Making Digital Transformation effective and holistic requires that we optimize core business systems and processes including contract management. Beyond digitizing paper contracts, what are organizations doing to adopt digital-enabled contract lifecycle management? What needs to change in people, process, and tools? What are the related challenges and remedies?

Contributors

• • Peggy Barber, The Americas CEO and General Counsel, The International Association for Contract and Commercial Management (IACCM)
  • Saugat Dutta, Country IT Head/ CIO , DP Worldwide

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Transcript 

Sanjog Aul [00:00:22]:

Hello, and welcome to this segment on CTN. To learn more, please visit ciotalknetwork.com. And the topic for today is Steps to Digital-Enabled Contract Lifecycle Management  , and I have with me Peggy Chang Barber, who’s the America CEO and theGeneral Counselfor the International Association of Contract and Commercial Management, That is IACCM. Hi, Peggy. How are you?

Peggy  Barber [00:00:47]:

Great. Thank you and it’s a pleasure to be here.

Sanjog Aul [00:00:50]:

Definitely. And we’ll also be joined shortly by Saugat Dutta, who is the CIO for TVS Supply Chain Solutions. But meanwhile, let’s get started. Peggy, so just to set the stage, we have had discussions about contract management and contract life cycle management also in the past, but it’s been quite a few years. And now this new age of digital, things are changing fundamentally, whether you talk about how you work internally in a company or how you deal with your partners and ecosystem. And what has that done to the overall core systems, which could include these contract management and contract life cycle management related business functions. Are we just digitizing paper? Are we going beyond and trying to use the latest and greatest technologies and processes to streamline things? Is it only about cost savings or are we able to take something which on the surface would look like just a back end function, which is contract management? Can we utilize that to in fact envision growth opportunities for an organization? We wanted to explore all of that. And for that, the first question towards that, the first question from for you, Peggy, is let’s do a compare and contrast of what you saw contracts and the management of contracts related activities a decade ago versus today? What’s changing? 

Peggy  Barber [00:02:17]:

Well, so I’ll go back even further maybe a little bit. In the last 25 years, we’ve seen a major shift from procurement of really product, goods and, to the buying of services. So in 1994, for example, over 80% of what corporations purchased were goods. Fast forward to today, we see that over 55% of corporate purchases are of services. So the shift to services has accelerated, in the past decade, definitely, with the increase in outsourcing, offshoring, and then the advent of cloud. Right? Many traditional goods are now being provided as a service today. Many organizations don’t actually even own IT equipment. They buy cloud based infrastructure services. They don’t license software but instead they buy software as a service. So the shift to services means that we’re looking at more longer term relationships where we’re expecting a material business outcome which is different from really kind of purchase of those discrete goods. So as you look at contracts, they become more important in the overall process, but they become more complicated to close in some ways because we have to be far more precise about our requirements, the performance that we expect, the ability to make changes, to renew, to terminate, because they have a long term and big impact to our environment. But we need to balance that with the need for consideration of developing and growing long term relationships with our customers, with our partners, with our suppliers, as well as really reaping the benefits of cloud and standardization, which includes those lower costs and faster deployment through a shared environment. So our contracts, our negotiation strategy, how we manage contracts through closure need to be really adaptable to now a wide range of solutions and business needs. And what we’re seeing is, unfortunately, our research shows that most business users of contracts find them to be difficult, very, in some cases, impossible to understand. I’m sure you’ve heard that too. They put these contracts, sometimes they’ve done the deal and the right people haven’t gone engaged and they’re like, just go get it done so we can move forward with the deal. And the contracts just sit then in those proverbial drawers and they don’t have a good sense of what the obligations are that they need to deliver to in the contracts to get the benefits that they look for. So we’re seeing through that shift in what people are actually buying for their environment, a real need to change how you think about contracting.

Sanjog Aul [00:05:12]:

So the question that I had asked about the background, and you gave a very fascinating answer of how the functions have changed in the sense the way initially you had commodities and things which you could very easily put maybe in 2 pages a contract. But now when you’re going to the services side, it’s getting very involved. Totally see that. And the question then comes, and which is an interesting question to ask even, is the quality of the qualitative aspect of the contract negotiation or the very intent of the contract. Because earlier, very many years ago, people used to just shake hands, and that’s how business used to happen.

Peggy  Barber [00:05:55]:

Exactly.

