Breakthrough Operational Performance, Featuring Berkshire Hathaway Specialty Insurance
Effective contract management is key to effective business operations, especially when money is tight. Over the past two years, the economy has endured major changes, but leading organizations have risen above these challenges. Watch this on-demand webinar to hear Berkshire Hathaway Specialty Insurance, Evisort, and Procurement Leaders discuss how you can achieve operational compliance by:
Hello and welcome, everybody, to today's webinar. My name is Ian Lawless, Conference Director and Content Marketing Solutions Director here at PL. It's a delight to have you all with us today. Today's webinar, we are going to be discussing the topic of breakthrough operational performance and how to better understand risks and adjust the balance for better capital preservation. I am absolutely delighted to say that we are joined today by Michaela Dempsey, Chief Marketing Officer at Evisort, who are partnering with us on this webinar, Emily LaCroix, Chief Product Counsel at Berkshire Hathaway Specialty Insurance, and Abubakar Mehdi, senior research analyst at Procurement. Welcome, all three of you. Thank you for joining us.
Michaela Dempsey (00:00:44):
Thank you, Ian. It's such a pleasure to be here. It's been a long time.
It has. Lovely to have everybody with us. A variety of different parts across the globe for today, as well, so always a treat to link everybody up. We'll hear from our panel a little bit more in just a few moments time, but just a little bit on today's agenda to help set the scene. We're going to be looking around procurement technology trends. We're going to be hearing about Berkshire Hathaway Specialty Insurance's compliance and risk journey in some more detail. Of course, these webinars are very much interactive, so please do take the opportunity to put your questions in to us throughout the course of the next 45 minutes to an hour. We'll take those questions slightly more towards the end once you've heard the bulk of the conversation across the day.
I mentioned this is interactive, so do put those questions in. We also have plenty of additional resources that are available during, throughout, and following the webinar, as well, to have a look at, so please do look at those. Feedback, please do provide that for us, as well, it helps us with continuous improvement around this platform, around your experience, around the content, and the discussions that we bring to the global community. So, please do let us know your feedback at the end of the session, as well. Any difficulties, though I very much hope nobody will encounter any, please do check out the help section, as well, where there's a lot of information in there. You'll be able to assisted by our team here and contact us by the question box, if needed, also. So, I ran through bit of the agenda there before and what we're going to be hearing from from the rest of the team across the course of the next hour.
But Abubakar, I'll come to you to begin with, you're joining us for the first 5 to 10 minutes of the discussion here, because what we really want to do is help to set the scene and provide Procurement Leaders' overview around this particular topic of breakthrough operational performance and what the PL view really is around how we can better understand risk and help with better preservation. So, I'll hand over to you, sir, to really kick us off today.
Sure. Thanks, Ian. So, we got asked this a lot. Unfortunately, I've not yet come across a crystal ball that would tell us how much or for how long prices are going to keep going up. Procurement teams definitely need to become more sophisticated in forecasting and overall market intelligence, and this often boils down to better ways of doing cost modeling. But it is also important to look at macroeconomic factors, like unemployment rates and geopolitical situations, at a more granular level, for example, specific to a supplier or a component. That information can reveal a lot that you need to know, especially in an age where things are just changing at a fast pace, you have to keep up with a lot of moving pieces. So, this is really about identifying drivers that are causing suppliers to hike up prices or even cause them to run out of goods. So, for example, we know from our scarcity economy research that we did a while ago, that one of the biggest culprit for the disruptions today is talent shortages, we've all heard about the Great Resignation and all.
With this information, procurement may choose to work with key suppliers to help them attract and train and retain talent to keep producing, keep running. But this may be something that procurement was doing in the past with only the top strategic suppliers. But now, it has to expand this to a broader pool of suppliers and give that support to all the suppliers, or as many as they can. Now, cost modeling, coming back to it, at its simplest form is about corporate analysis, analyzing annual reports and other public documents to figure out what the supplier is going through. But still, it's a limited tool, because procurement teams need to explore cost modeling and process mapping and tear down analysis to identify much more detailed information about suppliers, cost drivers. And more often than not, this depends on suppliers sharing competitive information with the buyer. So, cost modeling is definitely not a straightforward process, but requires a lot of relationship management, and relationship management should be done internally, as well.
Specifications and demand management are useful tools that give procurement a different approach to drive costs down in a recent conversation with a procurement professional. They said something really interesting. They said, we need more storytellers. We need storytellers who can tell a story internally and externally to stakeholders. Again, teams should get involved in product and service development early on, and they need to make sure that cost efficient solutions are being dearly considered. Now, the market intelligence procurement has on supplier innovations and customer trends can lead to unusual approaches to solving problems, which can only not only reduce costs, but it can also have a positive impact on the company's sustainability targets through reduced emissions or recycled materials. Now that is also a key target. So when I talked about the moving pictures, that really is a lot of moving pieces and it does require procurement to develop that skill, to manage all those pieces all at once.
