Following on from part 1 of Thomas Kase’s article on Seal Contract Discovery, part 2 takes a look at more examples of the application of this unique technology. Whether it’s a straight discovery exercise, an audit, due diligence or to locate, identify and abstract contract metadata in order to populate a contract management system, Seal has it covered. Read part 2 below (catch up on part 1 here):
We recently met with Thomas Kase, Principal Analyst at Spend Matters, a respected online source of information around supply management and procurement, and were able to brief them on Seal’s Contract Discovery solution. We were rather pleased with Thomas’ objective write up – read part 1 of his article below (part 2 coming soon):
Increasingly complex compliance requirements, strict industry regulation and multi-jurisdictional legislation are driving the need for corporate legal departments to extract an expanding array of key information from large numbers of contracts – Contract Abstraction.
Many corporate legal departments lack the necessary tools, resources and time to undertake such an exercise themselves, so are increasingly driven to outsource these tasks to Legal Process Outsource (LPO) providers. But how do they achieve the end result sought? LPOs typically employ low cost, off-shore resource to undertake the process manually. Allowing sensitive documents off-site is not something many are keen to consider, nor does the process actually happen any quicker.
The business need for an on-premise, technology-driven, automated solution has long been recognised; until now it has not existed.
Introducing Contract Discovery
Before contracts can be managed, the key terms and milestones, or metadata, contained within them must first be identified and understood. And even before this, there is another critical step – Contract Discovery. You cannot manage what you don’t know about.
Most organisations, when undertaking a Contract Discovery project, soon realise that they have far more contracts than they first thought. Finding these manually means a laborious, time consuming and costly exercise; first, checking each document to see if it is contractual in nature; second, abstracting key contract metadata.
Contract Discovery (cDiscovery) automates both the contract location process, searching multiple locations, and metadata abstraction. This all takes place from within the organisation; there’s no need to send electronic or paper documents offsite for processing, with the inherent security risks.
By processing automatically, on premise, this significantly improves the speed, accuracy and efficiency of Contract Abstraction. Abstracted data is made available as it is processed, without the delay necessarily associated with off-site processing. This rapid availability can be critical in time sensitive environments, such as Merger and Acquisition.
Through the use of Contract Discovery and Abstraction technology, the benefits of automation are quickly realised, and are repeatable:
- Fast, automated, predictable levels of performance
- Reduce impact and delays caused by human error
- Repeatable, small changes processed immediately
- Provides comprehensive, searchable database of contracts
- Optionally populate corporate Contract Lifecycle Management Platform
- Highly scalable to meet demand, driven by data volume and a compressed timeframe
- Increase Return on Investment (RoI) with repeated abstraction iterations
Seal Contract Discovery and Contract Abstraction provide the first solution to automate such processes. Find out more at the Seal website: www.seal-software.com
Partnerships have been around a long time. Two people working together to achieve something that, alone, neither of them could – perhaps something as simple as lifting and moving a heavy object. Scaling this up, two villages, towns, or even two countries getting together, can achieve something they couldn’t do alone, such as defending their borders.
The same is very true for companies. Perhaps they could go it alone and achieve their goals over time, but do they have the appetite to wait? For many, the answer is no, and so identifying another organisation that has complementary skills, knowledge or a market presence is an extremely attractive prospect.
At Seal we recognise that there are many complementary areas to our core strengths around contract management and contract discovery, but do we have all the expertise in house? Of course not, and we’re the first to admit it.
So that’s why we partner, where together we can achieve more than if we go it alone. We recently announced two partnerships that are classic examples of how two companies can achieve more together. Nuix are experts in eDiscovery, electronic investigation and information governance technology. Bringing Nuix and Seal together enables organisations, lawyers and advisory firms to gain better business insights and take control of their contracts. The partnership delivers a complete, scalable contract discovery solution, deployable in as little as one day – the expertise is built in. Read the full announcement here.
LexisNexis are a leading global provider of content and technology solutions that enable professionals in legal, corporate, tax, government, academic and non-profit organisations to make informed decisions and achieve better business outcomes. The Lexis Contract Finder service, powered by the automated search engine of Seal Contract Discovery, makes it easy for organisations to quickly locate, categorise and manage all their contracts. LexisNexis provide additional services including scanning and digitisation of paper contracts, thus enabling legal teams to digitise and manage their entire contract universe. The Contract Finder service helps make managing contract risk more efficient for legal teams and their commercial colleagues. Read the full announcement here.
For us, the relationship we have with our customers is yet another prime example of effective partnerships – we need customers, that’s a given, and our customers need solutions to their business challenges. Together we achieve our goals through partnership.
The following article was recently published in Business Computing World Magazine: http://tinyurl.com/3hvke4y
We may not realise it, but contracts help to drive and shape pretty much every business: Gartner estimates that between 60-80 per cent of all business transactions are governed by contracts or agreements in one form or another, particularly across finance, IT, legal dept, purchasing, sales, operations and HR. So, whether we are aware of it or not, contractual agreements are an important part of organisation’s underpinning structure.