Sanjog Aul [00:05:55]:

Right? And so then we went and said, okay. Let’s put things in perspective. But do you think this contract management space, is it rooted in distrust or trust? Is it rooted in win-lose or win-win?

Peggy  Barber [00:06:10]:

I think that trust is fundamental, and I do think that it is still missing in the vast majority of contract negotiations, contract management, as you really look at where we need to go. And also, we’ll talk, I’m sure, a little bit later about digitization technology taking over some of the work that fundamentally gets done in contracting, and the desire for speeding up contract closures and making things simple. I think you’ll see that we need to go in that collaborative trust path and that the companies that are really forward leaning and looking at contract management have already realized that. They are thinking about how best to drive speed, to drive simplification, to drive transparency so that they can actually get the businesses results that they’re looking for.

Sanjog Aul [00:07:12]:

So, let’s talk about the very aspect of compliance and the cost savings. Those on the surface are rather traditionally seen as places where we can make an impact if we did a good job with contract life cycle management. But thinking in today’s digital terms or the expectations we all have is it’s not just about same old, same old squeeze the penny. It should be about what you could do with digital, changing the experience, which should eventually impact some sort of growth or top line revenue type of improvement. Do you think is it a pipe dream to connect contract life cycle management to growth?

Peggy  Barber [00:07:56]:

Oh, no. Absolutely not. I think it’s absolutely, a growth could be a growth catalyst or a growth inhibitor. And I think many companies experience that. They may not actually see and tie it in that way, which I think they’re starting to do. So as we and I see them look at how you drive value in an organization, we focus on continuous improvement and people process technology. You hear this all the time for all business processes, and the contract life cycle management process is really no different. Our research has shown that poor contracting practices through this CLM process, can result in value erosion of 9.2% of annual revenues of companies on average. And this number is huge. I mean, 9.2% of your annual revenue. So if you actually improve your processes, you can reduce that number and actually take the money you’ve the value that you’ve saved and actually contribute to growth. So if you think about that 9.2, you add that across all businesses, here’s the opportunity. Right? And it really takes all it takes is really some thoughtful process steps to think about what data you have and how you can use that data to drive that continuous improvement. Your contracting processes and practices are robust. And if we look at, okay, in the process side, gather data to find gaps and friction points in your contracting process so you can take steps to figure out how best to drive that improvement. And you’re supporting the people that you have in their training in increasing their contracting skills and competencies, and you’re using in order to get that data really robust, technology to help you do that, you can reduce that 9.2 value erosion, get more value out of your existing contracts, and actually spend more time pursuing, closing, delivering on, new opportunities. So certainly, in my mind, CLM can certainly help a company grow significantly. And like I said, the opposite is true. If we take a look at the public sector as an example, we recently completed a cross jurisdictional and corporate benchmarking of procurement and contracting practices. It was commissioned by the Canadian government based on research, that we did with our global membership base of public and private sector organizations. What we found was that complex contracts with complex contract management was really not making the government an easy organization to do business with. And the result is that suppliers were just opting out of bidding on government procurement altogether because of the complexity, the red tape, whatever the case may be. And this is even before they go into that tender negotiation and management space. In that case, the market growth and competition are stifled. Your innovation stalls and value leaks and everyone suffers in that environment.

Sanjog Aul [00:11:04]:

Okay. So we have Saugat, who has just joined us. Hey, Saugat. Dutta, is the individual who is the CIO of TV Supply Chain Solutions. Hey, Sagat. How are you?

Saugat Dutta [00:11:15]:

Hey. Hi, Sanjog. I’m fine. Thanks.

Sanjog Aul [00:11:17]:

Great. Great to have you. Yeah. So I think you must have just listened to the last response from Peggy about how CLM, contract life cycle management, if done well, could actually help you in growth. So let’s see since you’re the CIO of an organization, which I’m sure does a lot of contracts with a lot of different companies, tell us about your experience about how your organization see contracts and their importance in the way you run business and the way you grow business.

Saugat Dutta [00:11:53]:

So, thanks, I heard the conversation. Those were very valid points that she did outline while she was mentioning. But, as you rightly mentioned, contracts have become very essential to bring in the transparency within the organization. So within our organization, we feel that there were a lot of transparency which was missing earlier. It was due to a specific set of people, individuals, and then it used to become a bit difficult. So with CLM coming in place, we have seen there has been significant amount of transparency that has come into that organization. And also, there is a control that the CFO can make based on certain decisions that a CLM captures in terms of certain data points. So these are two things that I would like to add to what Peggy had mentioned, and that’s about it.

