How to extract values out of your vendor contracts?

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Welcome to the Did You Know Podcast by Varisource, where we interview founders and executives at amazing technology companies that can help your business save time and money and grow. Especially bring awareness to smarter or better faster solutions that can transform your business. 1.3s Hello everyone. Welcome to another episode of the Digital Podcast with Varisource. This is Victor. I'm one of the co founders of their source and today I'm excited to have Thai with Contract IQ with us. Ty is essentially a consultant that will help turn your contracts into a value center. And super excited to have the discussion because that's actually one of the key reasons why we started Varisource. So when Thai and I met, really had some amazing discussions. She has such a tremendous knowledge base and experience and the whole not just procurement, but contract and legal and then everything along with it. So a lot of amazing questions ahead of us. But time, why don't you give a quick kind of intro of yourself?

Yeah. Thank you so much, Victor. You could see the smile on my face from that intro, but thank you so much for that introduction. So my name is Tyja Dickerson and I am the Chief Process Officer at Contract Consulting and Contract IQ. And Contract Consulting is really kind of our service site focused on, like you said, consulting, strategic consulting, readiness consulting for our clients. Our current scopes right now focus on web three and contract lifecycle management. And then on the contract IQ side, it's really focused on digital contracting solutions. So that's going to be like our product side and we'll be actually rolling out our products soon. And it's really focused on transforming how companies contract today to be more digital and strategic through automation, smart contracts, artificial intelligence, and web three. So we are a huge 1.2s fan of contracts and the power of them within organization. So our real drive and motivation is for companies to. 1.6s Really extract the value that they have hidden in between their contract pages. So thank you so much for having me today.

Yeah. So you mentioned all the right and hot keywords or web three and AI. I'm just jumping at the bit to ask you so many different questions, but but obviously, 1.2s I know you were a practitioner, and I think a lot of people, entrepreneurs or founders, started out this way, where they were working for enterprises, and you learn a lot of these organizations. Right. They're big. They've been around a long time, and you start to see some challenges that they face. And you talk to your peers, and they all have the same problem. You're like, Wait a minute. Like, there's got to be a better way.

Exactly.

You kind of give us that little background of your experience, and what made you what was the AHA moment where you're like, you know what? I need to go out on my own and fix this problem, I guess.

Yes. No, I appreciate that, and I think you're right. We kind of all start off in that manner, and I think that that's where a lot of innovation happens, is. 1.3s Being in the operations and seeing the opportunity. So in my experience, I've been with Fortune 500 companies and I really created hats in between legal contracts, focus negotiating, 3.1s managing up to 740 a million dollars worth of spent. So really having a lot of contract negotiations, strategic negotiation experiences, and then flipping over to the procurement side. I've been in category management to strategic sourcing to supplier management. So really understanding on the procurement side the value of procurement, strategic procurement, and how to really tie in and unlock that value into contracts. So I have been engaged with contractors, contract management solutions probably maybe twelve years now. My first introduction was Ariba's contract management solution. And I don't know if you've ever seen it, but you know, they probably had. 1.5s At the time, one of the most well known solutions because it was also tied into Si P. And I was part of the Integration and Customization team while implementing that solution globally. So I got a lot of experience there. 1.1s And what the companies found out is that 1.2s Ariba's contract management system wasn't built for full contract lifecycle management. Right? And I think that we see that with SAP's partnership with Icertis today, they actually have Icertis as their contract lifecycle management solution, so they're not even using their own solution. So because of the hurdles that we had with arbitrary contract management solution and it's still good depending on a company's needs. But when you're looking at full life cycle, what we realize is that we didn't have something on the back end. What's helping us with the data? What's helping us with the analytics? How do we connect these contracts to give businesses the visibility that they need to make strategic decisions? Especially when you have, for example, supply chain shortages, you need to unforced major occurrences that people have been seeing over the last couple of years. You need to know fairly quickly what relationships you have rights or obligations to. And when you're dealing with solutions that don't give you that data at your fingertips, you're really left to kind of firefighting and being responsive to the environment. Right? So I led, along with a technical partner, we led the development of a post execution contracting tool, which essentially would help in the negotiation process of the tool, but essentially extract key data from the contracts that were negotiated so that way that we can actually feed that to the business and procurement. And in the first. 1.7s Quarter that it was rolled out global because then it was rolled out globally. In the first quarter, they were able to identify over $500,000 worth of missed rebates. So because of so many changes in the environment, it was is overlooked. Right. And so that's the thing. When you have data and automation, you don't have to leave it to certain knowledge that sometimes only people are holding. You have this full visibility and can cross your t's and dot your eyes to make sure that you're mitigating risk and taking advantage of the opportunities and rights that you have secured in the contract. So that's a long story. No,

