Bringing Contracts to Life | Keynote session at IACCM Dublin Ireland, May 2015
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Slides presented at IACCM, Dublin to a gathering of contract management professionals. Introduced SirionLabs, and its post-signature contract management toolkit
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Bringing Contracts to Life | Keynote session at IACCM Dublin Ireland, May 2015
- 1. © 2012-17 SirionLabs Pte. Ltd. The contents of this presentation are proprietary and confidential. SirionLabs Bringing Contracts To Life May 09, 2017 PORTFOLIO COMPANY UK Government G-Cloud Supplier THE WORLD’S MOST INNOVATIVE COMPANIES
- 2. 2© 2017 SirionLabs. The contents of this presentation are confidential. AB OU T M E INDUS KHAITAN CMO SirionLabs indus.khaitan@sirionlabs.com @1ndus • Sr. Director – Oracle Inc. (Product Strategy) • Co-founder BitzerMobile, a mobile security start-up (acquired by Oracle in 2013) • Started India's first and hugely successful seed accelerator called The Morpheus • Investor, Board member • Loves steaming chai, fast electric cars, hiking with his two sons • San Francisco Bay Area
- 3. 3© 2017 SirionLabs. The contents of this presentation are confidential. PR OBLEM “Uberization” is moving economy towards procurement of services Yet existing software platforms are designed to “buy” goods, rather than manage performance of services SERVICES GOODS 3X 1/2
- 4. 4© 2017 SirionLabs. The contents of this presentation are confidential. PR OBLEM IT Contracts, and their performance live in e-mail, spreadsheets across departments FINANCE PROCUREMENT SUPPLIERS
- 5. 5© 2017 SirionLabs. The contents of this presentation are confidential. PR OBLEM $200B OF VALUE IS LOST ANNUALLY DUE TO LACK OF EFFECTIVE GOVERNANCE OF SERVICES CONTRACTS Sirion is transforming the way buyers and suppliers of complex services engage with each other
- 6. OU R APPR OAC H Algorithmically reconcile “what is supposed to happen” from the contract to “what actually happened” using live performance data Use the signed contract as the source of truth Eliminate human errors by rejecting and adjusting invoices based on “what you need to pay”
- 7. 7© 2017 SirionLabs. The contents of this presentation are confidential. WH AT’S M ISSING IN C ON VENTIONAL C ON TRAC T M AN AGEM ENT? Negotiation Contract Drafting Signature Contract Repository Contract Admin Contract Performance Relationship Management CONVENTIONAL CONTRACT MANAGEMENT VIEWS THE CONTRACT AS THE END PRODUCT OF PROCUREMENT, OFFERS LITTLE POST-SIGNATURE CAPABILITY Post-signature (36-60 months)Pre-signature (6-12 months) (Not designed to support frequent updates to the contract) Renewal and Termination
- 8. 8© 2017 SirionLabs. The contents of this presentation are confidential. B R IN GING C ON TRAC TS TO LIFE - 1 Computational Objects Key Risks • Hierarchical storage • Advanced search capabilities • Change management Contract Repository Expected Outcomes Base Charges Rate Cards SL Credits Earn Backs KPI Calculations Pricing Adjustments Regulatory Liability Indemnity Insurance Obligations Milestones Service Levels Deliverables Contract Authoring
- 9. 9© 2017 SirionLabs. The contents of this presentation are confidential. B R IN GING C ON TRAC TS TO LIFE - 2 COMPUTATIONAL OBJECTS KEY RISKS Algorithms EXPECTED OUTCOMES DATA FROM ENTERPRISE SYSTEMS Workflows Workflows PERFORMANCE INVOICECONTRACT Reports and analytics
- 10. 10© 2017 SirionLabs. The contents of this presentation are confidential. STRONG EXPERIENCE AC R OSS IN D USTRIES FORTUNE 500 AND GLOBAL 2000 CUSTOMERS Banking and Financial Services Oil and Gas Healthcare Wind Energy Insurance Telecom Information Technology Aerospace and Defence Airport Operations Food & Beverage COMPLEX SERVICES MANAGED IT BPO Telecom Facilities Management Third Party Logistics Complex Manufacturing Construction Projects Contingent Workforce Healthcare Services
- 11. 11© 2017 SirionLabs. The contents of this presentation are confidential. SIR ION IM PAC T $1B TOTAL INVOICES PROCESSED SAVINGS DELIVERED IN 2016 $68M (6.8%) 10,000+ TOTAL CONTRACTS MANAGED $3B+ TCV UNDER MANAGEMENT 350,000+ TOTAL OBLIGATIONS MANAGED
Notas do Editor
- Hi - My name is Indus Khaitan, I represent SirionLabs. We are a sequoia capital portfolio company and were rated by Gartner as a cool vendor last year. We are chasing the $2.8 billion contract and supplier performance category. 2 months ago, we were named as one of the world’s most innovative company by the Fast Company magazine. In the next 10 minutes, I’m going to walk you through why are we solving this problem. (30)
- About me in 30 seconds. Most recently, I was a founder of a Mobile Security startup. After selling the startup to Oracle, I spent two years there building their Mobile Cloud Service. My side hustle is angel investments in high-tech companies and I live in SF Bay area. At SirionLabs, I manage Product, Engineering and Marketing. (30)