Sanjog Aul [00:12:57]:

Okay. So coming back to you, Peggy, when we are trying to look at that erosion, which you mentioned, 9.2, if I remember it correctly, could you attribute that to certain specific areas which were not tackled properly when contract life cycle management was suboptimal?

Peggy  Barber [00:13:19]:

So I think we have certainly done research in the 10 pitfalls to avoid in contracting that we have really put out there since I think it’s been out there since 2015. And some examples are things like, are you negotiating over the right issues? Are you bringing people in, stakeholders, the negotiation teams, and the right people in at the right time? Is there proper handover, when you’ve negotiated what you need to the people who actually need to deliver? Is there understanding and clarity of understanding of what is actually the outcome that’s desired and what has been agreed to in terms of the requirements of what you need to do to get there. Is that being measured effectively during the post contract process? And is the data that you’re getting, are you gathering the data in terms of performance, in terms of are you negotiating issues that really don’t matter in the post contract? Are you spending a lot of time doing that, which slows down your revenue, slows down your ability to bring right solutions into your environment. All of that slows down and either slows down the process of getting business done or erodes your ability to get to the actual outcome that you want, which contributes significantly to that 9.2% erosion. It’s all the value you could get if you had it operating the way that it should.

Sanjog Aul [00:15:03]:

So, Saugat, when you have attempted so I’m sure you did not just get started with contracts. But have you actively or intentionally gone after optimizing this process? Because you could keep it very paper based and not even if it’s electronic, the workflow could be very ad hoc. Is that an area of focus when you’re trying to streamline the business and not just because you want to automate things like a typical IT function, but more so looking at it strategically because it has a direct impact on how quickly you get some contracts done, but also, more importantly, how you create a win-win type of an environment among your partner ecosystem.

Saugat Dutta [00:15:49]:

Yeah. So, Sanjog, as you’ve frankly mentioned, we are a supply chain consulting as well as a 3PL organization. So for us, most of the OEMs, they outsource the business to us based on the fact that we would be having better negotiation power with some of the suppliers, the direct purchases and indirect purchases that we do on behalf of our customers, those would be significant. So for us, it’s all the more important to have the robust workflow in place. That is one thing. The second part of it is to gradually digitize it. Having said that, today, if you ask me, we are still remaining certain processes, integrating the complete procurement process as well as the finance process and ensuring that because, over the last couple of years, we have been growing enormously. So a lot of systems were being disparate, systems were being used. So first of all was to have one common ERP and one common financial accounting system. Once we laid the foundation, then we started focusing on our contract life cycle management application, which would typically help us identify the loopholes and plug in those loopholes by getting the visibility of the direct as well as indirect spend and also improve the bottom line because any money spent within the organization and if we are able to save that, track that, save that, and then pass on the benefits at times to the customer because some of the engagements that we have with our customers are typically skewed towards a gain share model wherein we take up the complete supply chain or the logistics for our customers and then we try to optimize that. And one of the key aspects in optimizing it is through a smart contracting. So earlier when we were doing this and when the processes were manual and the systems there were different systems. The same contract was existing with one of our sister concerns, the same contract was existing with the same vendor, different contracts were existing. So we didn’t have any visibility. Gradually, what we decided is to have one common PR and then one common contract life cycle management application that will help us integrate this whole thing, bring all the vendors. We did a project, in the whole area to ensure that some of these vendors and some of these contractors are getting consolidated. And then through this consolidation, we arrive on the derive the significant benefits that we have to do. So that is how we have been doing it. And having said that, this is one of the areas, or one of the business lines for us wherein we do a buy and sell for some of our customers. The indirect purchases for some of our customers in US and Europe. We do some indirect purchases or indirect procurement on their behalf. The vendors are also suggested or nominated by us, and we take a bind from our customers because we have taken over the complete supply chain on their behalf, and we act as a four PO for them. So all these things add to a different business line for us and also ensure that we are able to direct the designated results or the aspired result that we would like to do. So I think it is definitely helping us. But having said that, it’s a journey that we have taken, and we are expecting some significant return down the years from now.

Sanjog Aul [00:20:00]:

Let’s take a quick break. Let’s turn to the right back. And when we come back, Peggy, I’d love to start with you on exploring or rather inventorying the top new candidate areas that we should be looking at in terms of rethinking contract life cycle management given the new brave digital world we live in? What does that mean? What does digital mean in this space? And what are the opportunities for us to cash on? Please stay tuned, listeners. We’ll be right back.