Now, in addition to everything I've shared already, I'd also like to add the procurement needs to consider more streamlining, spend behavior across user groups at different parts of the organization. So, and this is to achieve the good, old economies of scale. And the thinking goes that if supplier prices are anyway, going out, all you really need to do is pull as much, spend together to get more leverage at the negotiation table. I would say that in order to do that, you also have to leverage at, at the relationship bit, you have to manage relationships more smartly in order to get that again, coming back to what I've heard from, from people in procurement, they've said that we've reached a point where if you push the supplier too much, they'll say take it or leave it. We do live in that world where that can happen.
So managing those relationships effectively is a key point to this puzzle, as well, but also understanding things on your end and being more cognizant of what it looks like on the other end as well. So this often means that stakeholders have to make some compromises in their preferred specs were good and services, but times are hard. These are not ordinary times, so you have to have that flexibility, as well. So to understand what features should be considered essential and what is more likely to be nice to have kind of thing. We know some procurement teams are running value engineering workshops with stakeholders. Procurement Leaders members can read a case study about UK retailer SREs approach to this. And it spells out nicely different steps they took in that effort. And yeah, that was basically a quick summary of the discussions that advisory at PL is having with the members. I think I'll hand it back to Ian now. Thank you so much.
Yeah. Thank you, Abubakar. Really great. Just to help give us a bit of context around what we're hearing and what we're seeing as a global community at the moment on what's really pressing and interesting topic. So fantastic for helping to set us up today. I know you need to leave us. You've got some other engagements across this next hour, but thank you for joining us to help set the scene today.
Thank you. Thank you. Thanks a lot.
Well, we would like to do a little bit of bring our audience in a little bit here. Folks, so what we've got as part of just this next minute also is a little poll. So if you please take the time to submit your answers for this is how have you used AI in your procurement operations. We're interested to know a little bit more about this, because it was going to help as part of the rest of the conversations across the next 45 minutes or so as we let our audience put their answers in. Michaela, Emily, anywhere that you would hope to see answers or where expect our audience maybe to be? Not preempt what their answers might be, but just what you would like to see a responses hit.
Emily LaCroix (00:09:01):
I would be shocked if there was anyone answered D, how I'm just going to ignore the whole AI trend and because it's going to blow over. I don't see that happening. I expect that most people will be in the B answer.
Michaela Dempsey (00:09:25):
Maybe B or C, depending on now.
Emily LaCroix (00:09:30):
Yeah. And I also,
Michaela Dempsey (00:09:31):
A lot of people have AI and they've heard mixed things on it. I heard a contracts podcast yesterday that was saying that it was ridiculous to think that you could just take your contracts and put it into an AI system and have it all work. I laughed, because that's exactly what our product does.
Emily LaCroix (00:09:59):
I also don't think A and B are mutually exclusive because I would put myself in both the A and B. Yes, we've used it, it's effective. I'm confident that there are ways that we could expand its use.
Michaela Dempsey (00:10:18):
Interests. Well, I think that about most software with all of us, we start with something and we get comfortable and we feel it's solving the problem. And then we go about our day. So it's true. None of us probably use any of the software we completely
Emily LaCroix (00:10:38):
Well, and I think some of it, too, is you don't know what I mean. I have an iPhone, I'm sure it does things that I don't even know that it could do just because it's not, it never occurred to me to either go looking for it or to learn about it.
Absolutely true. Wells have a look, we have a good, we have a very good sample size of the audience that was submitted. So, let's see what the answers came in at. And you're interesting, interesting, interesting on that last one, but 75% across B and C there that have either have not fully utilized it or certainly planted, which is where you both thought would be. I'd love to hear for it in the comment section from those that aren't planning to do. So just as to, as to why potentially as well, but let's... Either of you or Emily, your additional thoughts on responses before we move on?
Emily LaCroix (00:11:28):
I would like to echo your request to the justification of no plans to do so that's surprising to me.
Michaela Dempsey (00:11:41):
I think that maybe it's the concern of costs in their organization, but I can tell you, it will save you actually lots of time and money. So definitely something to consider anyway.
Absolutely. Well, let's go into the... I'll hand over to Michaela as to tell me now to go into more adapt around. Your own journey and some more insights from your organization. So, please do take us through the next part of the program here.
Michaela Dempsey (00:12:12):
That's great. And Emily, I'm so excited that you're here today to share because your story is great. And I really love what you've been doing with Berkshire Hathaway Specialty Insurance. So if you would do us a favor and jump in and share your breakthrough operational success.
Emily LaCroix (00:12:31):
Sure. Well, I'm excited to be here, as well. In the past year or so, I've really gotten to know a lot of the team at Evisort on all sides and really, really fantastic forward thinking receptive just overall, a really positive group of individuals. So it's been a pleasure working with you all. I've been at Berkshire Hathaway Specialty Insurance, so we were founded in 2013. Warren Buffett's known for not starting his own companies and just acquiring them, we are the exception to that. In 2013, he handpicked four individuals, who then were at AIG, and said, "I would like to start a property and casualty insurance company, a global... You can take as long as you want." Warren Buffett, all about slow growth. We were founded in 2013, so we're getting close to the 10-year mark I've been here for six of those years.
