Last week, Icertis released new research that suggests Global 2000 companies doing business in the European Union can expect to have 1 in 10 contracts impacted by Brexit.
Given that the average Global 2000 company has tens of thousands of active contracts, the findings mean thousands of contracts at each company could be impacted by the myriad implications of Britain leaving the EU—tariffs, customs, freedom of movement, etc.
The findings are based on an analysis of a sample of the 6.5 million contracts managed on the Icertis Contract Management (ICM) platform. This is the most comprehensive analysis yet of how Brexit will affect the legal agreements underpinning commerce in Europe.
The findings also underscore why it is vital that companies have a contract management platform powerful enough to surface and address contract language put at risk by regulatory changes.
Those companies that have digitized their contracts will be able to quickly surface all contracts impacted by whatever final form Brexit takes (still a big question as of this writing). Additionally, they will have the power to establish and execute fallback language and bulk amendments across their body of contracts to remain proactive.
Meanwhile, companies that don’t have an enterprise contract management system already in place are facing a tedious, manual process of finding all contracts affected by Brexit—a process that will be time-intensive yet neither satisfying or comprehensive.
But if your company falls in this latter category, your response might be: “That would have been useful information two years ago. Not two weeks before the Brexit deadline!”
But I’m here to tell you: There will be many more “Brexits” to come, by which I mean regulatory or policy changes that will have massive impacts on commercial relationships and the contracts that govern them. As the world shrinks and commerce becomes more global, these changes and disruptions have cross-border impact.
After all, it wasn’t too long ago that organizations were scrambling to determine how they could stay compliant with the EU’s General Data Protection Regulation (GDPR).
At the time, some companies decided that undertaking a comprehensive contract digitization program would be too time-consuming to address GDPR, and so decided to leave the work for later and hope they stayed compliant in the meantime. Others used GDPR as a forcing function to digitize their contracts for better compliance both in the near term and in the future.
Guess which of these companies were prepared to be proactive with Brexit and which weren’t!
Then there’s the LIBOR sunset, and the U.S.-China trade war, and NAFTA renegotiations and … the list goes on.
In 2018, Thomson Reuters Regulatory Intelligence captured more than 57,000 regulatory changes and updates from over 900 regulatory bodies worldwide – an average of 220 per day.
In this context, Brexit is a clarion call for reimagining contract management with the right technology platform that turns static documents into strategic assets using advanced technology like artificial intelligence and machine learning.
At Icertis, we are proud to work closely with global companies that are proactively answering this call to digitally transform their commercial foundation and increase their strategic and operational agility.