What parts of contract management can be automated and what role does data-driven decision making play? Where do blockchain and smart contract technology fit into all of this?
In this edition of the UpTech Report, host Alexander Ferguson meets with the co-founders of the AI-powered digital contract management platform, Revnue, to discuss contract automation tools and where this is all going.
Sunny Sharma, CEO, and John Cortez, COO, explain how contract management has typically been a highly fragmented space with dozens of different interacting parties. “About $28 trillion worth of trade was done last year in 2021, and if you look at trade, all that was done by contracts.
On an average, organizations lose about 9% of their revenue due to inefficient contract management,” explains Sharma. However, Revnue’s contract management software aims to change that, allowing companies to automate and unify numerous business processes related to contract management. Plus, they take it to the next level with their contract analytics, advanced reporting, and other tools related to contract management.
TRANSCRIPT
DISCLAIMER: Below is an AI generated transcript. There could be a few typos but it should be at least 90% accurate. Watch video or listen to the podcast for the full experience!
Sunny Sharma 0:00
Organizations lose about 9% of their revenue due to inefficient contract management.
Alexander Ferguson 0:11
Welcome to UpTech Report. This is our applied tech series. UpTech Report is sponsored by TeraLeap, learn how to leverage the power of customer stories at TeraLeap.io. Today, I’m excited to be joined by my guest, Sunny and John, the co founders of revenue. Welcome, guys. Good to have you on.
John Cortez: Yeah, Alex, thanks for having us.
Sunny Sharma 0:29
Yeah, Alex, good to be here. And thanks for hosting us.
John Cortez 0:32
Absolutely. So revenue is is a digital contract management platform. It helped me understand maybe Sonny can start his work very briefly. Keep it brief. What’s what’s the problem that you guys have set out to solve?
Sunny Sharma 0:47
Yeah, that’s a good. Yeah. So you know, about $28 billion worth of trade was done last year in 2021. And if you look at trade, all that was done by a contracts. And on an average, organizations lose about 9% of their revenue, due to inefficient contract management. So what we said to do was, we said to solve the problem of unifying contract management, with the rest of the business, as well as your operational data, to give business leaders a view into how to really manage your business, because contracts come down to exactly that. What are you buying? What are you selling, and the impact on the business?
John Cortez 1:34
Your target market for those listening, like if they listen to say, well, this could be something for me, what is your target market? Enterprise large enterprise mid market?
Sunny Sharma 1:44
Yeah, mid market to large, large customers, we are still getting into the enterprise space. Those are the target markets for us. Yeah.
John Cortez 1:52
What I kind of find fascinating when when I start to look at this contract management space, there’s, there’s several spaces, I think, like pre signature area, there’s there’s a signature post signature, can you just describe kind of like the whole contract environment?
Sunny Sharma 2:11
Yeah. So if you look at contract management, the way we divide contract management, or Contract Lifecycle Management is into three phases. The pre signature phase where there’s a lot of due diligence done, everybody’s involved in like, finance, legal procurement, business unit heads, redlining, authoring, all that happens, right? And then once everybody’s agreed on some, some parameters, or whatever is being traded, it goes for signature, and then post signature. In our experience, collectively, between John and I, we’ve been in industry for 28 and 25 years. No one does any due diligence on that. So what have you signed? What were the parameters? What are the attributes, all that gets lost in post signature, so pre signature signature and post signature. But to make it more complex, and to basically highlighting the fact that contract management is really inherently complex, there are multiple entry points into this whole journey. If you’re in legal department, you want to make sure that, hey, I want to be able to redline highlight issues, risks and opportunities in the contract. So where is that opportunity? Is there is a workflow, right? If you’re in procurement, you’re like, I want to look at all the financials and operational data to say, Are we signing the right deal with the suppliers, or with the customers if I’m in sales? And then if you’re in finance, you’re primarily involved in like, Okay, how do I make sure that we’re optimizing our cost? But not even that, let me see if you are in idea or technology, you have a different problem now, because you have a problem of like, okay, we have contracts, we traded something within the contracts, asset services, goods or whatever not, what are the attributes on those? How do I track that? And it’s completely disconnected today. So the whole journey of contract management is very confusing, is highly fragmented, and definitely not connected with the rest of the business.