this is why I love our founders. They're so passionate about what they do. And you sleep and eat it, breathe it, and that's what made you a good founder, to solve this problem. Right. And I totally understand the passion, 1.3s but for me, I want to break things down, because a lot of the listeners may not be contract experts, they may not be a procurement, and they might be business owners. It could be SMB, it could be mint market, it could be enterprise. And everybody have different resources. But the one thing is for sure, they all have suppliers, they all have contracts. Right? Small, big, doesn't matter what you spend will kind of come back to these topics. But can you give us a couple of examples of the type of data again? 1.2s Obviously in the enterprise world is very different than even SMB or mid market, but from a contract perspective, it's similar in that there's a lot of data points on these contracts, but when we speak to these things, we're in it every day, so we know. But you kind of explain in a simple way what type of data within a contract do you see that are valuable, that maybe companies of any size are simply just not understanding the data, or they don't understand the value of the data? Right. Can you kind of give me a couple of examples? What type of data and what are the value of those data?

No. Agreed. And I think that you're right. When it comes to contracts, it really doesn't matter. Big or small companies are really dealing with the same sort of issues. At the very basic level, you need to understand for I'll use the procurement side. Right. But I think you can flip it on its head and look at the sales side as well. For every dollar that you're spending, do you have a contract that manages that relationship? Right. So, for example, if you spend this, if you purchase a product or a service and you're not satisfied with it, what remedy do you have 1.3s beyond Atlaw to engage with that supplier? Right. So many times, if you don't have any contract coverage, you're really at the will of the service provider. So at the very least, the data point that you want to have is understanding. For example, where are you spending the majority of your money? 1.2s And if your money is being spent on, for example, these ten to 15 suppliers, do you have contracts for all of those relationships to, you know, kind of give guardrails on how you anticipate things going, what things that you need from the relationship for it to grow and to mitigate any risk of things going wrong. So at the very least, the data point that all companies should have is, do I have a contract for my top spin? 1.9s The next data point I always recommend is, for example, that same criteria. When are these contracts going to expire? Because what you don't want is for certain relationships to auto renew. So you need to have data points that trigger you to terminate or give certain notices or to do the opposite, extend the relationship. So I think that those are basic level data points. Every company should have to have visibility. Okay. 1.6s

Yeah. So here's the billion dollar question. Billion dollar question is it makes sense, right? It's kind of like, hey, if you have a house, you should know 1.8s how much you spend, right? Meaning your biggest investments in your personal life or business, you should have a good grasp on those top spends. And so the things you're mentioning, well, you should know if you have a contract, you should know when those expires sounds. Like, of course you should. But obviously, as we work with a lot of clients, whether small or big, we know that they don't. And I'd be curious to hear your feedback as you talk to customers of why do you think that is? Why do you think they may have some info? Some companies have no info. They just never kept up with it. Because these companies are out there trying to run the business, right? Like, that's what they're focused on. So it's not something they think about every day. Fair enough. But some people don't have any info. Some people have some info. Yes, but why is that? If it's something so important, it's also just like you should have it. Why do you think people don't have

