A web based contract management tool

Agenda

• Welcome • The paradox • The business case for automated contract

management - The issues- The solutions- ROI

• DocStation – a walk through• DocStation offerings • Questions?

Paradox

• Your contracts are your business• All business is based on contracts, whether verbal or written

contract• Verbal agreements – problem of proof and evidence• Best written contract is worthless, if not managed properly

yet, little attention to tracking and managing contracts

2. The business case for automated contract management

90% of enterprises view effective creation, monitoring and management of contracts as either “very important” or “critical” to their overall success

(Aberdeen Group Survey)

81% of companies report that just locating a contract is problematic(IACCM Survey of 100 global 2000 companies)

The issue …Does this sound familiar?

• I am not sure where all contracts are being stored• Contract templates are being recycled• Multiple versions of the company’s standard terms are spread all

over the company • We don’t have paper contracts with all our customers/suppliers• In many cases, we don’t get back an original duly signed contract. A

fax copy is the best we can get.• We are unable to efficiently retrieve important information out of our

contracts• It is not excluded that deadlines and milestones have been or will be

missed. We simply don’t know.• We are unable to track performance of our suppliers; our suppliers

are managed through lunch in a decent restaurant• We don’t know how to verify or improve compliance

The issue …Ineffective contract management

Contract management remains a major or significant source of operational weakness amongst many SMEs and corporations. CM is a largely fragmented activity at most companies:

Why?

• Lack of formalized contract management procedures• Inefficient, labour-intensive processes• Limited visibility into corporate contracts• Ineffective monitoring and management of contract compliance• Inadequate analysis of contract performance; difficult to obtain

quantitative measurements since no tools exist

The issue …Ineffective contract management

• Contractual “give aways”: watch out for:

evergreen renewals: auto-renewal implies missed savings opportunities maverick buying: up to 30% of a typical company’s purchase occurs outside of a

contractual agreement missed discounts or pricing errors milestone slippage and penalties regulatory non-compliance

• Multiple parties involved in negotiation and none of this knowledge is captured in a systematic way

• Distributed ownership of contracts; each unit applies its own system or method before slinging it over the wall

• Information is fragmented and inaccessible; dislocation of knowledge between islands of information

Islands of information

The issue …Obvious business risks

Contracts lacking critical documents or terms Vendors may be overcharging Customers may be undercharged Loss of documents Lack of visibility for timely analysis of new regulation Critical contract events may be missed Current tracking solution unreliable Redundant contracts executed by separate divisions Inefficient use of and wasted time for resources Compromised customer loyalty

Solutions : contract optimizationSix Steps to better contracts

Contract Optimization:

• the process • of systematically and efficiently managing • contract creation, execution, compliance and

analysis• for the purposes of maximizing operational and

financial performance and minimizing risk

Solutions : contract optimizationSix Steps to better contracts

1. Standardize your contracts

standard language minimizes inconsistencies Pre defined contract options will streamline contract process,

reduce approval process and ensure completeness contract professionals can focus on more strategic activities;

avoid repetitive legal review and save € Define profitable contract templates that can be recycled in

the future Save and incorporate the “best of the best” templates Analyze existing contracts and understand what works and

what can be improved

Solutions : contract optimizationSix Steps to better contracts

2. Develop and implement a company wide contract process• Define roles & responsibilities• Determine what approval processes can be standardized and automated

3. Develop a central repository for all your contracts• Provide easy access to users• facilitate leveraging

4. “Activate” contract terms in transactional systems• Leverage collaboration; workflow based approval processing between buyer and

seller;• E-mail with linkages to contract management applications

5. Improve ability to analyse contract performance, compliance and risk

• For the buy-side contracts, are we leveraging volume discounts?• For the sell-side contracts, are we billing at the right price based on volumes? Are

deductions being handled properly?