John Cortez 4:18
We’re gonna get more into the technology side, and how you guys are solving this in a moment. But I I’m curious, again, on the journey of everyone how they get to the to this point. I feel like you spent like 20 years in the industry that you actually were at Microsoft and other places Sunny. I’m curious, like, how did you and John meet and how did this all come to fruition?
Sunny Sharma 4:41
Sir, I’ll start with my journey. And then maybe John can chime in after that he can complete the story. I’ve been, I’ve been in tech for way too long, 28 years, majority of that time at Microsoft and then half of the time leading a number of technology transformations. So if I look at my journey, I divided the journey to two components, a builder where I was building products, and then transforming basically where I was transforming businesses and technology businesses and regular businesses. So I led a number of business transformations, digital transformations. And throughout the journey, one of the most common components and fundamental elements of all the transformation in any business decision became cost. It was the same thing everywhere. Where are my costs? And how do I get 100% accurate on the costs? Because the current financial systems, the current cost reporting systems, the current solutions that are out there, don’t give you a full, holistic, accurate information on where is your business today. And so that journey is I was going through the journey, I happen to run into John. So John will complete his story do, John, maybe you can tell him enough in here. Yeah.
John Cortez 6:02
So I also actually met Sunny, while while on assignment at Microsoft. And I think just as sort of he articulated what was sort of interesting, and it took us a couple years to realize this. But you know, we quickly realize that everybody, irrespective of what department or group they’re in, they’re all relying on essentially similar or the same data to do to make decisions and to do their job. And what that same data is, it all boils down to his data that’s found in the contract. And when Sonny and I realized that we said, you know, we should try to implement the contract management platform, and we’ve tried every application and platform out there in the industry, but it just stops, it doesn’t complete the journey. It stops at, you know, after the after the signature phase or sometimes, you know, after the the the pre signature phase, it just stops, no platform ever completed that entire story for us. And what that ended up resulting in is a lot of manual work. Every time we were working on a project, whether it’s a divestiture merger and acquisition, data center, build out infrastructure, build out projects, it was the same information, every quarter finance would ask us, where are your assets? Have you deployed this, I deployed that we’d ran into issues where support contracts and other contracts weren’t renewed, because nobody was paying attention to it. And we realized, you know, the last year so that we decided, you know, let’s let’s build a platform to do just that to solve, not just the problem, but really build out that entire story. And that entire journey for customers in one integrated platform, because today, customers take five or six systems just to solve that, that challenge.
Alexander Ferguson 7:43
It’s a wonderful idea to have a unified contract management system through the lifecycle. I imagine it’s not an easy thing to tackle. Yeah. Can you speak to this journey that you’ve been on and some of those pieces that you’re you’re been having to overcome or work through in order to bring this to reality?
Sunny Sharma 8:08
Yeah, so I think one of the biggest things that we, we because John and I have been on the customer side, and we’ve been customers and have felt this pain firsthand. And even people who have worked with us, one of the things that we had to do was to really blend this persona and role of being a customer first, plus being a business owner. And there are two different, I wouldn’t say conflicting, or 180 degrees. views. But these views do have different priorities. You have to get a product to the market, you have to make sure you’re building up your business infrastructure, you’re building up sales, marketing, you’re expanding globally. But at the same time, you have to build a product that is customer first. So so that was one key part of the journeys where we had to really, really blend these two roles. How do we build a global enterprise grade business that solves this very complex problem for multiple departments across multiple industries. It’s not just technology industries, not the supply chain. It could be healthcare, manufacturing, construction, assisted living, real estate. So the platform has to be built generic enough. So any customer across any vertical could realize immediate value from the platform. So that’s one thing. And the second thing that we had to really go through the journey was to really prioritize the story behind revenue. So not only do we have to complete the fundamentals, which is obviously we have to deliver the pre signature signature point signature components of the contract management platform. We have to really think in this in terms of a platform and not a solution. And this is a slight difference. And when you think in terms of platform, you’re thinking an ecosystem, you’re thinking community, you’re thinking partners, you’re thinking, How do I enable and empower our customers and the community to build solutions on the platform. So that’s another pain, another painful or more tricky thing to do, right? Because it’s easy to build a solution is difficult to envision a platform. Very, very difficult. And so I’ll pause there and see if John, you have anything to add here as well.