We're based in Boston, I'm currently in Dublin on a compliance assignment, and rapidly grown in less than 10 years. We've expanded our footprint to 14 countries. We've write in almost every single country. We have 1,800 teammates globally, I'm number 401. So I'm always baffled whenever these numbers come in and when we get a new teammate and an announcement sent out and you're just like, "Wow, that's a lot," especially compared to the dynamics when I first started and just casually throwing in how much we've made. Well, not how much we've made, but just top line, we've written more than 20 billion in premium inception to date. That's amazing. Well, so interestingly, so I'm in Dublin, which is where our European operations are located. We founded our European division in 2019 and we are now the second largest property and casualty insurer in Ireland, which is bananas to me, which is part of the reason I'm here, because of the rapid growth.
I think that ties in really nicely to why Evisort was a good choice for us. Just software in general, we are a very flat organization, first, out of necessity and now, still more out of culture. We don't really have a procurement department, it's rolled into operations and overseen by our COO, and each member of the business is responsible for their own outside partnerships. We mostly use services, so most of our contracts are service contracts. So, everything from our offshore back office operations to freelance writers for content for our direct-to-consumer websites, everything, we have service contracts. They daily come through to legal for review. For a while, I was the only person doing it, managing both the legal review and then also the post signing what happens to that contract. We would just ask the member of the business, whoever the relationship owner was, "Please save a copy for your own records," and then in legal, we would keep a copy, just in case there was a dispute down the line.
We would rely on the business to keep tabs on that relationship and that contract, and when the expiration date was and what the terms of it were, and that we were complying with the terms of the contract. If there were certain requirements on our end, legal wasn't going to manage and make sure that everyone was doing what they were supposed to do. I've been pushing for some sort of smart storage solution, pretty much since I started in 2016, and it was agreed, "Yeah, that's something we should get down the line." Like you said, it's expensive. Although, when I was like, "It's way cheaper than another lawyer that we would have to get on board." I happened to be talking to our parent company is National Indemnity Company, NICO. I talked to the person who's in charge of their contracts and he mentioned that they were using Evisort and he said, "It checked all our boxes and all that," and so I was able to present that and say, "Look, guys, if it's good enough for NICO, it's good enough for us."
Evisort is one of those things that, where I think just in general, smart contract management or any software, in general, there were things I knew I needed it for, and then there were things that it proved useful after the fact, after we'd already signed it. I always make sure that anytime there's that use case that I make sure that the people who signed off on it know about it. So, part of what I was noticing that we were having as risks in our lack of a contract management system, so they were all just in a folder on the shared drive, that was restricted to legal, so it was restricted access, but you couldn't do anything with them. The example I always use is at the beginning of the pandemic, my GC came to me and said, "What do our contracts say about force majeure?" I laughed at him and I said, "Okay, We have 900. I will tell you what our three biggest ones say. I will open them up and read them and I will tell you, but I can't tell you what all our contracts say."
So, I think of that as just, again, the contract intelligence. The risks, as we were conceptualizing this and explaining the kind of risk management journey that we've been on trying to corral these contracts, I divided them mentally into internal and external risks. So, the internal risks, when I'm thinking about financial risk, we had, more than once, a contract that had an auto renew provision that the member of the business blew the date. You think that you can send a quick email and be like, "Hey, so sorry, we're seven days late into our 90-day notice period, thanks for understanding" They're like, "Too bad, you're on the hook for a year." And they're like, "Okay," and then we have fight about it. You usually come to some sort of agreement, but it's more than it would've cost us if we had decided to non-renew on time. The other ones are compliance risks. When I think about making sure that our contracts have our own preferred language, our own best practices language in it, and making sure that they comply with our own internal requirements for whether it's...
One thing that we do is an IT outsourcing review on a rolling annual basis, making sure that we have everyone's Soc 2s and that that their data protection and business continuity plans are all up to date. That's something that IT tackles and that's an internal compliance dovetailing. So, those are how I think of internal risks. The external risks would be a contract breach risk. If you don't know what your contracts say, you'd have a hard time complying with them. The example I give would be if there was ever a data breach and our... We have contracts that require notification. One of the use cases I gave when making the pitch was if we had a data breach, we would have to review 900 contracts to figure out who we needed to tell and where to address those notices and all of it. So, having that ability to quickly find that information if we needed it is a way to manage our risk.
And then, finally, regulatory risk, especially in Europe. Also, we have branches in Asia/Middle East, and Australia/New Zealand and the regulators there are much, much, much more involved. We are a heavily regulated entity anyways, but they have a lot of requirements that we have to comply with. GDPR, obviously, being a huge thing. The Monetary Authority of Singapore has huge requirements in terms of what you need to have present in your outsourcing contracts. Similar things are in Europe and the UK, and so our ability to be able to confirm that all our contracts have the required language that the regulators are demanding that we have is something that we're currently managing through Evisort.