6. Improve automation of contract management life cycle

Integrated approach

No thanks …Reasons for not automating contracts

• We don’t have enough contracts …• We don’t have resources to enter all those contracts …• We don’t want to share information with other departments …• We only work with standard terms …• We’ve never had serious contract issues …• We are not in charge of the contracts or the tools …• We don’t have the budget; it’s too expensive …• We wait for next generation software …• My self made spreadsheet (access – excel) will do the job …• We want to avoid transparency and work load visibility …• Yet another system …• IT is too busy.

ROI

Obvious and Quick

• Improved compliance with procurement terms (e.g. discounts)

• Reconciliation of procurement and sales orders to the contracts

• Reduced legal support for the identification of alternate acceptable terms and conditions

• Reduced time to contract and contract research time

• Potential for more efficient external and internal audit review of contract financial exposures

• Visibility and transparency on work load and work flow.

ROI Obvious and Quick

• Reduced risk associated with potential contract exposures– Contract terms in compliance with policies

– Visibility of exposure to external events

– Reduced reliance upon key personnel, electronic spreadsheets and manual procedures to track contracts

– Visibility into all documents (e.g. amendments, schedules, etc.) for a contract

• Improved information and insight into customer or vendor relationships

• Risks of “evergreen renewals”; “maverick buying”; pricing errors; milestone slippage and penalties are avoided

• Platform for customer profitability and vendor performance• Support for automated disaster recovery

The solution

DocStation: a walk through

What do you need to work with DocStation?• Internetconnection (webbased)• Recent MS internet explorer browser • DocStation Account (credentials)

What do you need to e-sign a pdf-contract? • Email address + internet connection

• Adobe acrobat reader (free)

• A qualified digital certificate (e-ID or other qualified certificate)

Web-based!

Advantages WEBBASED +SAAS:

- No infrastructure costs- No need of tech-profile employee- No worries about :

backups security issuesUpdatesUptime (SLA)Budget (fixed price)

- Everywhere & anytime- Only need of IE 7.0 + internet

* firefox = ok , but d2s-client : Q3 2009**d2s-client = detection of valid certificate stored on your PC

Simple configuration

1 Account & # Domains

Users

• External persons: can be invited to sign a pdf-contract. They can download the signed pdf-contract

• Users of DocStation have different roles / rights : – read-only – make drafts – send out sign-invitations – create users – set notifications – delete or archive contracts – Etc ...

User-model

Type users:

Account manager: makes domains + contract-types per domain

Domain manager: creates users + templates per domain

Editor in chief: gives ok on drafts + sends sign-invitations

Editor: drafts of contract , archiving …

Viewer: read only

External persons can get invitations by e-mail to sign PDF contract (but is not a user of DocStation)

A USER CAN BE ANYBODY - ANYWHERE - ANYTIME

How to create a contract-draft:

5 ways:

1.Template 2.Webform: fill in empty fields (customization)

3.Clause library: “x” + “y” + “z”

4.Copy of an existing sign-item

5.Uploaded document

End result is always a PDF contract generated from your contract and his attachments.

Security

• A class data center: redundant internet-feed, access-security, right environment for servers: airco, dust free, fire protection, generators in case of electricity failures and major outages, ...

• Servers : no single point of failure (hdd, nic, power supply , ...) + A brand server

• Backup: daily incremental + weekly full back ups + store backup on different locations ...

• Passwords of users: are not and can not be known to anybody but the owner of that password

• Delete is not really deleted : data can’t be “destroyed” • Dump of your contracts on request + webservices: real time• Virusscan of uploaded documents

How to catalogue a contract

Pick right DOMAIN

Pick right FOLDER

Create sign-item & pick TYPE of contract

Upload attachments of sign-item

Create meta-data on contract

Set notifications if needed

Status of contract

Contract LifeCycle

• Draft : first development stage• Locked: contract is being altered by person x

• Ready to Sign : invitation to sign + PDF transform

• Signed: PDF is e-signed by ALL parties

• Ended: termination date is reached

• Declined: contract is declined by 1 party ... => Clone it, alter source files (lock / unlock) and start sign-procedure again.