Sanjog Aul [00:22:28]:

Welcome back. So brave new digital world, and we’re talking contract life cycle management. Given, Peggy, your organization talks to quite a few companies and helping them figure out how they could harness the value of digital, what’s on the table today for us to grab?

Peggy  Barber [00:22:49]:

You know, there’s a lot out there and I think that technology over the past 10 years has exploded in the contracting space and that’s all because of I think a true recognition in the value of the underlying data that now resides in our contracts that can be used for a wide variety of business purposes within and outside of improving the contract life cycle management space. So if you think about what was just discussed in terms of digitizing contracts just to be searchable, making sure that they’re all on the same database. You know, those are things that are now things that everybody knows is standard. But if you really look back and consider why you enter into contracts in the first place and how you want digitization, automation, and the like to really help you achieve those goals, you really should look at how the transactions that you have, what you use them for, how risky are there in your environment and your ultimate goals for them. So we see in if we look at transaction types that are typical in the environment, there are some purchases that are really critical, but they are low risk, high volume for which you are really driving that speed to contract and ease of doing business. I mean, I think everybody wants those, but in those situations, you are going to look at that a whole lot more. So you would look at things like, can we do this type of contracting with a lower touch or no touch? That’s certainly one of the conversations being had is how do you enable businesses to close contracts without the need to engage a whole lot of other people in the space where they can really run and manage those themselves. If you look at how to again drive that speed, we need contracts actually to be really simple, market competitive and supported by technology and digitalization and processes that drive that continuous improvement. So you look at are you negotiating your clauses, and which ones are you negotiating the most heavily should you be? We have a report that talks about really where people negotiate most heavily and what disputes actually happen at the end of after contract execution in that delivery phase. Are you matching those to see where you should be paying attention and spending your time upfront in the negotiations? Are your templates the best that they can be? Are they benchmarked? Are they market competitive? So when you digitize, as you look at digitizing your contracts, are you just turning them into electronic format that you can search? In which case, they don’t do as much for you as if you actually look at that data and use that to figure out where you should spend your time. And I focus on the lower end part of the lower risk transactions, but simplification is something that you should want to do for your highly strategic transactions as well because they drive clarity and enable those who actually manage your relationships long term to actually use contracts to achieve the intended outcome. As I mentioned before, many people who are actually in the delivery phase don’t use contracts. They don’t actually know what it says, in which case, we’re spending a lot of time putting documents together that could really help the business. And so the question is how you actually structure those contracts to be simple, to be fit for purpose and then digitalization actually can help drive a lot more of the results that you’re looking for.

Sanjog Aul [00:27:08]:

So Saugat, when you look at, based on what Peggy mentioned as the areas where we could leverage digital to enhance value from contract lifecycle management, what additional opportunities for value creation have you been able to identify as you look at your business?

Saugat Dutta [00:27:27]:

Yes. So a couple of points that I have. So I think Puneet has already covered that contract cycle time is getting to a greater extent through digitalization. There is also a boost in the workforce productivity that also helps us gain the visibility into the contract risk and opportunity. It would also help us create more profitable agreement because honestly, when it used to be lying across several documents, I have personally experienced that very few people read the complete document and most of the people rather miss out the most important thing that I’ve mentioned in the contract and which is mutually beneficial for both the supplier as well as the organization who is doing the contract with the supplier. So that is part area. If it helps us ensure that it meets the contractual obligations and the milestones and towards the end of it, deliver an effective view of each business relationship. So these are some of the points that I think are critical which through the implementation of technology or a tech based or a smart contract, if I have to say that, through this, we can achieve some of these things very effectively.

Sanjog Aul [00:29:06]:

So, Peggy, when you are to look at one, you, of course, mentioned about the opportunities where it can really create value. But let’s also then talk about the chronic areas which we have always struggled with when it comes to CLM. Which are those? And also, besides that, looking at the opportunity of what digital brings, what are some of those areas which we can fundamentally reset and rethink so that we get over those humps?

