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Contracting as a data center

February 25, 2013

Last week I was talking with an attorney at one of the top London law firms. He made the observation that ‘data centers lie at the heart of the new economy’.

it strikes me that the corollary of this is that those who own or manage those data centers – and consciously work on disseminating data that is of value to users – will be the beneficiaries of that economy.

Contracts – and the contracting process – offer a wealth of data, yet today it is typically not consolidated, let alone mined. There is a remarkable opening for those with the imagination to support data consolidation and mining, who commit to enabling others rather than acting purely as a point of control.

This is a far cry from where most contracts and commercial groups stand today. For example, in a recent roundtable discussion on ‘big data’, most of the contracts and legal executives protested that they are still too busy building systems to capture all their contracts; until then, they cannot focus on these grand ideas of analytics and using contracts as a driver for business performance.

I believe this is entirely the wrong focus. if they set the vision of contracting as a value-add data center, then issues such as compliance will become obvious imperatives. And the contracts function will be positioned to deliver real and sustainable business value as the driver of commercial competence.

4 Comments
  1. Some great points Tim, often as a profession we get drawn into the detail (in this case the data) rather than truly understanding the outcomes and therefore try to ‘boil the ocean’. Maybe what we need to focus on as a profession is ‘big information’ rather than ‘big data’. In the analogy of the data centre, rather than just running the data centre we would be focusing on the services that leverage the data. Starting small and focused and building out from there.

  2. Edward Willey permalink

    I think that one major point of resistance will continue to be the way executive management often view the legal and contracts functions. Are they a necessary evil? Should the company set a firm target (maximum) on the % of revenue allocated to legal and contract management? The serious challenge I see is in persuading the folks at the top of the organization to build up several key resources in the company (not just legal or contract management) in order to be leveraged for profit-making initiatives and business transformation. The key term here is “investment”. Since the financial crash here in the US, companies have instead been focusing on the bottom line (net profit) and preserving the top line. What kind of investment are our organizations willing to make in building these core competencies? What can we do to change the way we are viewed?

  3. Jonathan Schachter permalink

    I was researching the issue of best practices for managing contract and contract management data on the website and came across this. It is exactly this viewpoint that I am trying to impress upon my organisation. We currently use a company wide document management system that appears effective on managing retention and access to documents but falls short as a data center and tool for improving contracting and business performace. I’d be interested in hearing more about how others have worked within their organisations to implement the contract data center approach–Software used, conventions, and general practices.

    • Jonathan
      I have asked my colleague Jim Bergman to get in touch with names of some companies that can help and to offer a few examples. these are early days, but there are some good success stories of data-driven groups. see also my blogs this week relating to quality and asking the right questions.

      Tim

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