Michaela Dempsey (00:22:55):
So, let's step back a second. So, looking at all these challenges that you had with the contracts, including the beginning of force majeure, I know in the world of procurement, that was just one of those wild moments that happened. None of us, obviously, were prepared for a pandemic and I don't believe any of us ever thought force majeure would come in, let alone again when we had some from the war that broke out in Ukraine. When you were looking at wanting to have a product or a solution that would allow for collaborative management across contracts, what were all the things that you had in mind? I know you've shared that your parent company was using this product, so it seemed like a good decision.
Emily LaCroix (00:23:56):
Oh, it was a no-brainer. Part of it was because they had said that they checked all the boxes. Really, the most basic one was have all our contracts, globally, for all the different departments in one place. Even before I started, there was no contract folder on the legal drive. Everything was just whoever had made the decision to enter into a contract held a copy of that contract, the end. Again, the company was three years old, so we could get away with it. One of the first things I did was corral all the contracts and put them on the L drive, but that wasn't necessarily a good solution for global and it wasn't necessarily good in terms of access restrictions. It was kind of clunky because it was all or nothing, it was either the legal team can get into it and no one else, or everyone can get into it, which wasn't what we wanted.
Michaela Dempsey (00:25:01):
Emily LaCroix (00:25:01):
So, I guess that goes into the next couple, which is the access restrictions and controlling by department who can see what, so IT can't see the HR contracts, HR can't see the marketing contracts, legal team can see everything. But different regions, the Asia/Middle East teammates don't necessarily want to be able to see what is going on in Europe, because, again, these access restrictions protect us from potential data privacy concerns that might arise with more people than necessary being able to access any given document. Then the other thing that we were looking for, again, was the searchability, the ability to categorize... If we wanted to say, "Show me all the IT contracts," that we could do that. "Show me everything that has data breach notification requirements. Show me everything for all contracts that hold personally identifiable information. Show me all contracts for a certain region." So, to be able to have things that are searchable, both to find a universe of documents, but also if you're in a specific document to be able to skip directly to... If I'm looking for the force clause, to not have to scroll through the entire agreement.
Michaela Dempsey (00:26:35):
Now, how did you get this set up, because you're now in Ireland, but I know originally when you were getting all this organized, you were in the States, but you did, at that particular time, represent Canada, basically all of North America?
Emily LaCroix (00:26:56):
Right. Once we got it signed up, we got the software, the team we worked with was great from a tech standpoint. We had also an IT partner on our side who was the liaison for the technical parts that the lawyers didn't really understand. What we had done is we decided that we wanted all our contracts in SharePoint for various reasons, and so I set up all the... I actually engaged with some other members of the legal team and stakeholders and said, "What does the folder architecture look like that makes sense? Do we want to have it by department and then by region? Region then department?" We thought about it, came up with how we wanted things structured. We also had active and inactive contracts, which, again, when everything was on the L drive, there was no way to tell what contracts were expired or not, and so they would just live there, cluttering and making it harder to find whatever we were looking for. It was more hay in the haystack.
So, once we got everything dragged into SharePoint and put in the nice folders, synced with Evisort, pulled all the contracts out. So, then we had about 900 documents, roughly, in there. We're automatically able to pull out which ones had expired and reach out to the business owners associated with them and said, "Is it something that this expired on paper, but the relationship's ongoing? Is it something that you want to... It's just dead, we're going to put it in inactive?" And then there were some duplicates, there were some that were partially signed or fully executed. There were some that I had saved it and someone else had saved it. I think I said on the last slide, we were able to get it down to about 600 documents in Evisort. So, all of a sudden, again, when you were looking in that haystack, the haystack's about a third smaller than it was before.
And then we went through and AI picked up a lot of their out-of-the-box key terms that they look for, but we also had ones that we were concerned with. We created these custom tags and went through and applied them as necessary to the contract, so that now, again, when you wanted to filter by certain types of contracts, whether, again, it's by region or type or anything like that, that's all of a sudden easier because they've been... We now have this metadata associated with the document that we didn't have when it was just in a folder.
Michaela Dempsey (00:29:50):
That part is really interesting, because I've seen a lot of our customers certainly go through that journey. They throw in the contracts and I call it the Sorting Hat, for a Harry Potter reference, but I think of it that way, it sorts everything out. And then you can action on eliminating things that are either duplicates or unnecessary, so then it's a cleaner system for you to really dive through. And then as you were saying, it comes with a 100 or so standard things that, generally, almost everybody does, and then allowing you to also customize it for your needs and your industry, whether it be certain compliance needs or beyond that. I believe you guys have uncovered some really interesting things overall.
Emily LaCroix (00:30:51):
Sure. Interesting is a great way to put it. One thing, too, is we're managing the auto renewal or the renewal process differently. We've since brought on a paralegal, which is great, so she's been doing a lot of... I think now she's the one who has the biweekly calls with Evisort to see if there's any issues, I'm not even on those. So, I'm in Dublin now and I asked the CEO of the Irish entity, "Where do you keep your contracts?" And he's like, "Well, the ones I've signed are in this folder." So, I go in there, and I pull out a dozen contracts, and then I go to the risk team and I'm like, "What do we have for contracts?" The list was very, very, very long. I was like, "Cool, where are all these documents?" And they go, "I don't know." So, I'm going to have to go around and literally corral things and do it all, find whoever's desktop email folders, whatever people have saved things on and in, and get copies into SharePoint and then into Evisort.
