In my previous blogs, I've addressed increasingly advanced applications for contract management software: First, we explored how a General Counsel could have used contract data to lower insurance premiums for their company by being able to search across its entire body of contracts. Next, we looked at a more complex scenario in which a missed contract obligation cost a company millions, and how cloud-based technology could have helped.
Today, I want to share the story of an IT company that successfully used enterprise contract management software as a tool to reduce litigation risk and improve business outcomes.
A Troubled Project…
A few years ago, this IT company (Company) bought a cloud-based contract management system, which had the ability to track contractual obligations.
When the Company's Chief Financial Officer was alerted to the missed payments by a major customer (Customer), he initiated a payment claim. To his surprise, the Company's demand for payment was met by a counterclaim by the Customer for delays in meeting project milestones.
The CFO sought help from the GC.
What Does the Contract Data Say?
With the obligation management capability, the GC was immediately able to understand what obligations had been missed by both her Company and the Customer. The obligation management tool allowed the Company to document all obligations of both parties—timelines, delays, change requests by the Customer including emails that documented the change requests and consequent delays.
For example, the Customer had delayed site readiness, a delay that was documented in the contract management system and had a cascading effect on many of the Company's own obligations. The GC also saw that the Customer’s employees were not attending required training, another critical obligation of the Customer.
A Clear Benefit
With the contract management system, this GC was able to push back on the Customer's counterclaim with data that showed the Customer's missed obligations were the direct cause of the slipped milestones. The Customer dropped the counterclaim and the project got back on track.
The GC used the contract management system as a single source of truth for data from different geographic locations, including unmanaged emails. And she is not alone. Increasingly, General Counsels around the world are using the cloud-based contract management software as a single source of truth for the enterprise.
Below, watch Simon Anolick, Director of Legal and IT at HERE Technologies, discuss the importance of properly managing contracts, which he calls "the bedrock of our relationship with customers and suppliers."
The legal world is quickly changing, and legal departments that fully embrace automation will set themselves up for success in the years to come.
Click here how our obligation management tool works, or sign up for a live demo.