Today’s

 Chief  Legal  Officer  

Cannot  Afford  to  Ignore  
Contract  Management
Achieving  Contract  
Maturity  Cuts  Risk  and  
Raises  Revenue
It  is  commonly  thought  that  contracts  are  a  small  concern.  They  
only  pertain  to  the  legal  office  or  the  finance  department.  But  
the  fact  is,  contracts  are  important  to  every  part  of  a  company.  
Not  only  are  contracts  binding,  they  govern  over  80%  of  
business  transactions.  Contracts  are  increasingly  important  as  
companies  grow  and  become  more  international. With  improper  contract  management,  companies  expose  
themselves  to  significant  risks  and  losses.  Recent  examples  
Yet  companies  often  lack  control  of  their  contracts:  They  cannot   include  the  following:
find  a  contract  when  it  is  needed,  do  not  know  the  best  terms  to  
seek  in  a  negotiation,  do  not  observe  consistent  approval   • A  major  airline  flew  aircraft  with  defective  parts  for  2  
processes,  allow  critical  agreements  to  expire,  and  face  many   years  to  avoid  breaching  a  contract  with  its  supplier.
other  concerns  besides.
• A  large  telecom  operator  was  fined  millions  of  dollars  
A  company  that  does  not  have  full  control  of  its  contracts   for  failing  to  include  required  consumer  protection  
cannot  be  said  truly  to  be  in  control  of  its  business.  Such  a   language  in  its  customer  contracts.
company  is  subject  to  increased  risks  and  lacks  efficiencies,  
• A  global  technology  company  issued  a  $50  million  
creating  a  substantial  loss  of  revenue.  Conversely,  the  company  
restatement  of  earnings  caused  by  wrongly  recording  
that  understands  its  contracts,  manages  them  effectively,  and  
the  date  of  a  contract.
uses  their  full  value  is  very  likely  to  advance  beyond  its  
competitors  that  lack  such  capability. • An  IT  service  provider  did  not  know  about  annual  price  
rises  in  its  contracts  with  customers.  After  installing  
In  order  to  gain  such  capability,  every  company  needs  Contract   contract  management  software,  the  company  was  able  
Management  software.  Using  this  software,  the  company  is  able   to  increase  revenue  8%  by  enforcing  the  price  rises.
to  achieve  contract  maturity  and  the  benefits  thereof.

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Contract  Maturity:  The  Goal  of  Leading  Businesses
Many  companies  first  think  of  contract  management  software   Stage  1:  Contract  Repository
when  they  need  to  find  a  specific  contract.  Upon  searching,   Stage  2:  Reporting  and  Analysis
these  companies  learn  that  their  contracts  are  not  managed  in   Stage  3:  Authoring  and  Negotiation
a  central  place.  They  may  be  stored  on  individual  hard  drives,  
in  filing  cabinets,  in  forgotten  online  drives—or  in  a   Stage  4:  Integration
combination  of  many  places. Stage  5:  Artificial  Intelligence

Whilst  this  is  often  the  driving  force  for  contract  management  
software,  no  company  should  wait  until  its  contracts  are  in  a  
mess.  And  no  company  should  be  satisfied  simply  to  get  its  
contracts  in  order.

Companies  benefit  from  having  more  than  just  a  repository  to  

store  contracts.  In  fact,  companies  gain  maximum  value  from  
achieving  full  contract  maturity.

Contract  maturity  begins  with  the  central  contract  repository,  

then  advances  through  five  stages  representing  the  path  taken  
by  companies  that  are  most  successful  with  this  business  
transformation.

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Stage  1:  Contract  Repository
The  first  stage  of  contract  management  is  to  create  a  single,  
searchable,  digital  contract  repository,  which  makes  your  
contracts  accessible  to  the  people  who  need  them.

Even  if  a  company  only  achieves  this  stage  of  maturity,  it’s  of  
value  because  the  repository  will  pay  for  itself  the  first  time  
there  is  an  audit,  legal  dispute  or  major  need  to  amend  
contracts.

