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.