Seven reasons to load your legacy contracts into a new Contract Lifecycle Management (CLM) system

Let’s say you missed a delivery deadline, or an early settlement discount, or an opportunity for a bonus - all of which were specified in the contract.  Any of these errors could hurt the bottom line in business.  Could you justify leaving money on the table, because someone in the organization was not aware of a contract clause?   Of course not!

Nevertheless, too many organizations still retain thousands of active contracts they cannot readily access or retrieve often because contracts are scattered in several locations.  And the danger of this risk remains invisible until it leads to an embarrassing loss. Not having the ability retrieve critical data from your contract documents can easily result in lost opportunity, value leakage and loss of revenues.

It’s so easy to avoid if you simply migrate contracts from ordinary storage - both paper and electronic - into a structured, searchable database that a new Contract Lifecycle Management (CLM) system can provide.  CLM allows all empowered staff concurrent access to leverage the contract attributes and optimize business advantage. The key benefit is the ability to get information quickly when you need it from your CLM database.

SEVEN BENEFITS OF MIGRATING

Accessing information successfully is vital to avoiding risks and taking advantage of opportunities for gaining revenue and controlling cost.  Normally, staff looking for contract information will go first to the online CLM but they can miss a vital contract provision if the contract is not uploaded and searchable in the database. That’s why all contracts should migrate and with today’s technology, it’s easier than you might think.

At one time storing data and retrieving it was difficult because every contract was different.  Obligations and language varied from contract to contract and the contract content too often did not fit into the computer formats easily.

But that changed when modern data extraction technologies emerged.  Data from dissimilar contracts can now be extracted and distilled into searchable files with 99.99% accuracy, a reliability factor never before reasonably achieved. These technologies, when married into a retrieval and migrating process, provide untold benefits to organizations that use a systematized structure of managing contracts.

Having a CLM in place is critical, but, again, it must contain all the essential contract data you need in an accessible format. Your present CLM might need updating to ensure you get the following benefits:

1. Single and unified repository
2. Insight into key provisions at fingertips
3. Compliance
4. Identification and mitigation of risks
5. Management Reporting
6. Access to all financials in one place from multiple concurrent locations
7. Better informed decisions

The first and foremost advantage of systematic management of contracts is obtaining visibility and access to all contracts in one single platform from multiple locations. This enables organizations to locate any contract in time of need with greatest ease when they need it. All contracts which up until now were scattered over different places within an organization finally find one common shelter with centralized access to all contract data from anywhere any department.

2 - Insight into key provisions at fingertips

As part of this process, contracts are first structured in a pre-defined pattern before they are uploaded onto a CLM. This structure involves mining key provisions from all contracts - which are put on a “short list” based on needs of the organizations and members referring to these systems. This enables users to gain insight into agreed upon provisions and obligations at their fingertips.

3 - Compliance

A contract consists of many commitments made by the parties to each other. Having key provisions shortlisted makes it relatively easy to satisfy compliance requirements quickly and efficiently. Being aware of contractual obligations is therefore a precursor to being compliant and essential for avoiding any losses. Also, contracts might require specific compliances, either to local laws or certain rules and by-laws, which may not form part of the usual contractual arrangement between parties. So because of the statutory significance these obligations have, non-compliance with them can invite grave consequences. Therefore, an efficient system of contract retrieval and migration enhances compliance awareness for specific statutory provisions.

4 - Identifying risks

With visibility and access over all contracts in one place comes the ability to identfy risks associated with non-compliance of any commitments made under a contract. All vulnerabilities are therefore tracked beforehand using advanced flagging options and so they can be acted upon accordingly for any required prevention or mitigation action. 

5 - Reporting

Another major advantage of this system is its ability to program triggers for actions that are critical to business and thereby require urgent attention. These triggers could vary from industry to industry, but some which are common to most include - upcoming renewals, milestones and other time-dependent actions. 

6 - Access to all financials under one roof

One of the most essential elements which invariably forms part of this structuring process is mining financial data from contracts. Unsurprisingly, revenues are often lost to industries simply because they are unaware of the exposures to loss, or to an opportunity for revenue. Proper mining therefore enables companies to recover monies that may otherwise be lost because of poor contract management. Having all the information in one location and being able to search and access it from multiple locations enables multiple departmental sharing, saving time and increasing productivity. 

7 - Better decisions

Being better informed through accessible, organized information means having the ability to make better informed decisions. Implicit in this is the benefit of being better able to manage to decisions if the information is complete and accessible. With complete information, you then have the opportunity to study and understand patterns, derive more accurate projections and forecasts that can ultimately lead and guide the organizations to better their decision-making processes and strategic initiatives.

Good business sense

Migrating all your contracts is essential if the risks are to be mitigated and the opportunities optimized. The legacy contracts hold essential attributes in the same way as the new contracts, and present the same opportunities for revenue, cost containment and risk management. Migrating your contract data from disparate physical locations and in different formats into a shared, structured data base where contract attributes can be searched, mined and reported on makes good business sense. The data itself is the food for the CLM and starving it means an exposure to unnecessary business risk and potential losses.

ABOUT OUR AUTHOR

Samir Bhatia, Founder of Brightleaf Solutions, is an experienced entrepreneur with a strong an extensive track record in client management, product management, sales and marketing, product development and operations.  His focus is on introduction and growth of technology businesses (products and services).  He has strong interest in working with companies intending to or having offshore (India) services/technology arm. 

ABOUT BRIGHTLEAF SOLUTIONS, INC.   

Brightleaf delivers Artificial Intelligence (AI) powered solutions for data extraction from contracts using their own proprietary semantic intelligence and natural language processing technology.  BrightLeaf uses internal software applications to extract and migrate legacy data into a Contract Lifecycle Management (CLM) system for tracking and reporting. Their broader scope of work involves customizing data for all types of contracts including all meta-data, terms and conditions, legal provisions, and obligations.  Extracted data-point are checked by legal teams against the original documents using a Six-Sigma quality process, which delivers highly accurate results

Brightleaf was voted one of the top five data mining companies, and the only one in the legal space.

FOR MORE INFORMATION, CONTACT

Daniel Berdichevsky,

Brightleaf Solutions, Inc.

(888) 489 - 1800 x627 dberdichevsky@brightleaf.com

END NOTE:

1. This article is an edited version of the original piece titled 7 Reasons to Load Your Legacy Contracts into a New Contract Lifecycle Management System has Copyright © 2017 by Brightleaf Solutions, Inc. Brightleaf and the tri-page leaf logo are trademarks of Brightleaf Solutions, Inc. Other marks are the property of their respective owners. 

Related articles by BrightLeaf:

• Strategy brief: Stepping Stones to Successful Implementation of a Contract Lifecycle Management System (CLS)
• Steps and Best Practices for Legacy Contract Management & Migration

Webinar:  Samir recently pesented a webinar titled IACCM Webinar - pulling key data from legacy agreements.