Stage  2:  Reporting  &  Analysis

At  the  next  stage  is  reporting  and  analysis,  where  metadata  and   According  to  the  International  Association  for  Contract  and  
contents  of  contracts  are  analyzed  to  discover  trends  and   Commercial  Management  (IACCM),  the  potential  loss  of  
insights.  About  three-­‐fourths  of  companies  with  contract   revenue  from  a  lack  of  contract  management  process  is  
management  software  have  reached  this  level. very  great.  IACCM  research  found  the  following  potential  
revenue  loss  by  industry  due  to  poor  contract  management.
At  this  stage  companies  can  obtain  key  data  about  their  
contracts.  Common  measures  include  contract  cycle  time  and   Revenue  Loss  from  Poor  
Industry
renewal  rates  for  sales  contracts  based  on  factors  such  as  price   Contract  Management
and  terms.  Knowing  such  details,  companies  can  identify   Oil  and  Gas 14.5%
bottlenecks  in  process,  missing  internal  controls,  and  
inadequate  practices,  all  of  which  can  be  corrected.  The  returns   Healthcare  and  Pharma 10.7%
on  investment  for  this  achievement  in  contract  management   Manufacturing 6.0%
are  substantial,  in  many  companies  leading  to  measurably  
increased  revenue  and  reduced  cost. IT  &  Telecom 5.4%
BPO 4.8%
This  level  of  maturity  is  a  good  goal  for  an  initial  
implementation,  so  the  company  organization  can  grow  used   All  Industries 9.2%
to  using  new  processes  and  new  analysis.  Yet  there  is  much  
farther  to  go  to  achieve  total  contract  maturity.
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Stage  3:  Authoring  and  
Negotiation
The  third  stage  of  contract  maturity  is  authoring  and  
negotiation,  where  about  half  of  companies  have  achieved  
some  capability  with  their  contract  management  software.  
In  this  stage,  contract  templates  and  legal  clauses  are  
defined  and  made  available  in  a  library,  or  “playbook”.  The  
contract  manager  can  then  create  a  contract  easily  and  
accurately,  and  the  attorney  can  negotiate  with  full  control  
of  the  resulting  language.  High-­‐cost  effort  is  saved,  and  
mistakes  are  avoided.

At  this  stage,  companies  may  also  gain  a  new  ability  to  

handle  third-­‐party  paper:  contracts  that  originate  with  the  
other  side  in  the  negotiation.  With  a  full  authoring  and  
negotiation  capability,  the  company  can  align  the  language  
of  the  third-­‐party  paper  with  its  own  playbook,  allowing  
for  control  of  the  language.  Any  negotiating  disadvantage  
or  compliance  risk  of  using  third-­‐party  paper  is  eliminated.

Companies  at  this  stage  may  also  use  e-­‐Signature  for  their  
contracts,  speeding  up  the  execution  of  agreements.  
Aspects  of  the  contract  execution  must  be  handled  
electronically  today  in  many  jurisdictions,  including  
electronic  payment  of  court  fees  and  stamp  duties.  
Crossing  this  final  barrier,  companies  have  fully  removed  
the  need  for  paper  in  their  contract  processes,  and  they  
may  pursue  the  last  two  stages  to  full  contract  maturity.

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Stage  4:  Integration
At  the  fourth  stage  of  maturity  is  process  integration,  where   “Apttus is an important
the  contract  management  process  becomes  a  seamless  part  of  
the  Customer  Relationship  Management  (CRM),  Enterprise  
component for us in achieving
Resource  Planning  (ERP),  and  Quote-­‐to-­‐Cash  processes.  It’s   our goals for operational
critical  that  a  contract  management  system  be  integrated  with  
these  other  systems  to  achieve  the  full  value  of  automation,  yet   excellence and profitability
less  than  1  in  5  companies  has  fully  integrated  its  contracts   through increased automation
system  to  other  business  systems.
and advanced technologies.
This  stage  is  singularly  valuable  because  of  the  end-­‐to-­‐end  
customer  service  that  can  be  provided  when  all  systems  are  
Despite only being live a few
connected.  This  stage  is  made  considerably  easier  when  using  a   months, we’ve already been able
common  technology  platform  for  CRM  and  Quote-­‐to-­‐Cash  
processes. to reduce the time to close
contracts and gain greater
A  company  reaching  this  stage  has  full  mastery  of  its  sales  
cycle,  full  control  of  renewals  and  obligations,  full   visibility into the contracting
understanding  of  every  rebate  and  discount,  and  much  more.   process, resulting in more
Even  visionary  companies  often  see  this  stage  as  the  endpoint  
of  contract  maturity;  however,  there  is  one  more  step  to  the   accurate forecasting and ease of
top  of  the  pyramid.
reporting.”

Rupinder Goel
Group CIO
Tata Communications

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 • Intelligent  third-­‐party  paper  automation: Automatically  
Stage  5:  Applied   map  business  terms  and  clauses  in  a  third-­‐party  
document  to  your  legal  playbook,  enabling  contract  
Artificial  Intelligence managers  to  swap  language,  reconcile  drafts  and  send  for  
approval  just  as  if  they  had  originally  produced  the  
Adding  artificial  intelligence  (AI)  to  contract  management  offers   contract.
legal  departments  numerous  benefits,  including  reductions  in  
contract  cycle  time,  enhanced  agreement  risk  management,   With  Max  for  contract  management,  companies  have  truly  
and  the  automation  of  third-­‐party  paper.   put  their  contracts  at  the  centre of  their  business.  Companies  
can  continually  improve  their  performance  in  all  areas  of  
Apttus  has  made  applied  AI  available  to  businesses  globally   significance,  and  gain  substantial  advantage  over  those  
with  Max,  an  artificial  intelligence  for  the  enterprise  that   competitors  that  lack  these  innovative  tools.
enables  users  to  interact  with  Apttus  Intelligent  Contract  
Management  via  a  conversational  user  interface,  such  as  with  
text  or  speech.  Apttus  Intelligent  Contract  Management  with  
Max  offers  the  following  innovative  capabilities:

• Intelligent  agreement  risk  management: Locate  key  terms  

and  topics  that  create  financial  risks  in  negotiated  
agreements.  Compare  negotiated  wording  with  agreement  
templates  automatically  to  quantify  exposure  to  these  risks.