Peggy  Barber [00:29:39]:

You know, I think as we look at contract life cycle management, I think one of the actual real challenging part of it is that it is usually done in silos, right, in different groups that do different things and they don’t link well together. And so, in most organizations, there’s not one group that owns the end to end contract life cycle management or end to end contracting process even before you get to management of the deal post separation. So how to actually bring it all together is one of the key challenges that organizationally before you even get to digitalization. And when we talk about then chronic areas that we need to focus on, there’s also the link of the contracting process to actually your overall objectives and strategy of the company. So many times I think, one of you made the comment that contract life cycle management considered a back office function. And so it often just sits kind of in that silo all by itself. And so as you look at areas, we can talk specifically about, okay, is it in the negotiation phase? Is it in the deal setting up phase? Is it in the management phase? One of the first things is, do people who are in that process, do you know even who they all are, first of all? And do they understand what they do tie to the success of the business, the 9.2% and all of those, conceptually, do they understand that what they do matter, significantly, and contribute to that greater good. So I think we need to start first with how this particular contract life cycle management process ties to the company and ties to other things and then leverage that data that we can get objective data rather than anecdotal data to make decisions on how to drive to the objectives. So if you take, for example, a company that is absolutely committed to ease of doing business, they’re out there in the market talking about how they wanna be a company that is trusted. They wanna be a company to be great to do business with, in terms of its mission, its brand, but then its contracts are long. They’re difficult to understand, and their negotiation tactics just really drive third parties insane. So if you want to know and you want to transform your company, so you step out of just looking at contracting, but looking at the goal of your company, your contracting strategy and your contracting approach and how you actually approach dealing with third parties should reflect that, and how you want to be perceived. It is not separate and independent. The opinions of the third parties you deal with, your internal business teams, your teams that actually do contracting, and your legal functions, your procurement functions, and the like will give you a good idea of where you may have gaps and friction points that need to be considered as a priority. Companies are different. Every company has a different set of concerns, but there are two that typically come up frequently. One is it takes too long to get things done, and the second one is the business objectives that we really intended to achieve were not achieved, and why were they not achieved. So those are always the areas people are like, it takes too long, and I didn’t get what I want. Right? So that’s part of what you’re trying to do. You really can’t get to the right solution to address that unless you answer some really basic questions like, where are you seeing the delays? Is it the approval process, the negotiation process, the signature process? And if the delay is, let’s say, in the negotiation process, are your team members using the wrong template? In which case, maybe the solution is a decision tree. Let’s make it a simple decision tree. You can automate that, go in, put your deal in, and then it can help direct you to the right template to use. Or you’re negotiating the wrong issues and the same issues over and over. You know, maybe leveraging our research on top pitfalls to avoid or our contracting principles which intend to define fair positions on frequently negotiated issues like liability, indemnity, ownership, audit, privacy, and the like that are typically coming up. But then some of them don’t make a big difference when you are managing the relationship, and you know you’re gonna end up at the same place almost every single time. Right? And some companies haven’t looked at their templates for years in terms of whether it is reflective of what they’re selling today or market competitive in terms of what they’re selling today. So taking the time to benchmark your terms against the market could really help you identify areas that would be most specific to you and the biggest bang for your buck.

Sanjog Aul [00:35:20]:

Saugat, do you wanna add to the list of anything that you’ve seen which you struggle with and or what you have, if fixed, has really given you a quantum boost in this space?

Saugat Dutta [00:35:33]:

Yeah. Sure. So in our organization, I would say that most of the organizations which are into some of these smart contracting, the end objective is to bring in simplification, standardization across the views so that once we have the processes laid thoroughly, then it is just a matter of implementing the right application towards it. So these two things actually play a critical role because most of the times we’ll see that the majority of the productive hours are borne in going through certain documents, overlooking some of the important clauses that are required for the contract and towards the end of it, the regret as to why these points were missed out in this whole contracting. So for me, the simplification and the standardization are the key aspect wherein a smart contracting would actually help bring in the efficiency.

Sanjog Aul [00:36:58]:

So the next step, what we are looking at here is, okay, you have a tool or you’re gonna use some technology. But let’s look at the underlying processes. Peggy, would you say that there are certain low hanging fruits in the way the whole contract, life cycle management is handled or different elements of that are handled? And there is inertia because of which people don’t change the way they look at things, the processes and workflows, which you feel they should be going and tackling first. And that could have a huge impact on how subsequent use of digital technologies would be most effective.

