The pandemic has, to an extent, resulted in many complexities for companies big and small, which couldnt have been thought about. Contract management is one such area. Any company is a signatory to many kinds of contracts. The physical unavailability of the concerned person to be present at a given location is an unprecedented characteristic to be visualised before ironing out contractual obligations.
In such a scenario a contract lifecycle management (CLM) solution can serve the purpose of fulfilling the objective of a contract as if it was signed in conventional conditions of a person being available physically and able to interact.
KPIT Technologies is an IT company providing software to automotive companies. The MNC signs a number of contracts and recently completed the implementation of a CLM system. After 33 weeks.
KPIT has subscribed to Icertis’ Icertis Contract Intelligence system (ICI). “In the pandemic, where people are unable to meet up in person, tools like ICI come handy. A salesperson, by entering certain basic metadata fields can generate a contract for himself. Some years back this was unimaginable. But with the advent of CLM tools, dependencies on legal teams have reduced and this makes the overall process faster and efficient. Further, the Adobe e-sign feature has been like a blessing in disguise. We are seeing a seamless execution of contracts over the tool, without having to do anything in physical,” says Sachin Chipade, Group Manager – Legal KPIT Technologies Limited.
When KPIT approached Icertis, it did not have a contract lifecycle management (CLM) system in place. Contracts were stored locally, obscuring visibility, and inhibiting optimal contract outcomes. “It was a challenge for KPIT to track contractual obligations and obligation management was done on an ad-hoc basis reliant on manual processes and prone to errors. To meet the obligation tracking and contract management solutions, KPIT chose CLM as its global, enterprise-wide contract intelligence solution. The manual process for contract management did not align to KPIT’s company-wide goals of leveraging digital solutions to tackle business challenges and capture analytics. KPIT needed a system that could integrate with robust enterprise software systems already in place for other operations,” says Ajay Bhandari, Executive Vice President, Professional Services, Product & Delivery Team, ICERTIS.
The solution enabled KPIT to digitise all its contracts and move to a centralised, cloud-based contract repository. Some of the key differentiators included its robust obligation management functionality and integration with enterprise systems to automatically extract obligations and other metadata. In fact, users can configure dashboards that present relevant analytics and provide full visibility into the status of and compliance with obligations across the enterprise. It can also accurately depict the complex obligations that have been delegated to subcontractors.
CLM solution solves specific contract related challenges for KPIT
KPIT signs specific kind of contracts more frequently than others. Some include Master Services Agreements (MSA), Non-Disclosure Agreement (NDA), License Agreement, Consultancy Agreements, Sub-Contractor Agreements, and Vendor Agreements.
The conventional challenges in acting on contracts would be having an agreement on major provisions like limitation of liability, warranty, indemnity, IP rights etc. “We have been continuously seeing that, whilst most of the other items get ironed out, these 4-5 major clauses (which is where the risk lies), are always the sticky points between the parties and we have often seen ourselves in a make-or-break situation or deadlocks,” says Chipade. Each party tries to minimize its risk or get protection for itself. In the bargain, the parties often end up spending a great deal of time in negotiating these provisions. These are the most concerning provisions.
Implementation
Icertis collaborated closely with KPIT’s IT teams to deploy ICI’s native integrations with KPIT’s existing enterprise system. It was a 5-member team comprising roles of a director, program manager, lead functional consultant, senior functional consultant, and functional consultant. The team, together, was able to execute and implement the ICI platform in no more than 33 weeks.
Icertis is a cloud native solution in Microsoft Azure. This makes it highly scalable and available across the global operations and its integration capability allows to improve contract compliance and risk mitigation.
The benefits include a common repository of contracts, data available for analytics, system driven deviation approvals, all iterations at common place, system driven contract signature process, less human dependency, and obligations tracking.