Category: Contract Management
Have you ever experienced a failed deployment of contract management software? At Exari we have talked to hundreds of people about what has worked and what has not worked for them. The most common topic that comes up in these discussions is centered around data. Until now it has been cost-prohibitive and time-consuming to represent contracts as data. After all, contracts are intentionally designed to be wordy, dense, and in many cases confusing. Instead, most firms have settled with treating their contracts as valuable documents that can be referred to if trouble ever cropped up. It’s true that contracts are some of the most meticulously crafted documents written, yet over and over contract management software deployments have failed.
The number one reason that enterprise contract management software fails is due to a lack of data. The hallmark of every enterprise-class platform is accurate, complete & accessible data. It’s data that’s used to provide analytical insight into trends and problems, it’s data that’s used to make operational decisions, and it’s data that is used to inform upstream and downstream systems with critical information. Governance, risk and compliance all require access to high quality data and until now this was not available for contracts that underpin a business.
Larger companies and organizations are realizing that in order to properly operate their business, they need an enterprise level view, involving nearly every department. This is driven by increased regulatory requirements, changes in how revenue is recognized, and the constant improvement and developments of technology that can meet all departmental needs. If you are looking to implement a system, three things enterprise contract management platforms must have that you should look for are:
- One platform that is designed for everyone who cares or works with contracts including procurement, sales operations, legal, risk & compliance, finance, HR, the executive team and the board.
- One platform designed for modular implementation, that delivers a fast path to success and enterprise-wide adoption and complete visibility
- One platform designed as the golden source for contract data and documents, with seamless integration to other enterprise systems
The data that lives within your contracts is your true golden source, either helping you track your risk to properly manage and make better-informed decisions in a crisis, or infect you with risk, such as fines or cause for termination. A true enterprise contract management system should be able to transform your contracts underlying text into actionable and reportable data. Data that you can track, analyze and constantly monitor instantly, whenever you so please.
Today, Exari announced the latest release of its product, version 7.1. It not only provides everything discussed above that an enterprise-class platform should consist of, but it is also the first (and currently only) CLM platform with an enterprise-class Universal Contract Model™.
The Universal Contract Model™ is the most robust data model, allowing complete representation of any type of contract. This delivers prevailing terms for every contract, rolling up terms with their amendments and changes over time. Our Universal Contract Model™ allows companies to have complete, unprecedented visibility into every contract throughout the entire enterprise. This is the secret weapon to a true, enterprise contract management platform, and the number one reason why Exari customers succeed.
If you are interested in learning more about Exari’s version 7.1 you can read through the press release here. To discuss how our enterprise-class contract management platform can help you succeed, please contact us here now.
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/
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.
Do DNS attacks mean you should have a backup plan?
Last week, DNS attacks leveled key gateways leading to dozens of outages amongst business applications. For so many companies who have become dependent on SaaS applications or cloud-based services it was a scary event that at a minimum led to a loss of productivity.
Do DNS attacks qualify as a disaster?
They can. There is no guarantee that a provider can get back up quickly. Many of our competitors tout they are “cloud only” and bragging that on-premise software is dead and buried.
We offer a web-based solution, but allow customers to deploy in their private cloud, the public cloud or on-premise. In the event of a disaster, our customers can re-deploy their applications and recover their data to a protected, in-house offering. Sure, it’s not immediate but it beats never knowing if you can get back up and running.
Make sure you protect your contracts. The Cloud is great, but without a backup option you won’t end up with sunny skies.
To find out more about how you can protect your contracts with Exari, click here.
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!
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.
Business as usual is no longer an option for banks.
With the new margin requirements for uncleared derivatives, it’s time for banks to buckle down and revise existing, or re-paper their CSAs to be compliant. These regulations are meant to promote central clearing and reduce the risks associated with trading. In an attempt to avoid
a financial crisis another financial crisis the regulators are making sure there are more stringent rules around how much collateral has to be posted, who holds it, and how it is managed.. They’ve increased the threshold for uncleared swaps as well as the types of assets that are eligible as collateral for variation margin (VM). Furthermore, non-cash assets that qualify as initial margin (IM) can qualify as VM in trades depending on the counterparties.
Per regulation, all Credit Support Annexes have to be revised or re-papered by the deadline, March 2017. Banks now have to start re-papering all their complex agreements in order to continue trading- business as usual. This task will be time consuming and will probably involve heavy negotiations with counterparties, but can be greatly accelerated with technology to help with the re-papering process
Have you been putting this off? If you estimate that this is going to be a complicated and time consuming task, (you’re right), but delaying the process will reduce the time you have to negotiate and finalize your CSA’s. If you don’t have the manpower to handle this task, there are options:
- You could outsource this work
- You could hire a third party firm that will take it off your hands, or
- You could automate the process with a little help from a purpose-built solution
The good news is you still have options. If you’re interested in learning more about what would work best for your firm, here are a few resources for you to consider:
- A software solution that supports document automation, outreach, workflow and negotiation. Learn more about Contract Lifecycle Management
- More information on the regulation and best practices
- Third party organizations that can help: Deloitte, Accenture, and BNY Mellon
Have a look and think it through, but keep in mind the clock keeps ticking and before you know it, it will be March.
Click the link to learn more about our re-papering solution.
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.
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
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.