Peggy  Barber [00:37:42]:

Yeah. I think that’s a really great question. I do think that many people look at technology as a solution, but they haven’t quite defined the problem yet in their environment and or they know that there’s a general problem, but they haven’t actually gotten to the root cause in order to find the right and the best solution for the challenge that they have. And so, as you look at we go back to the people, the process, and then the technology that support you. Technology really should and digitalization, all of that should really be a support for the process and the people that you have. And so it, in my mind, is critical to understand where your biggest gaps are in your environment. And we can make some generalizations across all, which I think I did earlier a little bit in terms of hey, you can look at speed and why are things taking so long. We can talk about why am I not getting that business outcome. It really could be simply that nobody’s looking at your contracts. Right? Nobody is using it. It’s not designed to be used. It’s written. The right people weren’t involved in actually crafting it. They’re not involved in actually in the handover process. There isn’t a handover process, and then there’s no tracking to outcome. So one of the biggest bang for your buck in some case in some sense is how do you drive to speed so you can free up time to go do things that are to pursue new opportunities or to manage the opportunities you have to achieve the results you want or even better results. And then secondly, to actually have people who understand what you negotiated so that they can actually manage to that. Those are two very basic low hanging fruits. If you don’t measure, you don’t get the result that you’re looking for. And if you don’t tell people what you’re measuring, then you’re very unlikely to get that result.

Sanjog Aul [00:39:58]:

So, Saugat, when you are looking at the people side, I will we’ll take a quick break, but when we come back, I wanted to set the stage. When we look at the processes like, Peggy mentioned about specific areas where they should fix the processes part or rethink them. People become an interesting area for us to tackle because, again, there’s inertia or there’s a mindset and not only just people from our organization, but the very other parties that we are dealing with. How do we deal with the people side of things when we are talking about CLM? Please stay tuned, listeners. We’ll be right back and explore.

Sanjog Aul [00:42:26]:

Welcome back to the show here, folks. So Sagat, we did speak a little bit about the processes and where we have to rethink and reset, but all of that would frankly fall down on its face if our people were not on board and or are not keeping up with the enthusiasm and the focus they should have to fix this area in the interest of business where the business needs to go. If there is anything not in alignment, then all of these efforts are just spinning our wheels. How do we prevent that, and what are your people issues that you feel you have to tackle before we can move forward?

Saugat Dutta [00:43:07]:

Yeah. So, Sanjog, my experience is that for any tech implementation, the ground rules still remains the same. You know, it’s people, process, and technology. So having said that, people aspect is one of the most critical aspects of it. And you have hit upon this point very well, and the question is also quite interesting. So the people aspect, as you’ve rightly mentioned, so many folks do not like some of these things getting implemented because that would bring in a lot of visibility within the organization. And the questions would start coming up. Earlier due to all the manual contracts that were prevalent in place, a lot of these things were getting hidden. But with the advent of technology and the implementation of the right CLM, the right stakeholders would start to ask questions based on the data that is getting captured within the system. So having said that, this is a change management trick, and I strongly feel that there has to be a strong sponsor within the organization to drive this. And because he or she would understand the business benefit of implementing a CLM and how a smart contracting will add to the bottom line of any organization. So it’s a team management process, but middle management as well as, at times, the users who are doing this contracting, there has been some resistance. But we can do these implementations once we have the buying from the right stakeholder and also incentivize some of these initiatives within the organization. This has worked well for some of the implementations that we have done, and I’m open to hear some other comments on this.

Peggy  Barber [00:45:18]:

Yeah. I love this topic of people because it’s interesting, human nature being what it is, we’re comfortable with what we know. And so we often find people who have been in and doing contracting work that come from all sorts of backgrounds, but then they get comfortable in this environment because it is very complicated. It’s very interesting. Things are always changing. You’re having to figure things out. And sometimes people forget that just by working in an environment long enough to get comfortable, that means you’re an expert in that environment. It doesn’t actually mean that you’re an expert in contracting or that what you’re doing today will always be valued tomorrow. So one of the biggest challenges and complaints we hear are things are slow. And why are they slow? Sometimes it’s because we’re used to doing the same things over and over. And as we look at the digital age, the reality is that repetitive activities will be replaced by automation. That is a fact. It is going to happen. So how do you support your people in that transition? First, to help them understand where automation will fit into their life, not necessarily replace everything that they do, but that they will actually benefit from what automation will bring to them because it will actually help them do their jobs better, more effectively, and actually turn them to work that will be more interesting. And if you think about just what they need, whether it be increasing skills, we are focusing a lot more on the soft side of the skills, the people, the organizational culture, the leadership and collaboration that is necessary. I think a couple of things, I think it’s the Organization for Economic Co-operation and Development predicting that 40% of jobs will be eliminated based on automation. So we need to prepare people for that eventuality. They may be scared, but prepare them to be more comfortable with technology to using technology. And then also, I think it’s the World Economic Forum that calls out the need for people to be problem solvers and have collaboration skills. And those are things that if you’re a good professional in this contracting space, you already have that skill in having to kind of learn in this environment. They need to be comfortable in trying to figure out and ask the right questions of what the data can get them. And so I think this whole helping people through this, there’s a great future ahead. It’s just a matter of how to get their hearts and minds there.

