Manual review of contracts: doing the same thing over and over, expecting different results….
Back in 2013, when Seal was just getting started, we were invited by a partner into an opportunity with a tier one bank in London. The bank had an urgent, compliance-driven project to pull around 15 pieces of metadata from 25,000 procurement contracts. The partner wanted to use Seal’s platform to do the heavy lifting of automatic extraction, and provide a review platform to manage and optimise the manual review for the last few percentage points of accuracy required.
The project was a great success: the review cost came in at one third of budget and, including the Seal license fee, the entire project was delivered at 50% of a seven-figure budget. We were looking forward to a long and successful relationship with the bank, with the base of 25,000 reviewed contracts in the platform. Then, to our astonishment, the bank declined to pay the license fee renewal and we switched off the platform! The work was lost! How to explain this counter-intuitive decision? The simple answer is short-termism and budgets. Budgets were allocated with extreme ease to compliance projects, driven by individual regulations. But to obtain funding for improving underlying improvements to address compliance over the longer term was an order of magnitude more difficult. So, in this case, the project leader was happy to declare victory, collect the plaudits, and move on.
Fast forward to 2017, and we find ourselves in front of the same bank, with the same partner. The requirement? To extract around 30 metadata fields from 30,000 procurement contracts to address the ring-fencing regulations. Yes, including the very same set of 25,000 contracts that we had first processed in 2013. It transpired that in the meantime, three individual manual review projects had been performed on this same set of contracts. Each time, each individual contract is re-opened, each page is read and scanned manually for the relevant clauses, and the results written up in a spreadsheet, often duplicating and re-duplicating the same work done previously (cut to scene of clearly insane man throwing dollar bills into a pit).
This time, they had understood, and we heard the sweet words we are becoming accustomed to hearing: ‘Never again are we going to start a review from scratch on these same contracts. We have to do it systematically, properly, once and for all.’ The contracts will be processed through Seal, the metadata extracted using technology, the deadlines for reporting met, and the whole thing brought in under budget. All the contracts, together with the metadata, will live on in Seal. And Seal will be the single source of the truth for these contracts and all new procurement contracts, feeding sourcing, CLM and ERP platforms with subsets of the data as necessary.
And next time around, when the new compliance rule comes down (and it will….), the task will be child’s play. Building on the work already done, rather than starting all over. It really is as simple as that.