Reflections on IACCM – Part 3: CLM Use Cases
In the final installment of this three-part blog series, I’ll share a handful of the more interesting use cases I’ve observed in enterprises implementing contract management solutions. While the first two posts focus on CLM adoption and the impact of AI, this piece focuses on what successful implementation looks like.
Implementing a Contract Management Solution that Spans Beyond the Legal Department
Use cases differ among verticals, but nearly all have automation as a common denominator and focus on leveraging the power of AI to ensure the optimal outcome. In my interactions with various enterprise leaders across verticals, I’ve come across many interesting use cases where businesses want to automate and use AI for deeper insights to facilitate decision making. Below you’ll find a few of these examples (company names withheld in the interest of confidentiality):
a) A Leading System Integrator and IT Services Provider ($4B+ in Revenue):
The biggest business challenge the CFO wanted to address was for project managers to understand the negative business impact of extra resource commitments or delayed project margin. As a result, the primary ask was for real-time integration and workflow views for the project managers so they can have a holistic view of the status of their ongoing IT projects and the deliverables committed in the original contract. Additionally, there was a need for integration between the contract management solution and their project management solution given that the original contract contains the agreed-upon timelines and resource commitment. Another request was for real-time analytics that provide project managers with a ‘what if’ analysis of a project’s profitability if they decide to take on more work with no additional cost or add more resources to the project.
Consider this situation: some contracts have provisions for bonus payout if the work can be completed earlier than anticipated. However, if the project managers are unaware because they do not have a real-time view of the agreed-upon contract, money is lost. Having a holistic view of contracts leveraging that information by way of an integration with other important information systems minimizes negative business impact.
b) A Top 5 Player in Infrastructure Creation and Commercial Construction ($20B in Revenue):
As part of a large conglomerate, the CIO’s primary ask centered around leveraging advances in Natural Language Processing (NLP) to help process RFPs and RFIs faster than the competition, especially for the Government of India issued contracts worth billions of rupees. The challenge of responding to such detailed RFPs (some upwards of hundreds of pages) was that the devil is in the detail – clauses with penalties or in the nature of indemnity clause. To go through these wordy RFPs, businesses often spend a significant effort and staff temporary paralegals to distill the critical pointers, specifically financial terms and qualification criteria.
The CIO noticed that some competitors were able to submit well-researched bids significantly faster as a result of adopting NLP in their processes. This realization piqued his interest in leveraging AI to search the existing database of past contracts and bids as a way to intelligently forecast the chances of winning similar business and predict the right price to submit the bid. This use case uses AI to drive overall business effectiveness and higher win rates against the competition by leveraging information from different sources, including contract management. Thus, it is important to recognize that modern-day contract management solutions address business needs beyond just those of legal.
c) A Large Global Consulting Firm:
The heightened scrutiny from government and regulatory bodies because of high profile instances of fraud in Corporate India, particularly in financial services, fueled a large consulting firm’s need for complete integration between its in-house software and contact management process. The firm required 100% compliance for onboarding new customers for any service, management consulting or audit, which requires thorough checks in terms of KYC (Know Your Customer) and AML (Anti-Money Laundering) and credit worthiness coupled with internal approvals. If any of the checks return negative, the process of onboarding is halted and cannot be re-initiated without executive approval. Given the requirements, the ideal solution should also be able to pre-populate a majority of the forms and templates without requiring human intervention to avoid the potential for human error and mitigate the chances of fraudulent information or incorrect information.
The moral of the story is that the contract management solution is not just for legal consumption as it offers benefits for the entire business. Failure to keep this in mind when evaluating enterprise contract management software can lead to failed implementation, significant rework, and vendor re-selection.
At Apttus, we don’t sell solutions. Rather, we partner with enterprise businesses and enhance the ROI in their middle office operations so that our customers can be market leaders. It’s why our enterprise business customers love us and renew their business with us year after year.