Recently we surveyed more than 10,000 accountants, corporate attorneys, contract administrators, executives, sales and other professionals to learn their level of confidence in their organization’s current contract and transaction processes and infrastructure.
This post is a reaction to their answers about accessibility to critical contract information:
Care to guess the results?
Over 90% of respondents acknowledged they do not have automated accessibility to material terms and data points of the transactions their organizations enter into. Instead, they use a manual search, review and recording process.
If you say “Who cares?” you probably aren't involved in day-to-day transaction logistics OR you've already automated your transaction environment. If not, I want to point out why this matter is important to your organization's bottom line.
The bottom line is that numerous team members in your organization rely on access to one or more terms or data points in a contract or transaction to accomplish their routine missions. Activities including creation, negotiation, execution and contract closeout require “looking it up” which can be painful and time consuming. “Looking it up” also creates audit and diligence risk during financing and m&a activities.
In a recent post, I discussed how duplicate contract versions in a manual contracting environment can cause all sorts of problems. See here. But even after you’ve navigated through the duplicate version issue, you must then wade, flip, swipe and key-word search through pages of documentation to get their answers.
In a manual transaction environment, team members must remember and adhere to the following when searching for provisions, material terms and other metadata:
Know where to find the appropriate version and its status and whether duplicates exist. But let’s assume we’re past that.
Understand the “key words” in the context of how they may be applied.
Completely scan the document for non-searchable items such as content in images.
Organizations that still operate under a manual transaction environment often create “material term” tracking spreadsheets or use other databases like a CRM to track important data points. While these processes provide basic management of deal terms, they still require individuals to remember and perform tasks which are error prone and time consuming…
if it’s not entered correctly it doesn’t exist.
Often—and especially in times of diligence for a financing or m&a transaction—organizations are required to disclose a comprehensive list of other transactions relating to a particular legal matter or provision. For example, understanding certain indemnification or non-compete matters. In a manual contract environment, team members wind up key-word searching through stacks of contracts, a frustrating and time-consuming process during an event when there may be no available time.
Good news! Transaction automation solutions eliminate these problem by capturing provisions and data points at their source, a feature that enables instant reporting and data sharing amongst the team. It accelerates research and diligence. It accelerates your business. See more here.
Have a contract research nightmare to share? Let us hear from you!