Unknown Speaker 10:40
No, I, what I would highlight again, is, I think when we went into this and building this product, we built it to be very, it’s very purpose built, right? When we took a little bit of a different approach. Most organizations when they build software, they, they try to put all these features in and they’ll do some conversations with the customer. But oftentimes, they built a product without actually feeling the pain. But because we felt that pain, we purposely put in specific features that would address scenarios that we knew customers were facing. And the proof of this. And the validation in this is that when we go to speak to a customer, within five minutes of meeting with that customer, we’ve typically hit all of their pain points, because they just know and when we talked about that store, we we talked about the narrative, we talked about what revenue does, it resonates very well with our customers all the way from a finance, lead procurement lead all the way up to the CIO all the way to the CIO or CTO, or CFO. So we know we’ve really hit a homerun here, because we built a product based on experience, we built the product based on pain that we’re feeling. And strangely enough, those those those challenges of not only are not only still persistent today, but they’re made even worse because of global commerce, growing numbers of contracts, just the world is a much smaller place. And everything’s transacted with a contract. So it’s the icon
John Cortez 12:03
contracts aren’t going anywhere. If anything, they they’re only increasing. But I mean, I suppose the we’re definitely in and beyond the age of automation, we’re wanting to find ways to to automate new things. So when you look at at the contract management space, what do you see is kind of the key areas that can be automated and should be automated. And maybe Johnny will start this time, and then we can come back to Sunday. Yeah, I
Unknown Speaker 12:29
think the the biggest, the biggest point around automation, is really having a standardized framework around just contract workflows. And, you know, people’s participation. Because I think the biggest challenge right now, and the reason why contract management is such a difficult process and a program to define for most organizations, is because just the number of touch points between one group to another, getting that document from a legal team and Company A to legal team and company B is such a cumbersome process, its Word documents sent back and forth, it’s Hey, do you have the latest copy of the document who who has this, where automation comes in, it’s it’s centrally located, everybody’s looking at that same version. And then from there, once it’s approved, it goes through a signature. And then the biggest challenge there next, there’s getting the data from the contract into a contract management platform. So where we complete that story is from the pre signature to the post signature, and then the automated integration and ingestion of that data into the platform. So
John Cortez 13:32
well, maybe and certainly, we can talk about this. Now. It’s like when we talk about being able to intake and grab the content, I suppose you’re using some, some some algorithms in machine learning to be able to understand what’s inside the data? Or is it just simply aggregating like point A to point B, like if if something is in this field put to point B, just tell me a bit more about how your albums are involved?
Sunny Sharma 13:56
Yeah, so we have, we have a proprietary algorithm that we use, that we filed a patent on provisional patent that uses or leverages AI heavily. And so we don’t think that AI will get fully independent or autonomous for the next few years. However, we call this human assisted AI. Because when you extract information from a contract, which is done automatically through AI today, through our algorithms, the biggest challenge is a particular term or a phrase might have a different meaning for a role or a business at a certain point in time. SLAs for example, SLA for a business for perhaps procurement, that may not mean much in the procurement role. If you are in finance role, maybe that means a little bit more because you’re worried about penalties. If you are an operational role. It means a little bit more than finance, because now, there are many gray areas around SLA s, right. So every term and condition has to be carefully analyzed to figure out what the impact of not only that specific term and condition, or that parameter or that attribute is on the business. The bigger challenge that we’re solving is, what is the impact of that particular term condition attribute, or data point to the rest of the business? And that’s where I think there’s a big gap in the industry, because the solutions are so departmental focused, that you’re further fragmenting the business. Right? And, yes, our experience has been basically bring the business together.
John Cortez 15:54
Right? Gentlemen, go back to you have can you give me like a use case of maybe when your customers something in play of how, what does this look like if someone takes us through the entire lifecycle, and then you know, the RhoGAM gets involved, and it pulls that information, and then what they’re doing versus what the system is doing?
