Customer Value Story: How to Know What You Don’t Know
After disrupting business operations across the world, the pandemic has been a catalyst for innovation. Since the beginning, LogicManager has been working with our clients to help them pivot and prepare to face new challenges, but also transform and streamline their processes in order to emerge even stronger on the other side.
At this point, we’ve collected over 200 value stories from our customers about how they’ve leveraged our guidance to drive their businesses forward throughout the pandemic and ensure long-term success and stability. This series of blog posts shares our best customer value stories to help other businesses find similar successes.
Taking a risk-based approach to Contract Management.
Financial institutions are under a lot of pressure these days. Not only are there more stringent industry regulations than ever before, but the pandemic has heightened the need for digital innovation and in turn, more robust cybersecurity practices. Managing these changes can be a full-time job, and it’s more important for businesses to rely on third party vendors to help them achieve their goals than ever before.
One LogicManager client recently came to us with a need to streamline and automate a critical piece of their vendor management program: contract management. Read on to learn how they did it using LogicManager’s AI-powered contract analyzer, as well as the short and long-term benefits they’re receiving as a result.
One day, during one of our customer advisory workshops, one LogicManager client in the financial industry responded to a poll. This champion asked about our contract AI capabilities. Given the number of contracts they were in charge of managing at the time, they needed help. They wanted to not only be able to eliminate manual and duplicative efforts wherever possible, but as a regional franchise within a larger, worldwide financial institution, it was also important that they had the ability to easily communicate internally and generate robust reports to upper management.
Related Post: Product’s Perspective: Better Together – The Importance of Using Integrated Software for Vendor Management
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LogicManager is uniquely positioned to combine our vendor True Risk data with our Contract Analyzer to provide an automated risk-based contract analysis. This AI-powered feature was a good fit for this client as it positioned them to significantly streamline their due diligence process and keep an audit trail of their work. Here’s how it works:
- The risk-based process is kicked off by the client identifying who their vendors are, and then evaluating their criticality based on their relationship to the organization. What percentage of their daily operations would be impacted if this vendor had an outage? How much sensitive information does this vendor have access to? How many employees rely on the vendor?
- From there, this criticality is combined with an external vendor rating based on third-party scoring platforms. This external rating is then combined with their internal criticality level to automatically calculate their “True Risk” score.
- This due diligence assessment process triggers a vendor evaluation workflow. This workflow will tell the system to extract contract terms based on a customized Contract Review Checklist. This checklist was created based on our clients’ unique needs, containing clauses like cost, duration of engagement, policies and procedures, right to audit, data breach notifications and more.
- The route the vendor will take through the workflow depends on their True Risk score:
- Tier 1 (High Risk/Critical) vendor contracts tell the system to pull and evaluate the complete list of clauses from the contract.
- Tier 2 (Moderate Risk) vendor contracts are taken down the same route as Tier 1 vendors.
- Tier 3 (Low Risk) and Exempt (out of scope) vendor contracts have the option to not complete the vendor checklist, but certain clauses (like regulatory requirements) are always populated.
With a streamlined, automated process for contract management that eliminates human error, cuts down on time and promotes a risk-based approach, here are the benefits this client will realize in both the short and long term:
- This client is automatically reviewing for gaps and identifying unnecessary clauses upfront. This keeps them better protected during the entirety of the relationship with that vendor.
- They are empowering their vendor team to identify issues earlier in the evaluation to expedite the legal process from start to finish. In some cases, a legal team may be able to be left out of the process entirely.
- This client immediately knows what is negotiable within a contract because they can see exactly which risks each clause helps to mitigate (or which risks become more likely to materialize due to a particular clause being in place). This can help them save money and foster better business relationships in the long run.
- Armed with the knowledge that their contracts are all adequately mitigating their unique risks, this client has peace of mind that risks will likely not materialize as a result of that contractual relationship.
- Keeping this time-stamped audit trail helps this client fend off 100% of any potential negligence claims. It also makes it easy to generate robust reports that prove to upper management that they’re doing their due diligence.
- Because this client doesn’t need to even open a contract before determining whether it’s a good fit for their business, they gain back countless hours of time to focus on more strategic work.
Want to see this customer use case in action? We encourage you to schedule a free demo with one of our risk experts today who can walk you through what our Risk-Based Contract Analyzer might look like at your organization today.