- Yesterday morning I used the on-demand service Uber to reach here. This uberization of everything is also happening in companies. They are buying less goods, and more services. Organizations have bought 3 times more services compared to 20 years ago -- while the volume of goods bought has reduced to 50%. Though this change has accelerated, the procurement software platforms havent changed. The software platforms are still optimizing the “buying” process, rather than help manage service performance. To help you compare -- I’ll give you a quick example. 10 years ago, if an organization decided to upgrade to ergonomic chairs, it’d put out an RFP, select a vendor and buy the chairs. If the chairs had issues, you’d return them. Fast forward to today, the modern organization buys ergonomics as a service as a 5-year contract. How do you manage the performance of the contract, how do you make sure that the monthly invoices are correct? The current breed of procurement tools are not capable of solving this problem. So how does an organization manage the performance today? (120)
- People across departments suffer to organize the performance data from multiple teams. E-mail is a great communication tool but it’s a horrible repository of contract data. Moreover, when people leave -- their memory and experience of what a specific contract was about leaves with them. If you are looking to validate whether a supplier has invoiced you for the correct amount, the finance department has to coordinate with multiple other departments through email to get an answer. (30)
- All the manual processes, e-mails, spreadsheets, gives rise to all sorts of problem. A simple example is an invoice error, where a supplier has billed you for the wrong service. There could be other problems such as quality issues in the contract, slippage of dates, and more often than not, the contract has conditions of providing discount when the quality is not met. All these errors costs money to the organization. Based on industry estimates, it is believed that $200 billion dollars are lost annualy due to inneffective governance of service contracts. So how do we solve this issue? And put that $200bn dollars back into your pocket? (45) This number is based on $1.1 trillion service industry (IT and non-IT) and a value leakage of upto 20% which includes 12% of hard leakage (invoicing errors, over staffing), and 8% in soft (lost customer, support issues) as reported by Shelby Group and Forrester in separate reports.
- The approach of solving this is straighforward. Instead of relying on e-mail, spreadsheets and manual data crunching, use technology. We use the signed contract as the source of truth rather than an interpretation of a contract in an email. We algorithmically compute and reconcile what happened and what is supposed to happen. We eliminate human errors by matching an incoming invoice with a pro-forma system generated invoice. Taking that approach, we have packaged the solution as a SaaS product. The product enables it’s users to manage all the chaos around performance of these services from a single epicenter. The journey of Sirion user starts with importing of contracts, which are stored in the system. The contracts are broken down into structured data and tagged. Using integrations with IT Service Management systems, and enterprise finance systems, Sirion’s customers can ensure every invoice, every performance data point, every deliverable, every quality issue, every computation and every deadline gets tracked through a single dashboard and visible to IT, finance, procurement and their bosses. You don’t need to work through people and their emails to see a report and how your suppliers are performing. It’s just there. (60) In a nutshell, automate the moving pieces, put humans as an overseeing body and let machines do the talking. (45)
- Conventional Contract Lifecycle Management. The L in the lifecycle stops at the repository Once a contract is signed, it’s thrown into a graveyard. A heavily negotiated contract ends up in a place where few tread. And that’s what the previous generation of contract management tools gave us – a search at your own peril contract repository. Looking for expired clauses? Search and you may find it tucked in page 344 in Section 22.3.4.1. Whereas the contract ended in the repository – the action has already started around the delivery of obligations in the contract. Typically, the post-signature part is 3 to 5 times longer than the pre-signature. A simple IT service contract could be running for 3-5 years! It became clear to us that this is the problem to be solved – we have to extend the L in the CLM.