Unknown Speaker 16:09
Sure. So typically today and nine out of 10 customers, it’s the same story. Some customers have, you know, pretty standardized contract management program in place today, the majority of them don’t, they typically track their contracts in a spreadsheet. So if you if you go to most organizations, they’ve got multiple spreadsheets, where they’re tracking contracts, they’re tracking business spend, they’re tracking business revenue, they might be different worksheets within that spreadsheet, but then each department has their own spreadsheet, it has got one with all the assets where it’s deployed. Finance has one with depreciation schedules and costs, procurements got one with contract numbers. So it’s all it’s all a very manual process, and what’s even a predecessor and and unfortunately, a byproduct of that is that when it comes time to do reporting, when it comes time to do financial or annual or quarterly reporting, it’s another manual process and a mad rush to try to get all the data together, or when renewals come by. So that’s what happens if it’s organized chaos. What happens now is when they when they onboard into revenue, we sit down with them. And we really define what are they trying to achieve? What are the important parts of the contracts that they want to, you know, keep track of and record of, and then we build that we have automated processes in place today, where we can automatically pull the data directly from the spreadsheet and import input that directly into revenue. So that is an instantaneous process. Once we do all that they suddenly see all of their data come alive inside revenue. For new customers, when they onboard a new contract, and they upload it directly to our system, we have multiple ways where the data can automatically get pulled and ingested. But suddenly, the end result of that is processes and manual steps that used to take days weeks are now accomplished in a matter of minutes and an hours versus before. So the time saved the resources saved, and allowing them to focus on more business value activities is literally happens the moment that they get interrupted.
John Cortez 18:14
Interesting, interesting. When when you pull into the system curious that I mentioned there’s kind of where it is now and where you’re planning on it going? Does the system understand what’s actually written in the contract? Is there natural language processing involved in this? Or is it more, it’s looking for some pieces like this described to me that how a little bit all that works?
Unknown Speaker 18:33
Sure. So when when a contract is brought into revenue, our AI engine basically goes through the entire contract. It’s a It’s powered by AI. And it’s also got machine learning capabilities. And we have a number of algorithms built in place where we’ve already predefined and extend the system understands what basic terms and contracts and conditions are based on industry standards. But because we’ve gone through 1000s, and 1000s of contracts from other customers with similar terms and conditions, multiple countries, the system is much quicker than all three of us combined. And try to understand those correlations. But more importantly, fill in portions of our contract form to say, here’s the start date and end date that I recognize from your contract. Here are some of the interesting terms and conditions that are part of the contract. Here are risks associated with the contract that you may or may need to be aware of right? This is set to auto renew, do we want to have that as that part of our governance process. So we start to take in all of those factors. And the system becomes more intelligent more and more by the day as it processes more contracts. But we’re at a point now where when a customer on boards that contract, they’re getting more insight into that contract than just simply by reading the contract itself. Everything’s visible to them. All of that extra metadata is captured. And then we can do reporting so they can search across any of those terms and conditions. And then all of the reporting and dashboards just come to life for customers. And then with our NLP, they can ask questions and interact with their data. Like they’ve never been able to before.
John Cortez 20:08
It’s it’s I know, it’s a journey when you’re using machine learning of first getting the base layer of Katie to understand what’s in there great. And then can can someone interact with it, and then even give me the point where it system can provide ideas and suggestions on what to improve, which I feel like is, is where you guys are headed. I’ll come back to sunny a little bit on on describing a little bit on that, like, where do you see like data driven decision making going and headed with with your type of platform?