We may discover on the risk register that there are some contracts that expired and nobody told risk. Like I said, the surprising thing being that we were able to get rid of about a third of our documents because we didn't need them, that was huge. What was on the next slide, because I think... Yeah. So, this was the one I was talking about, too, our IT team doing that rolling audit of all our vendors, and that they want to make sure that they have everything, that their data security is what we need it to be, and that their business continuity plan is what we need it to be and all that, so we're able to do that. A good example of this was our internal audit team decided that as part of their annual compliance plan, they were going to check on how we were doing with the Foreign Corrupt Practices Act. So, basically came to me and said, "Emily, do all our contracts with government-facing entities have FCPA language as required?" Again, a regulatory risk.
I was able to say, "Caitlin, please search all contracts that have FCPA or Foreign Corrupt Practices Act." That wasn't one of our tags, and then we then created a tag for it. But to able to immediately, by the end of the day, have a list to the auditor and say, "These are the ones, this is how many we have, and this is what they are." We're able to do that in a turnaround. It's one of those, "Wow, thanks so much for the quick response," emails you get back, and so that was a really... Again, that was one that I forwarded on to the kind of people who had helped make the decision and say, "FYI, this was just a huge thing that happened and it would've taken I don't even know how long to go." Because if we hadn't had Evisort, it would've been 900 contracts. There are some that I would've been able to say, "Mm," and known off the top of my head, and some, we would've had to open up and pop the hood and actually read it to find out whether it had this language or not.
Michaela Dempsey (00:34:35):
The thing that's amazing about that is that over the years, we have all just accepted that. We've accepted that when an auditor comes in, that you're going to dig in and really take the time to look at everything and it's going to take you days. It seems magical. It seems magical that you can have a system that just pulls this up. But if you think about it, we've all been using Google for a search engine for a long time-
Emily LaCroix (00:35:05):
Well, I was going to say, it doesn't really seem magical. There's much that's intuitive about it.
Michaela Dempsey (00:35:08):
Exactly. We have customers in healthcare, for example, that might get random audits and they need to have that information. They'll stop at their hospital and they can just pull up the system and have everything that they need for the compliance, whether it be for diabetes or for something on Medicare or whatever. It's amazing, because it delivers the materials that are important, but it alleviates the work that we always wanted computers to do for us.
Emily LaCroix (00:35:52):
Right. Again, it gets the hay out faster.
Michaela Dempsey (00:35:57):
Emily LaCroix (00:36:00):
This is an example, again, we haven't had a data breach, because we have a fantastic IT team, but if we ever did, or even if we had a near miss, we would be able to identify who we needed to notify. Not just the entity, but a lot of the contracts have... Well, the contracts that do require will say, "Here's our data protection officer's email address, firstname.lastname@example.org," or, "Send it by certified mail here," or we have to do both, or something like that, with a copy, too. So, that helps us have our own internal compliance standards. When we talk about when our IT team has their data breach incident response plan, which we all have to have. You're not planning for it to happen, but you need to have some sort of response plan so that if it does, you're prepared. Again, we work in insurance, this is what we do, we prepare for things that we hope don't happen, but realize that there's a risk of it.
And so, being able to say, "Check our contracts to see who we need to notify," and to have that step again, take-
Michaela Dempsey (00:37:18):
Emily LaCroix (00:37:20):
Yeah, I know. It feels weird to say that, but-
Michaela Dempsey (00:37:23):
But it is.
Emily LaCroix (00:37:24):
... to be able to turn around that deliverable. I think especially, a lot of them have requirements that it's 72 hours or as soon as possible. It's not the kind of thing that you can take a week to dig through your contracts, you need to let them know as soon as possible.
Michaela Dempsey (00:37:40):
Yeah. You guys really are on it with your proactive approach. Can you explain how you're managing in terms of your key suppliers? So, I know when we were doing a walkthrough earlier, this was a few weeks ago, but you were talking about having really critical suppliers because of insurance-
Emily LaCroix (00:38:00):
Oh, the outsourcers. Yeah.
Michaela Dempsey (00:38:02):
Right. So, how do you go through that?
Emily LaCroix (00:38:09):
Other non-US regions require that we, as a financial services provider, have an outsourcing register, which the regulator needs to know about. So, they need to know which of our key functions, material, critical functions, we outsource, whether it is anything from an HR or a third-party administrator, or, again, our back office offshoring. I think we're talking about maybe getting our sanction screening done outside. The reasoning behind that is that if something goes down, if our outsourcers go down, this is all part of a business continuity plan, what would you do? And also, fanning out if there's... Because the regulator wants to understand what the risk is, what our risk is, and so they need to know what the next line down is.
