Today's guest is James Courtis-Pond, CEO of AnyData Solutions which provides solutions, tools and services for data analytics and contract management. James spent ten years as a lawyer at two Magic Circle law firms and eight years as General Counsel of Edison Mission Energy. For the past ten years he has developed and delivered data analytics solutions and contract management and compliance solutions to organisations around the globe.
Just like many other things in life, data can’t be ignored. It’s true that some organisations might have historically found it difficult to prepare and analyse data, or not always have liked the results they found, but simply ignoring the data isn’t going to make things any better either.
In recent years the trend is increasingly for businesses to make a detailed and holistic analysis of expenditure on third party goods and services and this includes spend on external lawyers. There is a growing realisation that general ledger and/or chart of account information doesn’t hit the mark. Costs within any given expenditure category may be fragmented across many geographical locations, business units, offices and that the business as a whole may be procuring essentially the same products or services from a pool of multiple interchangeable suppliers - often with a wide variance in associated contract terms, service levels and, of course, prices. This fragmentation of spend can make it all but impossible for executives to rapidly answer fundamental expenditure questions such as "How much did we spend last year/month/quarter/week on legal services" or “Who did we spend it with and under what contract terms?"
Good Spend Analytics solutions are nowadays getting easier to implement, at reasonable cost (excellent ROI) and offer the promise of immediate and direct opportunities to implement cost base transparency, drive better deals with a smaller set of suppliers, understand and leverage your purchasing power, enforce contract benefits and realise tangible savings. You simply push (or pull) your internal invoice and purchase order data from your accounts payable system(s) to the software provider who then intelligently organises the paid invoice information into readily understood expenditure categories, map this to actual suppliers and expose immediate savings opportunities via presentation ready executive dashboards and reports.
Furthermore, this enables decision makers to slice and dice their expenditure data by numerous dimensions, compare and contrast spend across offices or cost centres and drill down to the actual invoice item detail to investigate any expenditure of concern or to seek cost savings. These systems can be quick to implement and are available as “software as a service”, which means that you do not need to seek capital budget or buy hardware or hire expensive database experts or systems technicians. You simply pay a monthly subscription to access the system and all your answers and insights.
Spend visibility solutions become even more beneficial when you add the capability to link your actual paid or pending invoices with existing supplier contracts. Too many enterprises have difficulty even laying their hands on relevant supplier contracts let alone enforcing the terms within them. Too many hard won contract terms are simply disregarded during day to day relationship management with suppliers (e.g. payment processing operations, renewal dates, pricing rebates). Embedding your contract terms within your payables processing can help manage cash flow by maximising contractual payment term benefits, highlight maverick (off-contract) spend, ensure that your supplier is applying agreed volume discounts and trigger contract breach alerts.
Interestingly Spend Analytics or Visibility solutions need not be enterprise wide. There is more than enough visibility, control, compliance and cost savings on the table to often make it worthwhile even on a departmental or category level. Legal Spend is one area where some global organisation are spending very significant sums on outside law firm services. I know several General Counsel who would give a lot to know exactly how much they spend with which law firms, and on what service lines, country, office, cost centre, geographical location, payment terms etc.
Armed with these insights from the data, a General Counsel is empowered to manage the Legal Department more effectively in ways such as: reporting accurately on total global (and regional) legal spend which helps accurate budgeting and global planning; analysing exactly how the spend breaks down across service category (M&A to HR advice) or projects which helps cross collaboration with other departments; and focusing on savings opportunities where there are too many suppliers in a service category that can be streamlined in number in return for better volume discounts and service levels.
The CDC has been working with in-house legal departments for over ten years, delivering a range of organisational change and personal development programmes in line with their strategy. Call or email if you would like to discuss how the CDC can help you and your team be even more effective.