills with Recovery and Resolution Plans to ensure visibility under extreme financial or market pressures, and worst case, regulatory plans should the institution actually fail.  While today we see how this only impacts the defined Global 20, it’s critical for these and other institutions to understand their contractual obligations and risks under all scenarios.  The work to gain this understanding and visibility can be complex, time consuming, and costly.

Additionally, firms are having to respond to changes in the reporting of OTC derivatives going into effect this year.  In fact, one of my global clients is looking at ways to unwind their current contract data to parse out the required details for measurement, reporting and re-papering of OTC derivatives alone. It’s a big job for many of our clients that is just getting started.

However, the well considered and industry-tested Universal Data Model delivered by Exari will significantly accelerate these institution’s view into their risks and minimize costs to analyze and respond. Assets Managers can easily reduce the time it takes to capture and analyze trading agreements, IMA’s, CSA’s and side letters from months to just hours. The Model is already enable our customers, like the one mentioned earlier, to significantly save time and money by managing this in house, rather than relying on outside legal resources.

The Exari Universal Contract Data Model for Financial Services is a game changer and is already being adopted by the industry leaders who want to accelerate the compliance process, minimize risks, and keep costs under control.

For more information on how Exari’s Contract Data Model, please visit our products page

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Allison Cusano is Exari’s VP of Financial Services. Reach out in the comments or @allicusano.

Why your Contract Data is Putting your Company at Risk

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.

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Bill Hewitt is Exari’s CEO. Reach out in the comments or @billhewittCEO.

Out With The Old

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”?

Why Everyone Should Stress-Test (Not Just Big Banks)

“You’re wanted upstairs.  Now.  As in, immediately.”

There’s nothing quite like these words to kick off a relaxing day at the office.  You head up to the executive suite wondering what fire-drill, or firing offense, awaits.

As you walk in, the Wall Street Journal flies across the room and lands at your feet.

“Our biggest back office vendor has been hacked.  It’s a disaster.  Apparently it happened a week ago.  So why am I finding out about this in the Journal?  What’s our legal position?”

You pause.  You think.  Where is the contract?  Did I negotiate that one?  Was there an obligation on them to report incidents like this as soon as they occurred?  What’s our obligation to notify affected customers?  How much time have we got?  What if the vendor goes under?  Can we terminate and switch vendors?  Or was this exclusive?  Can they hide behind capped liability?

So many questions.  So little time.  So many angry executives.

What happens next depends in large part on how well you stress-tested your contracts before an event like this.  If you planned ahead and created a trusted source of operational contract data, you can probably answer many of these questions quickly and with confidence.  If you did nothing to prepare, you will likely spend the day (or the week) running around like a headless chicken, looking for contracts, scrambling through paperwork, and wondering how to say “I don’t know” without sounding like an idiot.

And this is just one stressful event.

There can and will be many others: corruption scandal, currency crisis, regulatory investigation, product recall, patent litigation, credit crunch, and more.

But don’t stress out.  Stress test.  Get ahead of the problem.  If you stress test ahead of time, you can fix the weak links.  If you wait for a crisis, it’s too late.

Join us for a free webinar on Thursday, October 29th at 11am EDT to find out how to best prepare for a crisis and protect your company and your job. Click here to register or to learn more.

Jamie Wodetzki is Exari’s Co- Founder & Chief Product Officer. Reach out in the comments or @wodetzki

Contract Certainty: It’s What We Do

Ask most 7-year-olds what they want to be when they grow up and you’ll get the usual mix of astronauts, firemen, doctors, policemen and nurses. You won’t get too many that proclaim a desire to work with contracts, let alone in the Contract Lifecycle Management space.
At Exari we’re obsessed with contract certainty. While that often means our initial spiel in response to the dinner party classic, “What do you do?” may not be the most exciting,* it does mean that we live, breath and think about contracts. We know what the traps and risks are, we understand the quirks, exceptions and opportunities for improvement. Sound exciting? Maybe not, but we love solving large, ugly contract problems.
The sorts of problems we often see and tackle are:
  • Deep conditionality and complex business flows. Many of our clients think their contracts are in good shape and straightforward until they dig deeper and get better insight into how their documents are actually drafted, negotiated and approved.
  • General document quirks. When automating documents everything becomes a lot more dynamic. What was a simple list, cross-reference or numbering scheme now needs to handle a variety of different conditional possibilities.
  • Handling counter party paper. Even when you have your creation and management processes under control, eventually you’ll hit agreements that were not drafted your way or using your terms.

With the right tools these very tough problems disappear. And when they disappear, contracting and business processes improve and require less money and time making lawyers, business-people and clients alike very happy. Exari Hub gets you organised and on the road to understanding your contracts and negotiating processes. Exari Contracts takes the next step and allows you to control everything from creation right through to signature and archive. Come learn what we mean by contract certainty and why we’re pretty happy with what we became when we grew up.

*Editor’s note: This statement has some notable exceptions; automating contracts ultimately lowers the costs of legal work for clients making it more accessible. In a world where the average consumer or small business may struggle to afford necessary legal work, we believe that any measure that reduces the cost of access to the law is a noble pursuit. How’s that for a dinner party spiel?

I’d love to hear from you at @liptonj or leave a note in the comments.

Justin Lipton is CTO and Co-Founder at Exari.

Webinar: How To Convince Your CEO You Need CLM

You know you need contract management software. As Gartner reported recently, “CLM Is Moving From ‘Nice to Have’ to ‘Need to Have.’” But how to convince your boss?

Many good contract management initiatives never get off the ground because the CEO isn’t on board. To convince them, you need to pitch your business case in terms of solving an urgent problem and delivering measurable results. Easier said than done, right? 

We’ve been doing this a long time. Before you set about planning an internal project to determine ROI, you have to know how to convert your CEO. We’re teaming up with the ultimate contract experts at IACCM to offer a free webinar to explain the best way to argue your case for contract management ROI. Because you don’t want your CEO to simply be on board – you want an internal champion to see your contract management solutions through to completion.

To listen to the discussion, join us for the webinar on September 9th, 2015. Click here to register, to sign up to receive the recording, or to learn more.