Being able to tag one of our custom little categories as a material outsourcer, and so that then instead of managing it on an spreadsheet, which as much as we love them and we actually use the spreadsheet to help inform how we wanted to create and label and use other metadata, but be able to keep track of who our material outsourcers are. Again, we're not relying on someone to keep a spreadsheet, we have this one source of truth, so there's not dueling spreadsheets. To be able to, again, have, at the click of a button or at our fingertips, the ability to get, in real time, a snapshot of where our critical functions are being outsourced.
Michaela Dempsey (00:40:12):
Let's dive in for regulatory risk.
Emily LaCroix (00:40:15):
Sure. So, this is a big one. One thing that I'm working on while I'm here is our GDPR compliance. We have branches all over Europe, and so we are really working on making sure there are the standard contractual clauses that need to be in all our contracts by actually the end of this year. Some of our newer contracts have something similar, some of them have no GDPR language about data processors and data owners. Some of them, it's not required because they're not providing any type of data processing services. But we're going to have to go through, once we corral all the contracts and figure out which ones need to have these standard contractual clauses added, that's going to have to be a process that we manage in terms of sending them out, getting them signed, getting them back.
There's going to be some that we are the data processor and some where we're the data owner, so being able to, again, have those tags. So, show me all the contracts where we are the data processes, show us all the contracts where we are the data owners. Show us all contracts where data is being processed outside of the EU. Those are all going to be things that are super relevant. Again, that's part of the implementation of the contract management and being able to get... Look, if I had to do this without Evisort, it wouldn't get done by the end of December, it just wouldn't. And so, I'm pretty confident about that deadline-
Michaela Dempsey (00:41:56):
The deadline is December, right?
Emily LaCroix (00:41:58):
Yeah, end of December, which is basically already here.
Michaela Dempsey (00:42:02):
Yeah. It is.
Emily LaCroix (00:42:03):
It's mid-August, it's basically December. But also, so again, the Monetary Authority of Singapore or the regulators in Hong Kong, again, with our big outsourcing contracts, or even just in general, they want to make sure that our contracts have certain language. Which, again, I think being a US-based lawyer, at first, the government requiring you to have certain terms in your contracts is an affront to the American way of doing things and it's not in affront to how people do in other parts of the world. Because, again, they're trying to manage not having a global financial crisis because something was overlooked in some inter-financial institutional relationships in contracts.
So, again, being able to pull these reports, filter these reports, put everything into a spreadsheet. Show me everything in Singapore, show me everything with data in Singapore, show me everything that is material outsourcing in Singapore. And then, from that universe, now search do we have the right to audit their books and records? Which is something that is required. To be able to search for all those types of terms, whether they're out-of-the-box terms, whether they're terms that we have created custom metadata tags for, or if it's something, again, like FCPA, we didn't have at the time, and to be able to create a search for that, a Boolean search or a Google search, almost, to be able to pull those terms out of the contracts.
Michaela Dempsey (00:43:53):
It's amazing all the things that you're doing. Really, you've done-
Emily LaCroix (00:44:00):
Well, and it's funny, because I want to say-
Michaela Dempsey (00:44:02):
When you think of all the information, it's huge.
Emily LaCroix (00:44:05):
Right. Like, "How did you guys [inaudible 00:44:07] going to do this?
Michaela Dempsey (00:44:07):
You've got all these controls in place and you're able to uncover all the different compliance laws. So, really, it's wonderful what you've accomplished. I know you have a bit more to know, certainly, but-
Emily LaCroix (00:44:23):
Well, I was going to say, too, a huge part of it is the ability to get things out of my brain, I think you and I talked about this, Michaela, a couple weeks ago. Well, it's not even so much getting things out of my brain, but if I left the organization, there would not be someone who knew, just by reading the name of contract, what that vendor did or what department it belonged to before we had Evisort. They would've had to, again, open it, read it, figure out who reviewed it and signed it and what the services were, and then maybe guess about whose it was. Now, again, being able to filter it by department, by business, by who the business contact within our organization is, and what each vendor does. Having that information available to everyone, instead of having literally everyone in the organization ask me, "Oh, what's this contract do? Who are these people. We just got an invoice from them. Who authorized this?" Or just questions like, "Can you send me a copy of the blank contract?" Now, that's all in Evisort, I can use my time for other things.
Michaela Dempsey (00:45:39):
Yeah. I can tell you, I started working so many years ago where they didn't have computers, it's true. I remember going over to the procurement area, I started in technologies, and they would just have stacks and stacks and files of paper. These huge books, because it was no technology, so we had all kinds of government contracts and such. So, it's an amazing journey when you think about all that we've gone through with contracting. Although, you guys didn't have any paper contracts, but even with this type of system, you can easily scan them in and then have the digital access that you would have with any type of current digitally-created contract. So, where are you guys going with this?
Emily LaCroix (00:46:35):
Michaela Dempsey (00:46:37):
Emily LaCroix (00:46:37):
Oh, sure. But again, me being in Dublin, we're doing this global rollout where I'm going to replicate the process that I did in North America and all of Europe, and also onboard Australia/New Zealand and Asia/Middle East and get it so all the documents are on this one system, and so that you can... Because as we're starting to become a more and more interconnected company, we have a multinational program, there are going to be services offered in Singapore that impact the European branch. Things I care about are efficiency and consistency, just as it's how I made my journey from legal into compliance, is just really driving consistency and efficiency, and so being able to have preferred terms, matching terms, as similar as possible across all regions, if we have that contract certainty, is going to make everything smoother, it's going to manage the risk, because we're going to know what we have and what we need.
