Intelligent Agreement Management

First things first. It is clear that a lot of intelligent thought, creativity, and hard work went into Intelligent Agreement Management (IAM). If you're a Docusign employee reading this, I commend you on what you've done. And while the hard work has just started, I hope you've taken the time to commend yourselves. I'm excited for where we can take this.

Now, just what is it that deserves all this commendation? Last week at their yearly conference, Docusign announced the creation of an entirely new Software as a Service (SaaS) category: Intelligent Agreement Management (IAM). If Docusign can execute on their vision, IAM will revolutionize the way companies think about, interact with, and derive value from their agreements. It's a big deal.

In this article I'll go over why they created IAM, what exactly it is, and where I hope they take it.

Why IAM?

Why did Docusign create IAM? Why are we in need of an agreement revolution? What are the problems they're trying to solve?

The Agreement Trap

As Docusign CEO Allan Thygesen described, nearly all organizations suffer from the Agreement Trap -- every year nearly $2 trillion of global economic value is lost because organizations waste time managing their agreements, and because the valuable information within agreements are literally "trapped" in the text of documents. (Last month an incredibly intelligent [and humble] person wrote about "unlocking contract data". Truly he was ahead of his time.)

What exactly does this Agreement Trap look like?

An Agreement Trap Example

Imagine a discount grocer. They work with Retail Partners (RPs) who independently own and operate stores. There are 1,000 such stores across the country and nearly as many RPs operating them. To bring on a new RP, first that potential RP must sign a confidentiality agreement. When that's squared away the RP and the grocer must negotiate a Master Agreement (MA) that governs the terms of their relationship; it contains dates, obligations, terms, and other data key to the relationship. This MA is added to the hundreds of other MAs that govern the relationships the grocer has with all of their RPs.

This grocer needs to constantly check which MAs are coming up for expiration or renewal, it needs to ensure obligations are met on both sides, and it needs to renew and/or renegotiate each of the several hundred MAs when the time comes. On top of all of that there are agreements for the vendors the grocer works with, corporate agreements for things like office space and equipment leases, and agreements with thousands of employees. The time wasted and money lost managing all of this is the Agreement Trap that the discount grocer finds themselves in.

What is IAM?

DocuSign has positioned IAM to be a new Software as a Service (SaaS) category. Those familiar with Customer Relationship Management (CRM) or Enterprise Resource Planning (ERP) know that these SaaS categories are composed of powerful, robust platforms that solve big, important problems for organizations of all sizes. They've modernized the way we do business, enabling standardization and a data-driven approach to business operations.

The CRMs of the world help organizations sell better and faster. The ERPs of the world help organizations optimize operations and automate processes. Now, IAM seeks to help organizations create, commit to, and manage agreements.

Just what is IAM? At this point IAM can be broken into three critical components:

• Maestro
• App Center
• Navigator

Let's look at each.

Docusign Maestro

At its core, Maestro is a workflow engine. It is a way for people to define workflow automations. Let's take another look at our discount grocer and their Retail Partner (RP) onboarding process. A highly manual process might involve a prospective RP emailing an onboarding team at the grocer. The team responds back to collect data about the RP and after that exchange pulls an initial Confidentiality Agreement (CA) and a few other agreement to send via email to the RP. Those are signed and returned via email back to the onboarding team. With the Confidentiality Agreement in place, now the onboarding team and the RP can begin negotiating the Master Agreement, again over email. If you got lost just reading that then imagine the difficulty of managing that process across hundreds of RPs. There's a lot of wasted time and frustration on all sides.

With Maestro, the grocer could quickly and easily set up an automated workflow to streamline the RP onboarding process. Rather than email an onboarding team, the prospective RP provides their data in an online form. Immediately after that the RP can sign a Confidentiality Agreement which goes straight to the onboarding team and their task queue managed in IAM. After a quick review they can click a single button that sends an initial Master Agreement to the RP and any necessary negotiations go through a predefined process.

All of the steps in this streamlined, automated process would be defined in Maestro. There would be very little if any computer programming required and the grocer could go from a highly manual process to a highly automated one.

Why Maestro is Important

Maestro is important because it allows organizations to quickly and easily define automated processes for the agreement-related work they were doing manually via email and word processors. This goes a long way towards solving the time-wasting aspect of the Agreement Trap.

Where I Hope it Goes

The key for Docusign will be to create in Maestro a tool that balances simplicity with capability. A very simple workflow engine would make it easy to set up simple automations, but it may struggle to support even moderately complex automation needs. A highly capable workflow engine may support the needs of enterprise organizations, but the setup and maintenance required may negate the purported efficiency gains. Where exactly is this balance? I'm not sure, but I'm confident the highly capable people at Docusign will figure it out.

App Center

The App Center is a library of third party apps that can be integrated to IAM. How does this help? Let's look at our discount grocer again. They have NetSuite as their ERP, and it contains key data for each of their stores and Retail Partners (RPs). Luckily, NetSuite has partnered with Docusign and has an app in the App Center that allows IAM to create and update Netsuite records. At the end of the RP onboarding process, IAM (via Maestro) can easily create a new store record and update it with pertinent information. No longer would someone on the onboarding team have to do this step manually.