Saugat Dutta [00:48:33]:

I would just like to say one of the most valid points that she has mentioned over here is to collaborate. So that is across the organization, across the level. That is one of the key things, which would be a critical role in this people aspect of it. If people start collaborating, half the job is done. Most of the most difficult part is to make them collaborate across the organization across the different departments within the same organization or at times different organizations under the same group.

Peggy  Barber [00:49:13]:

And I think it’s really interesting that we have people who, because of the complexities of our internal environment, especially in large corporations or in government, know how to get things done, and they need to turn that thought into what I’m doing is actually getting things done, or am I doing it in a collaborative way? And then also turn that externally, and thinking about the benefits of collaborating and jointly achieving goals. I think most people already have that skill and need to turn that thought to deal with and understand the realities of where we’re going.

Sanjog Aul [00:50:00]:

So given that both of you, of course, emphasized that the people side is very important, but one quick thing I wanted to touch on is the leadership. So people below would, in a way, emulate or follow the leaders at the top. What kind of leadership environment or rather leadership style would lead you to get your core functions like contract life cycle management and maybe even take, say, general counsel, who you I think that’s the role that you played, Peggy, for many years, and also the IT leaders who will be leading the charge from an IT side because digital is involved and your operational leaders. What kind of leadership style should they exude for this to work, this contract life cycle management, to get to where it is supposed to? Saugat, very quickly, 30 seconds. What would that leadership style look like? I would say a collaborative leadership style would help. Having said that, there have to be some certain checks and balances if suppose that is not working well, then I think, at times you have to be autocratic as well.

Saugat Dutta [00:50:55]:

Okay. That’s a good direct input that you’re giving. And, Peggy, what about your thoughts on that front?

Sanjog Aul [00:51:09]:

I agree, leaders need to learn and be able to exhibit that they can collaborate with others. They can collaborate with their colleagues. They can collaborate with people in other companies, but they also need to exhibit their belief in whatever the cultural strategy is for the company. Again, if the brand, the strategy is simplification, they need to embody that, and they need to support that throughout their organization to make that a priority.

Peggy  Barber [00:51:16]:

And one final question for you, Peggy. If we are to move forward with this, given that CLM is the space that you live in and you evangelize doing it better, what’s ahead of the curve that we should be ready for? 

Wow. What’s ahead of the curve? There are tremendous value that you can get from data that will change behavior for the future. Trust, collaboration, those are all the things that we talk about, but we don’t quite get there. And the fact that you have automation and data, and people who are using it now in ways that you would not believe, I think you really do need to, as a

company, embody that trust, collaboration, transparency to get to the end goal of having that successful organization. I think that’s the future in terms of what data and digitalization, automation will get you is the data you need to then drive trust, and long term business success.

Sanjog Aul[00:52:39]:

On behalf of the show and our listeners, thanks so much, Saugat and Peggy, for sharing our insights on how organizations can fundamentally rethink their processes and workflows, work with the people and help them see the value of how contract lifecycle management can help them reduce the leakage which was 9.2% if I remember correctly, Peggy, and then, of course, use the technology in the best way possible, introduce it in different aspects of how contract life cycle management is to be, enabled digitally to get the most value. So thanks so much again. Thanks, Sauga, and thanks, Peggy.

Peggy  Barber [00:53:39]:

Thank you.

Saugat Dutta [00:53:40]:

Thank you so much, Sanjog. Thanks

Sanjog Aul [00:53:43]:

And, listeners, please like us on Facebook, search for CTN, CIO Talk Network, and be sure to follow us on Twitter and LinkedIn. Thank you again for listening to this segment on CTN. This is Sanjog Aul, your talk show host. Till next week, take care, and God bless.