And contracts aren’t just about ‘laying down the law’ with third parties and employees: on a more positive note, they provide the framework for how we work with people and other organisations, they provide the rules and guidelines for obligations so that everyone should be clear what is expected of them. And when managed properly, contracts can even help organisations to reduce costs and improve profitability, as well of course as mitigating risk.
So if contract management is so important, why hasn’t everyone been doing it for years? The problem is that traditionally, most contracts are created by individuals or departments, with no single central ownership or control. Forrester Research reckons that contracts take 3.4 weeks to create on average – not surprisingly, considering that they so often rely on unwieldy email communications or in many cases, snail mail and fax. The legal or procurement function will probably only get involved if a non-standard requirement or problem arises.
Once created, contracts are stored in multiple locations and formats – electronic and paper-based- making them hard to centralize and find again. Faulker estimates that 10 per cent of all contracts are actually lost.
Does this matter? Yes, because lack of cohesive contract management can lead to problems and missed opportunities. Here are some examples: automatic renewal of contracts can mean being tied into unwanted contracts; lack of foresight meaning that the chance to re-negotiate better terms were lost; lack of compliance or regulatory breaches, not to mention expensive litigation. Indeed, Fulbright & Jarowski has estimated that 60 per cent of corporate litigation in the USA and UK is caused by contract breaches.
Get it right and contract management has multiple benefits. Again, some examples help to demonstrate this: observing an early repayment clause leading to a discount; enterprise-wide favourable terms with the same supplier; only paying invoices on goods and services actually received.
Yet this situation is changing fast, as companies increasingly realise the importance of management contracts, as well as the advent of contract lifecycle management systems, a market sector that Forrester Research says is growing at 23 per cent per annum. Numerous vendors have now entered the fray, with systems on offer that range from simple cloud-based sytems for SMEs through to large solutions based on Microsoft SharePoint, which now adopted – or in the process of being adopted – by over 90% of large organizations worldwide.
Different vendors (and there are quite a few now) offer different feature sets, but a comprehensive solution might include: A contract clause tracker; compliance monitoring & regulatory requirements; automated alerts; tracking of price rebates; reporting; contract negotiation workspaces; workflow and reporting tools; author workspaces; contract drafting and storage; tools that support collaboration on contract with external parties.
The latest generation of contract lifecycle management systems also include e-discovery of legacy contracts. This is an important point, because while it is tempting to rush into implementing a contract lifecycle management system for all new contracts, unless existing contractual milestones and obligations are included, then an organization does not have the full picture.
Research shows that around 80% of companies admit to not having full knowledge of all their legacy contracts, yet considering that contracts many last for many years, then it is reasonable to assume that a large organization will have thousands of legacy documents. (I’ve recently helped a media organisation audit 30,000 contracts and their situation is certainly not unusual).
Who owns contracts? The organizational split
All well and good, but who owns all this stuff? Well, as I said earlier, contracts are traditionally very dispersed throughout an organization. However, the advent of contract management systems gives companies the means by which to remedy this and in theory, to everyone’s benefit. What do I mean? Well, if you were in charge of all legal affairs – perhaps you have the title of company secretary or general counsel – you’d be able to see the advantages of having overall visibility of all contractual obligations. After all, it’s your job. But you’d probably be worried about opening the floodgates.
The benefit of a contract lifecycle management system is that it allows individuals to still retain control over creation of a contract, as well as management of resulting milestones and obligations. But you, as the legal professional, would be able to keep track of status and through system alerts, be made aware of any impending problems. For instance, a particularly enthusiastic sales person may be able to agree to terms that are not appropriate.
Similarly, if you are the sales person (or the procurement officer, or the IT director, or the HR manager) you can see the commercial and performance benefits of contract management, but aren’t too happy about the idea of losing control to the legal department. Again, contract management lifecycle systems mean that you are still in charge of creating the contract, but you know the legal expertise is on hand if required.
Let’s also not forget the fact that many organizations spend huge amounts of money with third party legal firms. By automating much of the contract creation process – for instance, standard clauses and templates – then this area of expenditure can potentially be reduced.
So what should companies be looking out for when implementing contract management and looking for a system that fits their needs? Here are a couple of ‘best practice’ suggestions:
- Find out what already exists – without full visibility of all existing contracts, then implementing any contract management system is only addressing part of the picture. Invest in a contract audit or choose a system that has an e-discovery element that can automatically locate legacy contracts and extract milestone and obligation data.
- Assign roles and responsibilities – technology can only do so much. Since contracts have rarely had a single point of overall ownership, this is uncharted territory for many organisations. Regardless of where they sit in the organisation, the best contract gatekeepers are people who understand that contract negotiation is a ‘people’ process. Get these champions on board and think about creating cross-function working groups to help facilitate the adoption of contract management across the organisation. After all, contract management processes and systems are going to touch on most departments in one way or another.