in my opinion, I think that structurally legal and contracts has always been siloed from the business. 1.6s Right. It's the things that the attorneys or the contract professionals work on. And when they do their work, they get to make sure that the contract is signed and then they keep the recording of it so it stays siloed instead of it being part of the business operations. Right. And I think that that the outgrowth of CLM because you're like, okay, now we have all of these contracts, but what value is it giving to us after it's being signed? It essentially kind of just sits there until something goes wrong. But there's so much information that can be driven from the contract. The short answer is that it's been siloed and legal. Right. And I think that as companies are transforming their digital strategies, we'll see contracts and legal teams become more core to the organization because they really do mitigate a lot of the risk and enforce compliance and protect organizations. Right. So I think that it's the tradition of keeping the contracts and legal separate from the business. 1s That has created this gap. Yeah. So we talk about this CLM couple times. And I know for those people that are not procurement contract 1.4s experts, what does it stand for and what is it to kind of educate for people? And you had a blog or post that I read that was so fascinating that I want you to kind of talk about, which is, first of all, what is the CRM? What does it do? Why do people have it? But then you talked about the top five reasons why CLM fail. And that is such a fascinating topic for me because I see so many customers buy software because they want to solve the problem. The problem is 1.9s it takes them more work to use the tool than the tool provides a value or it takes a long to implement it. And that becomes it's kind of like now the tools working, you not, you working the tool. 1.9s

And that's interesting. I love to get your feedback

on that. You ask all the right questions. Victor for CLM stands for Contract Lifecycle Management and it basically manages I know you've probably seen a lot of other 1.9s sections of organizations into in cycle management. So this is basically what Contract Lifecycle Management is, starting from the initiation of a contract all the way to its termination. The contract is actively managed and visible within the system so that there's transparency. And then now on the back end, you have data elements that you can use to integrate with other solutions. So basically it allows in my words, it allows the contract to live and stay alive, is a living, breathing document that a digital tool now gives visibility to. And you're right, I think that there especially with. 3s The pandemic and a lot of remote working. You know, contract lifecycle management tools have become a hot topic. Everybody's running for clem we need a CLM, we need to have visibility. We need to have all these things. The problem is the first problem, and this is why Contract IQ was initially focused on readiness. You can't go from very manual processes all the way into a now robust solution. There is a bridge or shift that needs to happen for you to really successfully implement and utilize a tool like CLM and, you know, really kind of giving. One of the reasons is that, you know, you need to do the shift. You really have to optimize your organization, centralize your documents, figure out how you want to be successful in the future, and then build a tool to really map that way. Unfortunately, I think that CLM tools are oversold on what they can do. They don't tell you all of the expectations that the CLM tool needs. Before you move in, you hear about this amazing CLM tool and it's going to change your organization. So you get it and then you realize that. 4.1s It requires so much change and people just kind of decide they don't want to use you. You're requiring me to do more work and more effort with the tool than what I was doing before, which and some of them are not really user friendly. Right. It really not intuitive to people. So I've even heard that people feel like someone's monitoring what I'm doing. So people aren't sold when they start using it on the value that they're getting because it wasn't built customized to meet them where they are. 1.2s

Yeah. So do you feel like is it a tool that's mainly for procurement or is it mainly for legal more? 2.2s

So if you ask Legal, legal will tell you that CLM is built for legal 1.3s to support 1.3s other business functions. So really CRM is a buy side and sell side solution for contracts and the legal team supports it because they're one of the components that will collaborate in the tool. So on the buy side, you'll have your sales team and your operations on that side working with legal and the tool. And for example, DocuSign is big on the sell side of contract lifecycle management or you can have the buy side of it with legal. So it's not a legal tool. And in my opinion, it should be moved away from legal and really made to be a business tool because multiple groups, big groups within organizations, function within the tool. 1.7s

Yeah. So one of the things I've waited all this time until we have a podcast to ask you, because I know you have so much, probably feedback on this. 1.4s I'm trying to see if you have 1.6s experience with how a supplier has taken advantage of customers because of the contract. And again, I say that to say a lot of the listeners, they don't have procurement. They don't have it. They might be business owners, they might be stakeholders, but they know they buy stuff. But they never looked at the contract as a living, breathing thing, like you said. And by the time they want to activate it or go back and look for it, maybe they got auto renewed, or maybe they got taken advantage already, or maybe they don't have to read it, like the information. But I'm more curious about, have you seen where suppliers, purposely or not, maybe use the contract to really take advantage of clients that the client may not even be aware of, that they're really being taken advantage of? 2.3s