Sunny Sharma 20:37
Yeah, so and then I think, to also just, I’ll just add on to John’s journey, and then complete the answer here is one of the things that we are very proud of is it’s a self learning system. So as you interact with the system, the system is learning from your behavior and what you do on what you really prefer. So the more contracts you analyze, the more contracts you upload. And when I we use the term contracts, generically, this could be any document, the system is learning, and it’ll say, Hey, by the way, for these types of contracts with these suppliers, these are the specific types. So if you upload a new contract for that particular type with that particular supplier, with that service, the system will tell you that wait a minute, these were supposed to be your standard terms and conditions, and we see a risk, right. So we’re taking it a step further. Because imagine the power of now, the whole construct that we have is that we want to bring the business together. It’s a connected business. And that’s what we’ve experienced as customers. on the customer side, you want the person in it, and finance and procurement and legal to be looking at the same set of data and ask different questions, but get consistent answers based on what they’re looking for. So it has to be a system of record. And there has to be intelligence layer that basically makes sense of what they’re asking for. So imagine the power of this, where you have all this contract data and data points. And you blend that with business data, and operational data, and a number of other data items seamlessly. And then the system begins to give you very powerful recommendations, I’ll simply simplify it for everybody, very simple. Just assume that you have a phone, contract with a cell phone provider, you go into revenue and assume that you’re managing that as a customer, which is not a very typical use case. But imagine that you go into revenue. And the system tells you that by the way, we noticed that you’ve paid this much with at&t, you renewed at this number, you save this much. But we also know that you could save more by switching to Verizon. And these are the benefits you would get. Now, having access to that data is extremely powerful for decision makers. Because not only are they relying on a system of record to make a decision, they’re now getting more and more aware and intelligent, because the system is bringing all this data together to give you recommendations to support your decision. And to summarize my, my experience, this is something that John and I experienced all the time. Every time we were looking to do a divestiture, we were looking to do an m&a, we’re looking to make a decision on a certain element on the business. Our biggest issue, one of the biggest issue was I just wish somebody would tell me what to do here. Or I wish somebody would tell me looking at all these data points, what is what are some of the right things that I could do, right. So now the system becomes more smart so that we are actually getting AI to a point where the AI is actually assisting businesses on making decisions. And these are not just cell phone decisions. But these are millions and billions, billions of dollars of trade. And if you and we tell this to customers, like the moment that deploy revenue, and they see this powerful future feature, they know that the savings have automatically paid for the platform. And this is an incremental value that we’ll keep adding to the business
John Cortez 24:26
i i think there there is so much potential and power in as long as the data exists and we can develop then the right systems, algorithms, AI our everyone terminology you want to use to provide the feedback to make better decisions. We’ve seen enough sci fi movies Ironman with Jarvis talking back and telling status updates of how our suits doing but it’s the nice thing is that what I’m excited about is the real applications coming through and later where you know may not be flying iron suits and into the sky but in our business be able to understand, hey, you’re actually approaching it particular area that you probably need to take a look at this and this piece and this piece. And here’s a potential way to solve this issue. I mean, that’s powerful insight. That sounds like we’re not far away from that happening for that for that to happen.
Sunny Sharma 25:15
Am I right? Not? Yeah, we’re not. Without saying much, I think we definitely something that we are, we’re revolutionizing the industry here, because we do feel that the contract management industry needs a revolution. And we are bringing that because I will give you another use case here that, imagine you are a CEO or a CFO, you’re on the road, and you need to make a business decision based on something that you are in a meeting, right? You could literally ask the system a question on something related to your contract, you will get a real time answer based on multiple data points. Whereas you are in a meeting or as you’re driving, or as you are conducting a transaction. The power of that has is like this, that’s immense amount of power in having access to that sort of unified and seamless data at your fingertips. But the other more more magical thing here is that the fact that you have now the ability to inter interface with the system in pure English makes everybody’s life very, very easy.
John Cortez 26:27
Yeah, you don’t need to pull in a data scientist have to pour through all the the the the content, you have the data, you have to be able to get those insights that you can just ask in plain questions. I mean, if we’re in a Google search world that we’re in, let me just find my answer by googling it. Now I’m a PhD as a doctor, because I can get my my MD answers right there. We should be able to do the same thing with our with our business data. I’m curious, this is kind of a side question. I don’t know if it really plays in or is factors in where you guys are headed. But when you look at the way contracts are headed and different ways that it can be formed you some lot of conversation around blockchain and smart contracts and different things like that. Have you? Have you thought about any of them? I’ll go to John, and just hear your thoughts on Sunday as well. But is that factored in anything? There?
Unknown Speaker 27:15
There are some things that we’re looking at definitely that are blockchain related. There’s a lot of there’s almost a new blockchain available, you know, daily, right. And so when we sort of look at some of these capabilities of the blockchain, what’s interesting for Sonny Nye is where can we leverage the blockchain to really connect buyers, customers and suppliers. So I think that that’s one dimension we’re looking at. But I think the most appealing component of that is really just when we talk about system of record, you don’t get much better in terms of system of record or ledger, when you talk when you you know, when you when you talk about a blockchain, right? So it really becomes the focal point and the Bitcoin Blockchain.
