We recently explored how contract management platforms can streamline mergers and acquisitions (M&A), from confirming a target company’s revenue to mitigating the efficiency and security concerns associated with conducting due diligence in a deal room stacked with piles of paper. As we noted in that post, however, the benefits of a contract intelligence platform extend far beyond the day the deal closes. The point of M&A deals is to create efficiencies and synergies by joining forces, but integration of newly unified business teams and their disparate systems and complex processes takes months—sometimes longer. One of the main reasons that mergers fail is a lack of planning regarding post-M&A integration.
A contract intelligence platform can facilitate successful post-merger integration planning by improving business intelligence, communication, and cross-functional collaboration between legacy businesses and teams. Here are six key ways in which contract intelligence can get your newly merged business running like a well-oiled machine.
- Establishing a Single Source of Truth
An ounce of preparation is worth a pound of cure. Centralizing contract storage right away following a merger will create a single source of truth for the merged business. Good contract management software can rapidly import contracts from any source. With all of your documents secure in one easily accessible location, you don’t have to worry about losing track of important agreements (or losing the files altogether).
If you’re not yet ready to store all of your commercial agreements in the same place, that’s not a problem. A leading contract intelligence platform can pull contracts from wherever they are and allow you to review and work on them within the same interface, without requiring you to get rid of your existing storage solutions.
- Vetting Vendors
A merger can provide a great opportunity to reassess both your business’s needs, and whether your current suppliers are meeting them. With a centralized repository that allows you to quickly review all of your contracts, you can efficiently measure how well each legacy business’s vendors have performed, and also how they compare to each other. Have they delivered what they said they would under the terms of the contracts that were already in place prior to the merger?
You’ll probably want to work with your accounting and procurement/vendor management teams to assess your vendors’ actual performance relative to their promises. A good contract intelligence platform will facilitate that collaborative review by allowing you to direct the right teams to the right documents.
- Meeting Contract Renewal Deadlines
A platform that offers machine learning and natural language processing can quickly identify all of the expiring and auto-renewing contracts in your newly combined contract portfolio. Automated dashboards and alerts can help lawyers, procurement managers, and executives to stay on top of those deadlines. Having that timeline in front of you will make it easier to prioritize contracts for review based on their renewal dates. You won’t have to worry about inadvertently missing a cutoff date and getting stuck with a business relationship you don’t want.
- Aligning Workflows
In addition to storing and reviewing your existing contracts, you’ll also want to create new agreements for the newly unified business. Teams from different legacy business units will likely be accustomed to divergent processes for drafting and managing contracts, which raises the challenge of change management. If your organization has a standardized contract lifecycle management platform in place, it will be easier for separate teams to align their day-to-day workflows around it.
The more user-friendly the platform is, the easier it will be for new employees to adopt it. Features such as drag and drop tools reduce the need for extensive training. In addition, if your teams still work in separate offices, a cloud-based system for drafting and managing contracts will allow them to continue working seamlessly on both new and existing agreements.
- Promoting Efficiency
The speed of AI enables teams to review contracts and create templates in a fraction of the time that manual processes would take. That’s vital for businesses that need to streamline operating models and cut costs following a merger. With less time spent on rote tasks, legal departments and procurement managers can focus on strategic decisions that add value for the business.
- Identifying Revenue Synergies
In addition to creating economies of scale by eliminating redundant parts of the combined business, a merger or acquisition can increase the appeal of a business’s offerings by expanding them. Perhaps the businesses had some buyers in common, who will now appreciate the convenience of having one provider to work with instead of two. Alternatively, one business’s existing customers might benefit from what the other business can offer. Contract intelligence can empower business development teams to identify these opportunities with existing consumers and pursue them.
Is your business ready for a merger?
Schedule a demo to learn more about how Evisort can help you proactively centralize and streamline your contract management operations across teams and businesses.