- Find a system that suits your organisation – if you are a small one-man band, then a simple cloud-based system will probably fit your needs. But if you have potentially thousands of contracts stored in multiple formats, locations and systems, then obviously you need a system that will scale, but ideally one that will sit on top of existing IT infrastructure, rather than adding an additional level of complexity or investment. For instance, if you are using Microsoft SharePoint, then there are various SharePoint-based contract management solutions now available. Also consider the usability of the system for staff without legal or IT expertise: are there management dashboards that are easy to use? What about reporting tools? Can the system link with existing organisational KPIs? Will it integrate with other systems?
Is Microsoft SharePoint ready for mission critical business applications, like Contract Lifecycle Management?February 15, 2011
A recent market survey published by Global 360, entitled: How are businesses using Microsoft SharePoint in the Enterprise, highlights the significant strides that Microsoft SharePoint has taken in the last year in terms of enterprise adoption.
The Global 360 survey polled over 800 companies in 2010. Here are some of the key highlights:
- 90% – organizations surveyed have and use SharePoint
- 97% – organizations who will look to deploy SharePoint
- 67% – have deployed SharePoint enterprise wide
The phenominal growth and adoption of SharePoint in the enterprise is truly disruptive to traditional ECM and collaborative incumbent technology solutions. Of the 3% of organizations who were not currently looking to deploy SharePoint, most companies admitted that they would be considering SharePoint at some stage in the future.
The table below shows how Microsoft SharePoint is currently being deployed amongst the organizations surveyed:
|How widespread is the deployment and usage of Microsoft SharePoint in your organization?|
|Use within team or single SharePoint project site||4.94%|
|Limited SharePoint sites or department use (1-3)||11.03%|
|Several departments (4 or more)||16.98%|
|Enterprise-wide deployment of SharePoint||67.98%|
With market saturation within reach, the big question for CIOs must be: Is Microsoft SharePoint mature enough as a platform to deliver enterprise applications?
The Global 360 survey would suggest that this is rapidly becoming the opinion of SharePoint users. Here is a summary of some of the key findings about how SharePoint is being used within the enterprise:
- 67% – organizations using SharePoint for enterprise Document Management & Workflow
- 27% – organizations who use SharePoint to support mission critical business processes
So, nearly one third of SharePoint users now deploy SharePoint to manage mission critical content and to support key business processes.
CIOs and IT strategists must now seriously consider business applications built on top of the Microsoft SharePoint platform that support critical business processes and compare the pros and cons against other enterprise platform solutions from SAP, Oracle or even .Net and Java based applications.
There is one significant fly in the ointment as far as SharePoint in the enterprise is concerned, however. 51% of companies surveyed complained that too much time and internal resources were being tied up trying to develop point and line of business solutions in SharePoint.
This is precisely where independent software vendors like Dolphin Software can help organizations and add value to SharePoint environments where it is most needed. Most organizations do not, and should not, consider themselves to be software development houses. Microsoft SharePoint has matured to an extent that it is now a viable platform for delivering robust business applications, but it should be considered as such – a platform.
Dolphin Software would consider itself first and foremost as a best-in-class Contract Management software vendor that uses the Microsoft SharePoint platform as a delivery mechanism to its business users. This has several advantages for Dolphin’s customers. From a CIO’s perspective, a comprehensive SharePoint based business application, like a contract lifecycle management solution, is a compelling example of how SharePoint can add value in a business context. From the business user’s perspective, a SharePoint based business application should be familiar and easy to use and therefore easier to deploy to enterprise users.
For further information about deploying mission critical business applications, like Contract Lifecycle Management on the Microsoft SharePoint platform, visit: www.dolphin-software.com
Contracts govern the way that companies conduct business relationships with each other. As business becomes more international, contracts and agreements become more complex – with terms, conditions, milestones and obligations to keep track of and manage. Unfortunately, for many companies, the contracting process leaves a lot to be desired, increasing the chance of missed commercial opportunities, costly penalties for non-performance or missed obligations. Try answering some of these questions for example:
- Do you know where the latest versions of your key contract templates are?
- Have you ever cut and pasted terminology from previously authored contracts?
- Do you use email as the mechanism to review draft contracts with colleagues?
- Do you save all contract documents in a secure, version controlled repository?
- Do you receive alerts and reports when key milestones and obligations are due?
- Are you able to guarantee that all contract milestones and tasks have been complied with?
Dolphin Contract Manager is the world’s leading Contract Management solution for Microsoft SharePoint environments.
This SharePoint-based solution means that your IT team can use the same SharePoint infrastructure to provide enterprise-wide contract management capabilities. Because Dolphin Contract Manager is SharePoint-based, your business users will also find its user interface and menu systems instantly attractive and familiar, reducing the need for end user training.
Register here for this complimentary web seminar to learn more about how Dolphin Software can help you make the most of your investment in Microsoft SharePoint and automate and control your contracting processes. Register now or contact us for a personal demonstration.