By GORDON SKALJAK – Global Head of Marketing
Contract Lifecycle Management and Big Data – Where’s the value?
Copyright Deepika Shukla
It never ceases to amaze me how many organizations talk about ‘Value’ and ‘Big Data’ and often claim being able to increase ROI – but most of them rarely ever even attempt to attach a real number to those claims. Nowadays it is so easy to ‘preach’ but very few actually ‘practice what they preach’.
Typical examples are business contracts and how they are managed in the corporate world. Starting from small / medium to very large organizations, most would say that they have some sort of contract management system or even a process, but very few would be able to locate them all, or with any speed. Even fewer organizations that talk about Big Data would know how to use that contract data to qualify and quantify risk in their contracts or find any hidden value. At the same time the majority would not even notice any revenue leakage that can too easily occur from not enforcing contract obligations.
The legal function negotiates and stores vast amounts of legal information. Every single agreement touches this team in some way and there is a mountain of useful data there. However, extracting the value from that mountain is rarely part of their responsibility. As explained in the recent blog in Global Legal Post by our CEO, David Holme – there are smart ways to use that data that can be measured, aggregated or compared – and then demonstrating value by systemizing obligation enforcement can produce a significant contribution to the bottom line.”
Best-in-class contract management will use a mix of technology, advanced analytics and legal expertise to manage large portfolio of contracts and improve their ROI on contracts.
In one of his exclusive interviews this time with Legal Technology on data and contract analytics, Holme provides real-life examples that show how contracts and unstructured data can be monitored and monetized. The first stage would be to analyze and extract risk from those contracts by combining financial risk assessment tools with data analytics. It’s all about qualification of risk. “Quite often the legal industry thinks of risk in binary terms but it is actually made up of a number of factors” Holme said.
What is truly amazing is that value creation is often there in front of our eyes but many big corporates, financial institutions and law firms are just not able to see it. The responsibility of extracting that hidden value is often subjected to a “pass the parcel” game, often not deliberate but accidental. Getting things right in terms of responsibilities and resources here needs collaboration between technology, advanced analytics and legal expertise. There are too many grey areas in between, very often a “no man’s land” in terms of ownership or leadership.
On a brighter note, top organizations are discovering new ways to compete and win – based on the emergence of new technologies and expanding adoption of data analytics. At Exigent, we have already seen how corporates and law firms are transforming themselves to take advantage of the vast array of available contract information to improve ROI for themselves and their clients.