I think that is kind of a broad question you're asking a person that deals with contracts. So I'm kind of a little hesitant to answer. But what I will say is sometimes I think maybe the question I would like to answer is what happens when you don't have disability over the contract, right? What can the supplier do or the client do that you're not aware of? And I'll take it all the way down to the operations level because I've dealt a lot with the operations and I think that that's really where the business is happening, right? Where those people need to understand what rights and obligations that they have. And sometimes when, for example, if you get poor delivery, delivery not on time, services are bad. Sometimes when you don't understand what rights you have in the contract, you're really left to the other party many times to tell you what that is, right? So many times you can have where it's like, okay, well, we bought this part six months ago and now it's giving us issues. Well, the other party could say, well, you only have a 30 day warranty, but maybe in the contract and maybe it's not done by fault, maybe they generally negotiate a 30 day warranty, but maybe with that particular company you have a twelve month warranty. Right? But because no one has that visibility or no one that quickly has that visibility to the contract, you essentially leave money constantly on the table for these kind of blind spots. And that's just a one off. But when you get into the operations, it happens quite often, right? 2.6s I saw this during the pandemic when companies were declaring force majesture, but you don't know what force measure clauses that you have and so their requirement regard, there's a structure to force measure where you have to wait a certain time before you can claim or declare force maje to be released from obligations, right? If you don't have that visibility, you can just say, hey, I have forced mass and. 1.1s Then move forward and then you're released from responsibilities and companies were doing that. Some companies will even have, you know, securities built in with force major. So I guess the thing is with you not knowing, but you have to make business decisions is where you can be taken it advantage of or you could just be leaving money on the table because of the unknown. You don't know what rights to claim and declare. I think that when we purchase things just as personal people, when we purchase things, we get a receipt and when something is bad, we look at the back of the receipt or we look on the receipt and see what the warranty is. When can we return this back to the store? And that's what CLM essentially gives to the entire business organization is basically you can flip that receipt over and see what right do I have for something that I've spent money on or this relationship that I have with another party.

I think that's a perfect analogy because I think back, I'm like sometimes I look at every seat and where is it

exactly? 2.1s

I'm like, you know what, forget it. I'm just going to keep it, I guess, even though I don't really want it. Right. So that was an interesting analogy. So I guess for companies who struggle with these challenges or who does want more visibility and more better data to make better decisions, how can a consultant or service you provide help companies with it? How does it work? 1.8s

So CLM readiness has become the hot topic on top of CLM. Right. What companies have found is you need to organize your organization to a point where you can be successful and start gaining value immediately going into a CLM solution. You can do this. I'll use one way. Just one way is as far as just bringing your contracts together. There's ediscovery tools, there's strategic ways of getting access to your contracts. You bring as much as you can together and then you dump it into these tools. These tools have very robust AI and you can immediately start getting data to start bringing visibility and feeding into the solution. That is even before you actually create one contract request or go to one process of a full contract in the tool. So readiness is so essential because you need to understand. 2.9s To understand where you're going, you have to understand where you are today. And that's where we help companies really get ready, help you establish your workflows and your templates. You know, you really contract lifecycle. Management is not a tool. It's a way of working. Right? You establish that contract lifecycle manage to be optimized in the way that you work, and then go into the tool. And that's where we help companies really organize to get fit for the tool and then move into the tool. And to be honest with you, there's a value that can be created just in the readiness before going to the tool. The tool just maximizes

it. Yeah, I love the approach because obviously I think a lot of times 1.7s we just think that we buy a service or solution and then bam, everything just happens, right? But there is a kind of be ready for it. You got to change some of your processes in order for that to be successful. So I love that approach. So as we kind of wrap up the podcast here, one of the last questions I usually ask a guest is, you've learned so much in your personal and business career. If you have to give the audience that are business owners or startups entrepreneurs themselves, or even just stakeholders, if you have to give them one advice, whether it's a personal or maybe business advice, what do you think that would be like one thing you could share with them? 2.6s

I feel like everyone says this, but I definitely would say, do what you're passionate about. Right. In my experience, I've seen value in procurement and contracts and contract data. Right. And I'm very passionate, passionate about technology. And I think that when you find something that you're passionate about and you find a problem, really hone in on that, because that is really what give 1.2s value to what you do every day, what you live and breathe every day. Many times we kind of just chase titles and pay and different things, but really it's about purpose. So find your purpose, live in it, breathe in it, and be successful. So that would be my takeaway.

Nice. That's awesome. That's how I operate a lot of time, so I think that's why we work well together. And super excited to partner with you, obviously. And thanks for being on the show.

Yes, thank you so much. Victor. 1s

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