I’ve written before about contract-lifecycle-management (CLM) software. (Click here for some general thoughts on CLM; the ACC Docket article I co-authored also discusses CLM.) I’m pleased that this post allows me to revisit the topic.
During a trip to Switzerland a couple of years ago I met Chris Craddock, the marketing director of Symfact, an increasingly prominent CLM vendor. Thereafter it was, on my part, a case of out of sight, out of mind, until I was recently contacted by Harry Angel, a U.S.-based representative of Symfact. He kindly agreed to do the following Q&A.
Q: Tell me about Symfact.
A: We’re a global software company that offers complete solutions for contract lifecycle management (CLM) and compliance. We started in Europe six years ago, but we’re expanding. We opened three offices in the U.S. last year; I’m the business development director for the U.S., based in Chicago.
We have well over one hundred customers worldwide, including UBS, Lloyds of London, L’Oréal , DeBeers, and Bombardier. Because the solutions we offer are easily configured to meet demands, our customers are from many different industries. Our Symfact Compliance Platform supports any type of buy- or sell-side contract, multiple languages, and multiple currencies, and it can be customized to suit the particular needs of each of our customers. Our installed clients range in size from five users to as many as 22,000, for the U.K. National Health Service, so we are cost-effective for any size organization. About 50 percent of our clients use us for procurement, 30 percent for sales, and the remainder for both sides of the business.
Q: How would a business benefit from adopting a CLM solution? Don’t financial systems give you the same information?
A: Financial systems tell you what has happened in your company, whereas CLM systems tell you what should be happening. After a contract is signed, it’s commonplace for people to lose sight of contract terms, such ongoing obligations, deadlines, expirations, and discounts. For example, studies have shown that more than half of all companies cannot even locate signed copies of 10% or more of their contracts! And most organizations have multiple contracts with the same vendor stored in filing cabinets at different locations. Such contracts might well expire at different times, provide for different prices, and apply to different territories.
This sort of improvised approach to contract monitoring really is a nightmare. Organizations such as the International Association for Contract and Commercial Management (IACCM) have shown that by adopting an automated CLM solution, companies can save approximately 2% of their total procurement expenditures. In these tough times, that represents a significant addition to the bottom line.
The challenge in getting contracts under control is that the people with day-to-day responsibility for monitoring contract performance are typically not high enough in the organization to take the steps necessary to put the process on a rational footing. And the executives who have the power to fix the problems aren’t aware of them. The result is that money leaks out of the organization daily.
You can solve this problem by adopting a CLM solution such as the one Symfact offers. We allow our clients to create, within a secure Internet-based environment, a single highly accessible repository for contracts and all related information. They can then be alerted to deadlines and expirations and can lay out all pertinent contract responsibilities and financial drivers.
Q: What differentiates your solution from those offered by other CLM providers?
A: Our solution is the only pure XML-architected solution on the market, and we’ve built it in a way that makes it very configurable for our clients while also making it easy to implement and maintain. Most other vendors use a SQL-type database, which limits flexibility in how you organize different kinds of information across different kinds of contracts.
XML is the industry-recognized standard for tagging, searching, storing, and retrieving documents. Our solution provides a built-in repository for contracts and as well as correspondence, invoices, brochures, drawings, and any other documents relating to contracts. We use a drag-and-drop feature to make it easy to add emails to the repository. And any existing repository can include links to our contract repositories, allowing our customers to leverage past investments in enterprise content-management systems such as Filenet and Documentum. Industry analysts agree with us—an open-architecture, XML-based CLM solution is your best choice.
How our solution presents data for any given contract type can be configured to your needs. Client configuration is held separately from the core functionality of the Symfact Compliance Platform. That means future release upgrades don’t require costly custom code changes, data migration, or reconfiguration.
Q: How do you support the pre-signature aspects of contracts?
A: Our solution supports libraries of standard clauses, as well as workflow and approval processes. From an authoring standpoint, we intentionally built our solution around products that were open and already in use by contract-management professionals, including HotDocs and Microsoft’s Word and Infopath. That reduces the training costs incurred by our customers and often allows them to leverage tools that they’ve already bought and paid for.
Regarding workflow, we can support, by contract type, any process for review, negotiation, and approval. The bigger challenge here involves how our customers define the rules and approval gates. Many of our clients focus in this area when implementing our solution but end up adopting simpler processes. That’s because contract negotiations tend to be unpredictable, particularly during the final rounds just before the contract is signed—that’s when all parties start to really pay attention to the contract. But whatever your review processes, we can adjust our solution to reflect it.
Q: How does the document-assembly functionality of your solution compare with a pure-play document-assembly solution such as DealBuilder?
A: We decided early on that the market didn’t need another expensive proprietary document-assembly tool. Instead, we chose to build our workflow, approval support, and clause libraries around existing tools with open architecture that have a life outside of pure contract management. Word, SmartDocs, InfoPath, and HotDocs are examples. This approach eliminates the need for single-purpose proprietary technology and reduces user training costs. A logic-driven document-assembly solution such as DealBuilder probably provides more functionality than the document-assembly component of any CLM solution, but our clients have found that our inbuilt document-assembly feature amply satisfies their requirements. If in the future a client feels that it needs DealBuilder, we would simply integrate it into the client’s configuration and workflow for contract authoring, just as we’ve done with HotDocs and others. Symfact would be used for the rest.
Q: I’ve heard that the CLM space remains volatile, with some vendors being little more than the “walking dead.” What can you tell me about the strength of your business?
A: A decade ago the CLM space was projected to be a US$20 billion business segment by 2007. That led many startups to raise lots of venture capital, develop products with the technology then available, and build their companies around business models for that size market, with lots of high-priced sales people, big marketing budgets, and expensive services staff.
After the hot air leaked out of the Internet boom, reality set in. The market is real and growing, but it’s smaller than originally forecast. Most of the vendors have never been profitable—“walking dead” is an apt phrase. They’re now shrinking quickly or being acquired for their existing customer base. Vendor consolidation has been savage and is continuing.
We had the benefit of coming to market later, with more modern technology and a more suitably scaled business model. As they say,” The second mouse gets the cheese”!
We’re self funded, have been profitable for the last four years, and have seen our revenue increase 50% a year over the past three years. We’ve ensured that our costs have remained in line with our revenue, which allows us to be more competitive on price than vendors with larger cost structures and older products that require continued support. Our business model is much more sustainable, particularly in these tough economic times. We’re actually hiring now.
Q: What are your plans for the future?
A: Organizations are increasingly faced with specialized management, compliance, and governance needs. Our technology has allowed us to rapidly develop spinoffs from our initial pure CLM solution, all built off the same configurable platform and repositories. For example, we’ve already developed and sold intellectual-property-lifecycle solutions, as well as ones for corporate housekeeping that track filings, board meetings, votes, subsidiary ownership, banking, and signatory authority. In addition to expanding the capabilities of our platform and solutions, we will continue to develop additional complementary applications for general counsel and C-level executives as the market need arises.
Q: How can readers of this blog find out more about Symfact?