John Cortez 27:58
I was having a conversation on a previous episode with someone who’s talking about it. He saw the future of it as being like the one unified ledger, that every business out there, because it’s all publicly visible, sort of, I guess, how you define it. But I mean, could that be the future where we’re all contracts or just on the on this, this, this blockchain that makes it seamless? And everyone has access to it? And it could? Could that be a future?
Unknown Speaker 28:26
It? Certainly, you know, it certainly could, I think, you know, I would be remiss if we didn’t start to bring up, you know, privacy issues and all this stuff, and you know, decentralized finance and all the fun stuff that’s happening right now with crypto and all that. But you see where the world the world is going right now. Right? And we have countries that are looking at Bitcoin as their primary currency. Right? And when you talk about decentralized finance and banking, it just makes sense that once we sort of get the the underlying infrastructure of just the blockchain and finance set, you know, using Blockchain and everything’s kind of ledger based, it just lends itself to that’s where contracts, you know, ultimately go, right. It’s just a matter of, you know, how far companies will want to do that. I think we just have to get out of this mindset that, you know, the blockchain is a scary thing. Right. It’s, it’s I think it’s certainly going there that there are some things are working on that we’re considering. But yeah, it’s definitely something we’re looking at.
John Cortez 29:24
Very cool. Well, I’ll kind of end here with any practical tips or insights on on how business leaders can shoot can or should be looking at automating their contracts or or business process, not to say with your product, obviously, it could be but overall, just what what should they be looking for. Sonny, you want to start?
Sunny Sharma 29:46
I think one of the first things that the business leaders need to get a handle on is really automate and provide governance on where all the data is, which is we started with post signature phase, and that’s where there’s a lot of dysfunction today in the industry, right? The pandemic has really highlighted the fact that as soon as we everybody hit the pandemic, they’re like, Okay, what did I really sign? And where is that piece of paper or digital document that I signed. So I think it’s very critical that business leaders, as they look at contract management, holistically, as a, as a maturity function, they look at it in different phases and stages. So instead of looking at contract management, and say, this is a pretty big thing to do, we always recommend that they start small, they look at one component that is the least disruptive, but has the biggest value, which is look at the pulse signature phase, and say, at least start to build governance around that. And then as you build in governance, look at automation. So you build but bringing systems, bringing documents or contracts automatically into a centralized, centralized repository, make sure that data is extracted, and it’s accessible. You’ve gotten to at least the first phase of maturity level, then you move up next, then you say, as I transact things, how do I transact? And that’s where automation, right? And then the as you move to the next level of level of maturity, you’re looking at, like now, how do I integrate with my other business systems seamlessly, and begin to build automation there to derive more value from this rich set of data that is residing in different places in my business? So I think one of the biggest thing, guys is to all my peers in the industry, having been on the other side, as you’re adopting technology, look at incremental changes, versus trying to revolutionize the entire organization, which can be very expensive, and very disruptive. John, anything from your side?
Unknown Speaker 31:47
I think I think I’ll just you know, what all I’ll sort of close that thought out with is that when people look at our solution, and they think, a platform and all that, you know, we’re really making, we’re really bringing this this notion of a connected enterprise to life, right? It’s not even just around contract management, but it’s getting teams and units and departments and people working together. And it really just brings a whole set of efficiencies that I think for customers who have never even conceived that idea because they’re all stuck in spreadsheets all day doing things very manually. It’s an eye opener for them. And as they start to listen to our journey and where we’re going with it. It’s a It’s really exciting for them to hear, but it’s also equally exciting for us to tell them that story. So
John Cortez 32:30
destiny, John, thank you so much for sharing some insights on on contract management systems, what you guys are building and part of the journey that you guys have been on and continue to be on the future of where we can go. I’m excited for for that to become a reality really guy. Glad to have you guys on. Great. Thanks, Alex.
Sunny Sharma 32:50
Alex, thank you so much.
Alexander Ferguson 32:52
Absolutely. Thank you. On the next episode of UpTech Report. Have you seen a company using AI machine learning or other technology to transform the way we live, work and do business? Go to UpTech report.com and let us know