Michaela Dempsey (00:48:07):
Well, I have to tell you-
Emily LaCroix (00:48:08):
The second thing is-
Michaela Dempsey (00:48:08):
Okay, sorry. Never mind.
Emily LaCroix (00:48:08):
Well, no, what?
Michaela Dempsey (00:48:08):
I was just saying that you really seem to be making compliance fun, which doesn't seem like it's possible, but you really are.
Emily LaCroix (00:48:15):
Yeah. And then what were the other things that I was saying? So, part of that is the data protection, I talked about that, the GDPR. And then I think we've been talking about, and again, Caitlin has been talking more with your team about just other places that we can use this AI. Again, I know that Evisort offers the pre-signing review module, which we didn't get at this time, but there may... In part, because I think there's a distrust of what do you mean a AI can review a contract better than a human lawyer? I think that one's probably a way off, but-
Michaela Dempsey (00:48:59):
Maybe not, think about all the written contracts you'd have to do.
Emily LaCroix (00:49:00):
Well, from where I sit-
Michaela Dempsey (00:49:00):
For GDPR, you might need to do it and it might make it faster.
Emily LaCroix (00:49:07):
Right, because if you can automatically... Again, they're standard contractual clauses, if you know this is what you need, that can just automatically be shoved right in and you don't have to go line by line or do a cut/paste compare to make sure that the standard contractual clauses are actually standard.
Michaela Dempsey (00:49:28):
It's not as if the system is a robot inside and it just also contracts your things. It's not-
Emily LaCroix (00:49:36):
Michaela Dempsey (00:49:36):
It's not Hal, it's not just taking over. So, it-
Emily LaCroix (00:49:40):
Right. It's not making decisions
Michaela Dempsey (00:49:41):
... must be [inaudible 00:49:42] to get your GDPR done, but that's a whole different thing. I would say there are actually some other exciting things that we have customers doing, but that's not really for this webinar, but they're using our API and doing revenue recognition and all different kinds of things with the AI. But I wanted to thank you. I know we've all been going through this, so I'll do this really fast. I can imagine that there's a lot of amazing questions for Emily, but I wanted to share a bit about Evisort, especially for anyone who's been hearing about this AI solution for the first time. We offer a AI-powered contract lifecycle management, contract intelligent platform. As Emily shared, we've purpose built our platform so that anyone and everyone can use it. You don't need to be a data scientist, and I can attest to that, because I use it myself. We have trained Evisort's proprietary artificial intelligence on over 10 million contracts, enabling it to easily understand the context and meaning of language.
Our platform is built to be easily integrated with your existing repositories, so there's no need to migrate data. Evisort can pull straight from Google Box, Dropbox even digitize old paper contracts, and we also integrate with familiar procurement tools like Coupa, Ariba, and others you may know, I may have represented some of them. Evisort works with organizations of all sizes and industries, and here a few of our amazing customers that we collaborate with on a daily basis. I love working with the customers. I have done it across my career and with AI, it's even more exciting and interesting, because you're just really learning about how the true back office nuts and bolts are going. From compliance and vendor contracts, as Emily mentioned, to revenue recognition reporting and deal acceleration, these are many different ways to the businesses around the globe are using Evisort. With that, let's go to Q&A, because I know we're a little over. So, thank you, everyone.
Thank you to both of you, superb. A lot of depth in that, a lot of fantastic work that's gone on in clearly, your fantastic partnership. So, thank you for sharing the story and all the work today. You are right, we have some great questions that are coming from the audience. So, let's start with one for Emily, please. Emily, what is the easiest way to quantify the benefits of contract management?
Emily LaCroix (00:52:23):
Oh. I made a passing comment earlier about, "Well, it's easier than hiring another lawyer." Lawyers, even though I'm in-house, I practiced at a firm for 10 years and so I still think in 0.1 increments, six-minute increments of my day. And so, being able to just have these human hours reduced, again, to minutes, I think, is probably the biggest way to quantify it. I think, again, the other way would be what contracts are we not... Missing regulatory fines or any breach of contract anything or auto-renewing, having to pay more than we otherwise would, I think that's marginal compared to... Because I think, at the end of the day, we would probably be able to do everything, it would take forever and it would take more people.
Perfect. Thank you for that. Next question, another one for Emily, as well. How can we ensure compliance governance across the company more broadly?
Emily LaCroix (00:53:34):
Wait, can you repeat that? How can you ensure...
How can you ensure compliance governance across the company?
Emily LaCroix (00:53:43):
Michaela Dempsey (00:53:45):
That's a big question.
It's a tough one.
Emily LaCroix (00:53:45):
Can we ever really ensure anything?
Michaela Dempsey (00:53:50):
No, we can't.