Why the App Center is Important

As a Systems Integrator (SI), my company is often asked if we can connect system X with system Y. "Yes, but..." is often the answer. After the "but" comes something like "it will take a lot of time, effort, and budget to do that." This is usually because connecting two disparate systems requires a lot of custom development and testing -- an expensive proposition. With the App Center, third parties can do the heavy lifting of creating connections once, and then everyone else in the ecosystem can leverage that work for their own purposes. It allows IAM to be a true enterprise SaaS system that sits between other parts of an organization's IT architecture.

Where I Hope it Goes

The key to success for the App Center will be pure size. There needs to be a lot of apps capable of achieving pieces of automation and connecting myriad systems. Docusign will rely on partners to help them build out the App Center. I have faith that they can do this.

Docusign Navigator

During Partner Day last week Celine Beck made an incredible statement: "Customers don't care about files and folders, they care about improving processes and relationships." At Partner Day last year Michael Jewell gave me a similar gem: "it's not the contract that matters it's what's in the contract."

Navigator is an intelligent repository. It is the tool organizations can use to make use of what is in their contracts so that they can improve processes and relationships. Again, let's look at our grocer. They have hundreds of RPs that they do business with, some governed by Master Agreements with favorable terms and some with not-so-favorable terms. They want to know when those not-so-favorable agreements are up for renewal, far before the renewal date so that they can renegotiate. This is just one example of the sort of value Navigator can provide our grocer.

Why Navigator is Important

All of the contract management repositories I've experienced are really just content management systems. They'll happily store and even organize agreements into folders, much like you'd organize files into folders on your computer. But of all the clients I've worked with over the years, none of them were really that concerned with the files themselves. They were more interested in things like "with which clients do we have unfavorable Limitation of Liability clauses?" or "with which vendors do we have unfavorable payment terms?"

The Party management functionality in Docusign Contract Lifecycle Management (CLM) is a move in the right direction. It establishes "Parties" -- or entities with which an organization does business. Users can look at a Party at a glance to see which contracts relate to it, whether or not a Master Service Agreement is active, and how much the organization has spent with the party. Navigator should build upon that, creating even more robust party functionality, agreement tracking, and agreement analytics.

Where I Hope it Goes

The key for Navigator will be robustness and extensibility. While the current Party Management functionality in CLM is valuable, it can be rigid and limited in its capabilities. I would like to see a very robust system in Navigator where users can define complex relationships between parties, much like users can define complex relationships between Accounts in Salesforce. It should be extensible, allowing users to create their own custom party attributes. The relationships between agreements should be robust and extensible, too. For example, a Master Service Agreement (MSA) may have three amendments that should be easily visible and traceable. That MSA may have several related Statements of Work (SOWs), each with their own amendments or addendums. All of these should be easily navigable in Navigator.

What About CLM?

One thing that remains uncertain to me is where CLM fits into DocuSign IAM. At Partner Day I asked Celine Beck for clarification. "Can you help me understand the boundaries of IAM and CLM -- where does each start and end? Or is that not really the right way to think about it?"

The short answer is that it's not really the right way to think about it, at least in the long term. In the short term CLM will remain mostly an independent, standalone system. But in the long term CLM will be fully integrated into IAM. How exactly? I'm not exactly sure, but...

Where I Hope it Goes

CLM currently provides functionality in three areas:

• Template management and agreement generation: It allows users to manage templates and generate agreements from those templates.
• Negotiation management and process automation: It helps organizations in the negotiation, review, and approval of agreements via process standardization and automation.
• Agreement storage and contract analytics: It acts as a repository for agreements and enables searching and reports against those agreements.

I believe that template management and agreement generation can be stripped out and placed into Maestro in some way. I would like to see a Maestro workflow step that handles the generation of agreements -- this could be in a standalone capacity or kicked off from a CRM or Procurement Management or some other system.

Agreement storage can (and should) be handled by Navigator -- an integral piece of IAM.

This leaves just the negotiation management and process automation capabilities of CLM. What I would like to see are the incredibly robust negotiation management capabilities of CLM turned into something like a Negotiation Management module within IAM. A Maestro workflow could invoke an instance of Negotiation Management which would manage the way in which an agreement needs to be reviewed, negotiated, and approved using an automated process enhanced with Artificial Intelligence.

I think CLM can be stripped for its parts and integrated into IAM, effectively displacing the very concept of CLM (and forcing me to create a new name for this newsletter). Negotiation Management would be all that remains of CLM as a piece within IAM.

Conclusion

Docusign has made a big move and is making big claims. They believe that they have created an entirely new SaaS category -- Intelligent Agreement Management. If all goes to plan, an IAM will be necessary for every modern enterprise just like CRMs and ERPs are necessary.

Personally, I think they're onto something here. In my years working in CLM I've come to realize that there needs to be a system in the market that solves the Agreement Trap and helps organizations understand the value locked within their agreements. Will the market agree? Will Docusign be able to execute against this vision? That remains to be seen, but I'm confident that the people at Docusign can make it happen.

Are you a potential client looking to learn more about IAM? Are you a Docusign employee who I can help? Feel free to reach out to me. I'd love to hear your thoughts, concerns, and help all of us navigate this exciting journey we're on.