Notifications

• A contract can trigger an e-mail notification

• The trigger is date-driven ...

• Event-driven notification = customization • (eg : if contract reaches a certain value then person X needs to be notified ...)• sms notification is optional

Metadata

METADATA • Name tag on luggage = extra data about your contracts

… eg: rating of supplier.• Can be DYNAMICALLY added or altered• Mandatory or optional meta-data => you decide• Adds extra value to your CMS• Meta-data set can be determined per contract-type• Extract Business Intelligence :

eg: rating of suppliers, risks, value of contract, penalties, renewal date, renegotiation date …

INTERACTION WITH OTHER SYTEMS (CRM, ERP)• Web service : mass import of data, export of data

(extraction, analysis and reporting of info), functionality sharing (eg: trigger notification function) IN REAL TIME!!!

• To be discussed between your IT and our IT, customization

Business Information about contracts

Without DocStation With DocStation

• Software Licensing model

• SaaS model

• BPO model

• White label model

• Modular approach

DocStation Offerings

Installation of DocStation at the customer’s premises (or a datacenter chosen by customer)

No limitations in terms of users No limitations in terms of affiliated companies of the

customer’s group that can make use of the system Implementation time 3 à 6 weeks Software license fee : 50K€ (VAT exclusive) Set up and implementation services (10 à 20 days) or

additional services, e.g. development of specific functionalities; integration with ERP; CRM; training; …

Maintenance fee (annual fee of 15% on the license fee and implementation cost).

DocStation Offerings1/ Software licensing model

• No investments, no capex, no lead time• Only requirement = internet connection• All CM functionalities are provided as per license model• Set up fee including a training session at 950€• Monthly recurring fee = 200 € for a 12 months contract term• No limitations in terms of number of users or affiliated companies• 100 MB disk space included• Options :

- extra disk space - helpdesk- contract support

• SLA included (e.g. availability; security; back up, etc)

DocStation Offerings2/ Software as a service model

BPO Business Concept Long term contracting out of non core business processes with a view to

create added value to the business Contract Handling Service - “the extended enterprise for transactional and

legal work”

Business Ratio Manage expertise and not size Leverage networked model and replace integrated structure Manage what to deliver rather than how to deliver Manage results not resources Decrease costs and increase efficiency

How? Trusted partner in legal and transactional process needs Introducing domain expertise Introducing efficient contract management (people/functionalities) Fixed and Transparent Pricing

DocStation Offerings3/ BPO Model

DocStation Offerings3/ BPO Model

We offer “contracts as a service”

=

full Docstation functionalities with legal & contractual support services for a fixed monthly fee !

• Standard Contract Management solutions = a software vendor approach; we go beyond software … expecting busy lawyer to adapt to

technology that often causes the lawyers to feel that they have to do more work than without the technology

great value of tracking and reporting – but how to get the detailed information into the system

• Legal process outsourcers = only provide the labour, but not an integrated technology platform

DocStation Offerings3/ BPO Model

Benefits for your business

hosted contracts management platform supported by a team of lawyers and IT specialist designed to take advantage of the technology and the team.

No capex; no hiring; no set up fee; no lead time; Fixed monthly “all in” fee depending on the support level

required as defined during the initial audit phase Flexible support intra or extra muros Integrated into the business processes and requirements Transferability and service delivery continuity

• DocStation functionalities can be integrated as part of a broader offering;

• Implementation of your “house style / brand”

e.g., Ollygos [CM as additional tool for outsourced back office support]

DocStation Offerings4/ White label model

E-contracting tool as part of the business process:

e.g., web sales

Web based collaborative tools between buyer and seller to improve “time to contract”:– outsourcing transactions– temporary company or consortium management.

DocStation Offerings5/ Modular Approach

keybenefits

Q&A

Questions?