Emily LaCroix (00:53:50):
But I think again, having these key terms that you decide on what is your preferred language, what you will accept in terms of indemnification or limits of liability, or any kind of terms about what you are... Confidentiality or non-competes, and so being able to have that be consistent. I think once you're confident that it's consistent, it's easy to comply with your own internal governance. Once the decision's made, if you have this tool just to make sure when it gets popped in that all the boxes are being checked.
I guess if [inaudible 00:54:41]... Sorry about that, Michaela.
Michaela Dempsey (00:54:41):
Oh no. So, I would just add on, I would say it all gets down to controls. So, if you have the right controls in place, you're in the best shape that you can be to manage anything across your organization. So, every type of compliance relates to a core set of control lists and then controls for that particular type of compliance. As long as your organization has that in mind when you're building things out, and then making sure that you have a way to really action and document that, then you will be compliant. Because things happen, we're humans. It's life, and it's unpredictable, and that's why actually people have insurance, right, Emily?
Emily LaCroix (00:55:43):
If you think of, Emily, the top tips or some of the best practice that you [inaudible 00:55:51] on here, as well, the next question that we've had is more around your top tip that you give to someone who is evaluating a contract management tool, like Evisort, for example, Emily?
Emily LaCroix (00:56:01):
Oh. I think you should probably test the AI, because the tool's only as good as the AI itself. So, for me, again, NICO had attested to it, but there are ways to have the AI review a contract. Everyone's happy to give you a demo and you can say, "Well, can we do it with this contract?" Just make sure that you are comfortable that the AI is operating as well as you need it to be, that it's as intelligent as AI can be.
Michaela Dempsey (00:56:47):
I would second that. There's a lot of organizations that are using humans or other types of things that are supporting or doing the actual work. So, you want to make sure that when you pour your information in that really, in real time, you can see that. I can attest to, at least our solution, that if you put a document in, it's right there. We actually did it live with a reporter at one point and it really is amazing.
We're almost at time, just around this one now, and this is a very, very personal question. You've given us a great conversation here for us about the partnership and the work that you've done together and any collaboration. But David's asking about, Miss Emily, for you, again, resources are tight for a lot of organizations, so how did you actually go about building that particular stakeholder buy-in to make the business decision to work with Evisort, for example? It's always a really interesting area to see how people build business cases around this.
Emily LaCroix (00:57:59):
Well, so it was basically a gap analysis about where our... It was really about risk management. Ultimately, this was approved by the risk committee, because we needed to say, "Look it, these are the places that we are potentially exposed and things have not necessarily gone wrong," although, in some of them, there were, like the blown contract auto renewals, "But these are some real potential exposures and what are we going to do to close those gaps?" Again, we could hire more humans to read the contracts, but that is not only prone to a higher error margin, but also, super expensive. And so, being able to just say, "Look, this is a fraction of what a lawyer would cost and it mitigates our risk in all these different areas," I was able to, and again, give the use cases, that were both some hypothetical and some real, the case made itself at that point.
Michaela Dempsey (00:59:14):
I believe you're saving hard dollars, so-
Emily LaCroix (00:59:17):
Oh yeah. 100%.
Michaela Dempsey (00:59:17):
No, but there are.
Emily LaCroix (00:59:23):
Michaela Dempsey (00:59:23):
There's an ROI of soft dollars, the freeing people's time up, but there's a ROI of hard dollars, so-
Emily LaCroix (00:59:31):
Well, it's funny, because I think of that as a hard ROI, freeing up people's time. Again, the other option is to hire another human to manage contracts full-time. That was part of my argument was at other companies of our size, the person who manages the contracts, that's all they do. At our company, I was doing it in a... You may have noticed, my title is product counsel. That was my main job and this was a side responsibility, because we all have our own little side responsibilities when we're all in the trenches in a relatively new organization. But it was getting to the point where you either need a full-time human to manage this or we can have this AI boost our ability to manage these risks.
Michaela Dempsey (01:00:26):
It's not just that, it's the other parts and pieces, too. So, it's the finding, let's say, the contract exposure or making sure you have the compliance, or repapering. So, there's more than just the search, which is really where it gets down to year-over-year. Anyway-
Fantastic. We are at time, unfortunately, but I feel like we could go on for much longer at this particular point. We've had an awful lot of areas to cover and a great conversation that's been had. It [inaudible 01:01:01] at least me at this stage to say huge, huge, thank you to all of those that joined us as participants today, but also to our speakers, more specifically to Michaela, to Abubakar, and to Emily, thank you again for being here. As I mentioned earlier, there are more additional resource resources, please do look at those, look at the other great thought leadership that comes out of Evisort, as well. Please do hopefully join us at another upcoming webinar over the next coming weeks and months and check out our calendar online. But thank you again, Michaela and thank you, Emily. Great to have had you with us today.
Michaela Dempsey (01:01:33):
Emily LaCroix (01:01:34):
Thanks so much.
Michaela Dempsey (01:01:34):
It was great having the time.
Emily LaCroix (01:01:36):
All right. Thanks, guys.
We'll see everybody else next week. Thanks a lot. Bye-bye for now.
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