Why Contracts Matter to Your Enterprise – And What You Should Be Doing About It

The contract is the lingua franca of business. But how does the enterprise maximize the consistency and business value of its contracts, individually and collectively? And why does that even matter?

It matters because contracts matter because they define much if not all of how your business does business. What makes it matter even more is that most enterprises likely have no clear idea of exactly how many active contracts they even have. So even fewer have implemented any kind of consistently managed and enforced, business-driven, fully-legally-vetted processes for managing those contracts, outside of their legal team.

This is a situation fraught with peril, because if the wrong contract "breaks down," it can "break" the enterprise's ability to do business. And if there are no good processes in place for managing to avoid such situations, it's unlikely that there are processes in place to prevent them from recurring. In this regard, contracts are as critical, yet currently as invisible or opaque to enterprise decision makers, as the IT services that make doing business possible.

Fortunately, new solutions are changing the contract management solutions, landscape, as they have done and are doing with IT and business service management. And those same IT services, when combined with proven best practices for contract management and its integration with other key business functions, can transform invisibility and opacity into greater agility, consistency, and transparency.

I saw ample proof of the growing importance of all of this, and the growing awareness of its importance, at Accelerate 2015. This event was a gathering of some 2,000 members of the expanding ecosystem of a company called Apttus. Apttus is bringing disruptively effective innovation to contract management, and to related functions such as quote-to-cash (QTC) and configure, price, quote (CFP) management.

Apttus provides an integrated, flexible environment for complete contract life cycle management, including QTC, CFP, and other related functions. And the company's solutions run upon, but do not require customer purchase or use of, Salesforce.com's Salesforce1 platform. Which means that Apttus solutions can scale easily, and invite further innovation by partners and customers.

Beyond its technologies, Apttus enjoys vibrant and growing support from those partners and customers. Partners, sponsors, and exhibitors included Accenture, Cloud Sherpas, Deloitte, and PwC. Interestingly, all of these companies, among others presenting and/or exhibiting, have significant practices focused on Salesforce.com, pioneering cloud-based service management solution provider ServiceNow, or both.

One of the most interesting partner exhibiting at Accelerate 2015 was Seal Software. As Lloyd Alexander, Vice President of Contracting Strategy for Seal, explained to me, his company focuses on contract discovery and analytics. Seal Software combines a Google-like search engine with analytical power analogous to that of IBM's Watson.

The software enables legal teams, contract managers, and others to search through an enterprise's contracts for specific consistencies, inconsistencies, sections, wording, or other features. It integrates with and adds value to the contract information managed by the Apttus solution, helping users to navigate through that information more easily and quickly. And Lloyd agreed that Seal Software's growing popularity is being driven by the growing importance and awareness of the importance of contract management.

Another sign of that growing awareness: many of the sessions at Accelerate 2015 featured Apttus customers. I spoke briefly with one of those customers, Brian Lille, CIO at Equinix, after he spoke on a panel. Equinix operates large-scale data centers in 33 markets across five continents, and supports the infrastructure of the Internet and World Wide Web.

Brian is not only a user and fan of Apttus software. He is also a long-time happy user and champion of ServiceNow, and will be speaking again at that company's annual Knowledge conference as well. Brian and his team are also exploring ways to integrate the strengths of the Apttus and ServiceNow solutions to bring more improvements to contract management at Equinix, within and beyond IT. And Equinix is just one example of the level of sophistication and excitement I saw among Apttus customers speaking at and attending Accelerate 2015.

I got to spend a few minutes sharing and comparing thoughts and perceptions with Kamal Ahluwalia, Chief Marketing Officer at Apttus, before ending my time at Accelerate 2015. He opined that many Apttus customers still had not yet discovered or realized the breadth and depth of features of the Apttus solution. He added that he sees innovations driven and created by Apttus customers and partners will begin to multiply as more and more of those constituents realize that breadth and depth. And Kamal expects the speed with which these innovations appear will surprise many, as Apttus and its ecosystem members tend to move "at Web speed."

What You Should Do About Contract Management At Your Enterprise

1. Recognize the need – and the opportunity. Contracts are official commitments, as well as potentially highly valuable business resources. If your enterprise doesn't yet treat them as such, find allies who agree, and begin the evangelism process as soon as possible.
2. It's about more than a central repository. "One-stop shopping" for contract templates, guidelines, and archives is a good start, but is only the beginning of effective contract management. Turning combinations of structured and unstructured data into information that can be easily and consistently stored, searched, accessed, and shared is no small task. If your legal or contract management team doubts this, they should ask their counterparts in IT service management. Then, they should collaborate with those IT counterparts, and learn from their successes and failures to build, then build upon, that central repository.
3. Create and enforce consistency. Every time some individual or department executes a contract that is not based on rules, wording, and templates already in use, a legal or contract management team member loses a day of PTO. Or at least it must feel that way. Encourage collaboration among contract management, legal, and marketing team members to create boilerplate contract elements, templates, and easy-to-follow guidelines for all who engage in contracts. And make sure all of these get reviewed and updated regularly and as needed.
4. Find and implement a robust technological foundation for contract life cycle management. You have multiple options from multiple vendors. You may even have useful tools already in place that simply lack processes for consistent adoption, internal evangelists, or both. When considering alternatives, even if you don't choose Apttus, look for solutions and vendors with similarly impressive levels of ecosystem excitement and support, technological innovation, and commitment to customer and partner success. Only such vendors should make your "short list."

No one outside of IT cared about IT infrastructure or service management. That is, until business decision makers realized that IT services enable the business, and that both IT and business services need good management.

No one outside of compliance, risk, or security management cared about governance, risk, and compliance (GRC). That is, until business decision makers realized that GRC isn't just about regulatory compliance or risk management, but is about enterprise "ART" – agility, resilience, and trustworthiness.

Until recently, few enterprise decision makers who were not contract lawyers or negotiators cared about contracts or their management. That needs to change, and is changing. Do what you can to make sure that such change is afoot at your enterprise.