You have been working flat out for the last month to keep your business afloat. You’ve racked your brains to generate ideas to pivot your business model to one that can cope with minimum physical interaction with customers, suppliers or staff.
Somehow, you are making it through, and you can just about see how you are going to still be in business this time next year.
My local butcher has transformed his business and has converted 50% of resources to setting up and managing a delivery service, taking the radical step (for him anyway) of introducing online orders and free delivery to support customers. His strategic objective is the same as ever: to provide award-winning products to his customers. He has just amplified his service offering but built customer loyalty, even from those of us not using the service because he is doing the right thing for the right reasons.
In larger businesses, one of the most prominent challenges is that you can no longer fish the contract out of the filing cabinet and discuss it with colleagues over a coffee. This makes dealing with the strategic risks of contracts under Covid-19 much more difficult. How do you answer the CFO when they start asking questions like:
- Which clause should we use: Force Majeure? Termination for convenience or frustration?
- When will they be effective?
- What is the financial risk for termination and resumption?
- What other risks are we facing?
Meanwhile, the Operational Director is asking questions such as:
- Do I have rights to suspend delivery, in whole or in part?
- I need them to change their way of working and take on safe-distancing, how would such a change control work?
Identifying now that a digital-first approach to managing the business and its decisions would pay dividends is the foremost task in mitigating this strategic risk to your business. Such a solution would have meant that all business decisions as outlined above could be answered at the touch of a button.
Why retain so much office space if people can work from home?
We are now all becoming masters at Zoom or Teams!
Remote working has been an eye-opener to a considerable number of people because it has forced us to consider the strategic objectives of the business. CFO’s will be looking at this going forward as a means of saving money.
Large and complex contracts require active management of operational and financial risks.
You can seek to do this with contract managers however this can be time-consuming and requires incredible feats of memory from the contract manager to remember every obligation in the contracts they manage.
A more straightforward method is to convert the agreement into metadata within a contract toolkit and then assign the commitments to the individual that is best able to manage compliance with that obligation.
Our Contract Toolkit allows a contract with thousands of obligations to be managed effectively by the crowd. The system chases individuals to check bite-size pieces of the commitments at a predetermined time and escalates as appropriate. It can also record their answers and provide clear dashboards on the performance of the relationship.
If for no other reason you are unsure about the advantages of converting your contracts into metadata, it makes economic sense in addition to practical and governance advantages it brings.
Where are your contracts right now?
Still in the filing cabinet in an office you can’t currently access? Stored on your computer as a 200 page Word doc or PDF?
We can help you gain maximum strategic advantage from enforced remote-working. We’ll enable you to improve collaboration across your company, with your customers and suppliers too, as well as making contract performance management visible at all levels of the organisation.