help inoculate against COVID-19 disruptions...• Non-disclosures ... • Use of non-standard or...
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Just as effects of coronavirus disease 2019 (COVID-19) are sending shockwaves through the global economy, they can reverberate across your organization’s contract population
The disruptions can trigger various buy-side and sell-side contract terms, including:
Where organizations often struggle
Manual contract processing, multiple contract repositories, lack of visibility into contract population, and inability to extract value from relationships are often pain points magnified by complex technology infrastructure.
Intelligent CLM can help even in the short term
Potential use of contract data to assist with risk mitigation
Let’s talk about approaches that may work best for your organization:
Copyright © 2020 Deloitte Development LLC. All rights reserved.
Don FancherPartnerDeloitte Financial Advisory Services LLP+1 404 220 [email protected]
Bryan FosterPartnerDeloitte Transactions and Business Analytics LLP+1 282 222 [email protected]
Joe MendelSenior ManagerDeloitte Transactions and Business Analytics LLP+1 212 436 [email protected]
Nirav ParikhManagerDeloitte Transactions and Business Analytics LLP+1 281 703 [email protected]
Jason SmithSenior ManagerDeloitte Transactions and Business Analytics LLP+1 713 982 [email protected]
Examples include:
• Sales and purchases of goods and services
• Employment
• Non-disclosures
• IT maintenance
• Real estate
• Investments
Operations
Contracts
Suppliers
Sales/Sales Ops
IT
Finance
Third Party Suppliers
Procurement
Customers
Legal
Internal External
Acquired/Divested Businesses
HR
Compliance
Your ability to conduct business and keep employees safe depends on:
What is one of the most vital sources of information for your most important decisions?
Simply put, not knowing your contract population is not knowing your business.
Informed decisions
Contracts
Do you have enough visibility into your contract population to instill trust among your stakeholders, secure your organization against emerging risks, and even make your organization more resilient against events like COVID-19 now and in the future?
The effects of the COVID-19 event are likely to be felt for months to come. Here’s what you can do now to address near-term contract risks even as you lay the groundwork for a more resilient, leading-practice-driven approach to Intelligent CLM in the longer term:
Manual Contract Processing• Long process cycle time• Use of non-standard or inappropriate contract language• No risk and compliance controls in authoring process
Authoring and execution
Multiple Contract Repositories • Ineffective tracking of rebates and discounts• Limited monitoring of contracted price compliance• No visibility in to enterprise wide contracts
already negotiated
Obligation management
Inability to Extract Value • Inability to capture accurate spend data for
effective supplier leverage and negotiations • No feedback of “lessons learned” into
contracting process
Performance management
How Intelligent Contract Lifecycle Management can help inoculate against COVID-19 disruptions
Vendor contracts
Notifications
Insurance clauses
Service level clauses
Receivable calls
Force majeur clauses
Schedule clauses
Debt calls
Whatever the event:
Economical Geopolitical EnvironmentalEpidemic/Pandemic
Streamlined contracting process enables more rapid savings or revenue ramp-up
Potential Benefits of Intelligent CLM
Greater visibility into contract lifecycle to gain insights into Total Cost of Ownership
Standard clause library auto-populates terms, reduces time, and limits contractual risks
Centralized contract warehouse offers single “source of truth” for reporting and tracking
Intelligent Contract Lifecycle Management (CLM) can help
Choose your organization’s most important contracts01 Identify most
important clauses (+ tag others for the future)02 Perform
detailed review03 Report on
results for decision making04
CLM or RepositoryContractsPurchase OrdersSOWsSLAs
CRM
Customer dataSales pipeline
TPRM
Supplier risk attributesBusiness criticality
ERP
Supplier spendForecasting
• Extract key contract attributes
• Identify favorable/ unfavorable contractual clauses
• Identify key customer attributes (including location, sales volume, etc.)
• Identify sales pipeline, delivery SLAs
• Extract supplier attributes on spend, forecast to prioritize key suppliers
Dashboards and reports
• Reports on contracts, counterparties in scope for notification, broken down by business units, type of services, geographies, etc.
• Status of reach out efforts (in progress, completed, etc.)
• Risk heat maps based on high-risk geographies, suppliers, customers
Risk mitigation plan
• Identify contractual protection and/or requirements for non-performance of obligations due to COVID-19 outbreak
• Identify and prioritize suppliers, customers for notification requirements under contracts
• Notify counterparties on non-performance, delays on performance of contractual obligations
• Tier suppliers based on risk attributes (including location) and business criticality to help formulate mitigation plans
• Identify potential high-risk suppliers based on geographical exposure
Data Output1Processing
Natural Language Processing Tools
1. Outputs are based on directions provided and decisions made by clients.