- So how do we do it? The Sirion platform ingests your contract, using machines and humans we break down the contract into structured data containing Expected outcomes, Computational Objects and Key Risks. Let’s quickly dril into these three: Expected Outcomes are your obligations, milestones, service levels and deliverables – These encapsulate what is supposed to happen, when it is suppose to happen. Next is Computational Objects. Computational Objects are rate cards, KPIs, price books, and other variables which govern the success and payment of the contract. For example, what would happen if the performance is not meant as per an agreed upon time window? How does the payment gets calculated in such a scenario. On the corollary, what if the deliverables are “delivered” before the scheduled date and time? The third part is the key risks which the contracting parties cover to protect their business and reputation. This includes regulatory, liability, indemnity and insurance. A simple example is regular renewal of insurance. Regular third-party cybersecurity audits. The Sirion platform breaks an unstructured contract into dynamic, living and breathing structured entity.
- What I showed you earlier is the previous slide was the ingestion part – data extracted from the contract. What was earlier a long and winding narrative, becomes an algorithmic expression in our platform. Ingestion of contract tells us what is supposed to happen – However, the other side of the equation is what actually happens! For example, if an obligation in an IT outsourcing contract says that the supplier has to respond to P0 tickets in a 4 hour window, did it really happen? We bridge that by connecting to the IT Service Management systems (in this example) where we get the raw ticket data and it’s status to arrive at the aggregate response time. This reconciliation of what was supposed to happen and what actually happens is one of the key features of the Sirion platform. We stitch a workflow consisting of organizational roles and processes using algorithms built upon the extracted computational objects and help reduce organizational risks. What comes out is a lovely visual telling you where the problems are, where potential business loss may occur and whether the supplier cohorts are performing or not perfomring in your organization. Now that you are tracking data at the atomic level, which are obligations and service level performance, you can get unparalleled insights into the performance of the contracts. Over-invoiced but under-delivered on services, boom, it’s on the dashboard – your HR suppliers performing better in EMEA vs North America for the same services? Boom, drill deep into the problem areas. These are some of the examples. Net, net – instead of a he-said—she-said relationship, your supplier conversations are data-driven on a single dashboard where both parties can have visibility.
- It’s not just us at SirionLabs saying that the buyer and supplier relationships should be data-driven. All these lovely logos you see on the screen, their vendor manager, the CIO, the Chief Procurement Officer are saying that same thing. These progressive companies themselves are participating in the subscription economy, they are not buying cars, they are buying transport as a service, they are not buying airplanes, they are buying jet-propulsion as a service. And to manage the contract and performance of its suppliers, they use Sirion. Sirion gives them a single repository to store the contracts, and a single dashboard to view the health of the obligations.. (45)
- I’m happy to stand here and say that all those logos you saw, and many I’m not allowed to show -- have made money due to Sirion. In the year 2016 alone, Sirion’s SaaS product saw $1bn worth of invoices passing through it and the system has caught discrepancies and -- $68 million dollars were added to the bottomline of these companies. Imagine going back to the CIO and saying that you are no longer a cost center, but helping the organization fundin a digital transformation project! (45)
- Thank you for your time. Summarizing: Sirion brings contracts to life by enabling a performance of contracts after they have been signed By enabling a data-driven approach for contract performance.