• Intelligent  contract  cycle  time  reduction: Reduce  the  time  

required  to  reach  contract  signature  through  cycle  time  
prediction  based  on  similar  agreements.  Compare  
predicted  cycle  times  using  alternate  clauses  to  negotiate  
with  full  visibility  to  the  impact  of  language  choices.

• Intelligent  clause  recommendation: Increase  productivity  

with  alternate  word  choice  and  clause  suggestions  that  are  
proven  to  streamline  negotiations  and  reduce  risk  
exposure.

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 PremjiInvest leads  in  $55m  investment  in  
Contract  Management: US  software  co  Apttus
The  Strategic  Solution Bengaluru:  PremjiInvest,  the  investment  arm  of  Wipro  
chairman  Azim  Premji,  has  led  a  $55  million  series  E  funding  
According  to  Harvard  Business  Review,  60%  of   in  US  software  provider  Apttus.  Existing  investors  Salesforce,  
executives  believe  their  future  success  depends  on   K1,  and  Iconiq participated  in  the  round.  …
the  successful  implementation  of  AI1.  The  potential  of  
contract  management  with  applied  AI  is  only   [Apttus]  counts  ABB,  Workday  and  Cadence  as  customers  and  
beginning  to  be  glimpsed.  By  embracing  full  contract   has  raised  $329  million  in  funding  to-­‐date.  Apttus  has  over  
maturity,  companies  of  any  size  equip  themselves  to   1,100  employees  and  600  customers.  Max,  Apttus'  artificial  
compete  effectively.  These  companies  gain  speed,   intelligence  agent,  uses  a  conversational  interface  to  simplify  
visibility,  control,  risk  mitigation,  and  top-­‐line  benefits   enterprise  applications  and  can  be  extended  to  any  business  
to  such  an  extent  that  they  soon  view  contract   application.
management  as  a  core,  strategic  function.
"PremjiInvest is  always  highly  selective  in  its  investments,  
Apttus  is  the  world  leader  in  contract  management,   working  with  the  strongest  management  teams  and  the  most  
with  more  than  600  customers  using  its  contract   promising  companies,"  said  Sandesh  Patnam,  partner  and  
management  solutions.  Such  customers  include  the   lead  investor  in  the  US  for  PremjiInvest.  "In  Apttus,  we  have  
most  sophisticated,  most  highly  regulated,  and  more   found  a  team  and  market  opportunity  that  fits  that  
international  companies:  Apttus supports  more  than   description  perfectly,  and  we  look  forward  to  working  with  
1.5  million  contract  management  users  in  more  than   them  to  help  realize  the  full  potential  of  the  platform."
40  languages.
Source:  The  Times  of  India,  15  September  2017

Contact  Apttus to  learn  more  about  achieving  your  

business  goals  with  contract  management  technology.

1.  Harvard  Business  Review  Analytics  Services  Survey,  April  2017

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About  Apttus
Apttus,  the  category-­‐defining  Quote-­‐to-­‐Cash  and  Contract  
Lifecycle  Management  technology  company,  drives  the  vital  
business  process  between  a  buyer’s  interest  and  the  
realization  of  revenue.  Utilizing  a  patented  combination  of  
SaaS-­‐based  applications,  the  Apttus Intelligent  Cloud  
platform  helps  our  customers,  achieve  better  business  
outcomes.  Enhanced  by  Machine  Learning  and  Max,  an  
artificial  intelligent  agent,  Apttus applications  include  
Configure  Price  Quote,  Contract  Lifecycle  Management,  E-­‐
Commerce,  Billing  Management,  Revenue  Recognition,  Deal  
Management,  Order  Management,  Promotions  
Management,  Incentive  Compensation  Management,  
Rebate  Management,  and  X-­‐Author.  The  Apttus Intelligent  
Cloud  platform  is  powered  by  the  world’s  most  trusted  cloud  
platforms,  including  Salesforce  and  Microsoft  Azure.  Apttus  
is  based  in  San  Mateo,  California,  with  additional  offices  
located  in  Ahmedabad,  Pune,  Bengaluru  and  across  the  
globe.  For  more  information  visit:  apttus.com.

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