How the Law Department Can Accelerate Sales, Delight Customers, and Save $20 Million
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Legal and contract operations are no longer “back-office” functions, they’re critical to the success of world-leading companies. NetApp used Apttus Contract Management to centralize and automate sales contracting, leading to immense benefits in NetApp’s Legal, Finance, and Sales teams. NetApp’s legal team successfully turned an operational challenge into a competitive advantage, and so can you.
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How the Law Department Can Accelerate Sales, Delight Customers, and Save $20 Million
- 1. #AccelerateQTC Reid Davis, Irina Grinshteyn/ May 4th 2017 How the Law Department Can Accelerate Sales, Delight Customers, and Save $20 Million
- 2. Global Legal Shared Services Lead Reid Davis Global Legal Shared Services Manager Irina Grinshteyn
- 3. • Fortune 500 Data Management and Storage Provider • Focus on innovation to meet customer challenges • Best-in-class integration and commitment to openness • Seamless data fabric to connect to multiple environments and clouds • 13 consecutive years on Fortune “11 Best Companies to Work For” list
- 4. We Faced Several Challenges Across the Company Rapid growth and expansion into new markets Global inconsistency, decentralized systems and manual processes Customer and Partner feedback that it was difficult to do business with us
- 5. • Contracts stored in multiple locations • Related processes lacked global consistency • Contract terms and entitlements were not visible • Efforts to reflect contract terms in the Q2I process were manual and downstream • Creating contractually compliant sales quotes a high-touch effort performed by multiple functions • Subsequent reviews of orders by Order Management involved best efforts validation against numerous data sources Existing State for Sales Contracts was Suboptimal
- 6. NetApp Legal Unleashes Contract Data to Create a Competitive Advantage ProQuest Screen Shot Approach Develop a centralized Sales contract repository and workflow tool Design a metadata repository (MDR) Leverage MDR to provide visibility to additional contract data Utilize the account structure to ensure contract entitlements cascade properly Create specialized Contract Management (“CM”) team
- 7. Getting Started: Two Major Initiatives Project Denali: collected all Sales contracts globally Project Everest: determined contract terms to extract
- 8. Global Sales Contract Process Flow ProQuest Screen Shot Legal Negotiator Receives contract request Negotiates contract Update status to ‘Ready for Signature’ Manages contract execution Triggers to the CM team Quote to Invoice Team Updates contract repository Create quote Books order Invoices customer Contract Management Updates Apttus record Extracts contract metadata Populates MDR Update MDR Contract terms
- 9. Lessons Learned •Non-traditional skills needed for Legal’s CM team •SOX compliance a must •Flexibility to grow with business essential
- 10. • All Sales contracts stored in a central repository • Over 1.4 million Sales quotes auto-populated with contract terms • Average time savings of 8.5 minutes per quote • Cost savings of $21 million to date • 98% of all orders are booked the same week leading to increased customer/partner satisfaction • Streamlined order approval process with an 80% reduction in approval requests Results Achieved
- 11. Key Take-Aways Leverage deep-learning as a driver of growth Sales gains powerful, practical insight into customers and prospects Automate the creation/delivery of intelligent insights
Hinweis der Redaktion
- Let me introduce you to Reid Davis and Irina Grinshteyn who are legal luminaries and managers of various work streams under the Global Legal Shared Services team at NetApp. Global Legal Shared Services is a centralized, global team focused on efficient, technology-enabled, right-sourced legal support. Reid has supported NetApp for the past 3 years. Prior to this role, Reid worked for a law firm in downtown San Jose and graduated from Santa Clara University School of Law. Irina has worked for NetApp for the past 5.5 years and prior to that she worked in the legal departments at SAP and Business Objects. I will tell you a little bit more about NetApp, then I will hand it over to Reid and Irina to share NetApp’s story on how they accelerated sales, made their customers happy, and saved money.
- NetApp is Fortune 500 data management and storage provider. NetApp focuses its innovation to meet its customers’ most challenging data needs. They recognize the value of NetApp’s best-in-class integration and commitment to openness. NetApp’s knowledge and skills help customers’ envision, deploy and evolve their IT environments. NetApp’s vision for a data fabric that seamlessly connects different management environments and clouds guides the company’s innovation. Leading organizations worldwide count on NetApp for software, systems and services to manage and store their data. Customers value NetApp’s teamwork, expertise and passion for helping them succeed now and into the future. Creating a model company is at the heart of everything NetApp does. This means delivering value to each community we serve: customers, shareholders, employees, partners, and neighbors. The strength of NetApp’s culture attracts the industry’s best to work for our customers’ success. As a result, NetApp has earned 13 consecutive years on the FORTUNE “100 Best Companies to Work For®” list. NetApp implemented Apttus CLM solution in 2013 and since then discovered many benefits, which we will talk about in a short while.
- Thank you for the introduction, Punit. Ok, so I would like to share NetApp’s story with you and in order to do that, I need to take us back a few years. NetApp was faced with several challenges across the company: We were growing rapidly and expanding into new geographical markets. Not a bad problem to have, but in this environment it becomes increasingly difficult to manage when you have global inconsistency, decentralized systems, and manual processes (these were the only things that were consistent at the time). The biggest driver for change, however, was feedback from our customers and partners that NetApp was difficult to do business with us due to our inefficient quote to invoice process. It was clear we needed to makes some changes. We needed to address our internal operations model and make it easier for our customers to engage with NetApp. In fact, the goal was even more aggressive, we wanted to turn these challenges, or this obstacle, into a competitive advantage. NetApp initiated a fundamental and cross-functional transformation, aiming to make NetApp the easiest company to do business with. The strategic imperatives included: Increasing velocity of the quote to invoice process Quickly adapting to competitive pressures and market conditions, and Improving productivity At the time, the Sales Contracts current state was suboptimal. Contracts were stored in multiple locations and related processes lacked global consistency. In addition, contract terms and entitlements were not available or visible and efforts to reflect them in the Quote to Invoice process were manual and downstream. Creating contractually compliant sales quotes was a high-touch effort performed by multiple functions and the subsequent review of orders processed by Order Management involved best efforts validations against numerous manual data sources. Thus, Legal’s commercial contract landscape and the ability to operationalize and provide visibility to contract terms ultimately became the cornerstone for successful implementation of the strategy.
- At the time, the Sales Contracts current state was suboptimal. Contracts were stored in multiple locations and related processes lacked global consistency. In addition, contract terms and entitlements were not available or visible and efforts to reflect them in the Quote to Invoice process were manual and downstream. Creating contractually compliant sales quotes was a high-touch effort performed by multiple functions and the subsequent review of orders processed by Order Management involved best efforts validations against numerous manual data sources. Thus, Legal’s commercial contract landscape and the ability to operationalize and provide visibility to contract terms ultimately became the cornerstone for successful implementation of the strategy.
- The approach involved: Developing a centralized Sales contract repository and workflow tool (we use Apttus) Designing a metadata repository (MDR) to house transitional contract terms Leveraging the MDR to provide visibility to additional contract data, such as business terms Utilizing the account structure to ensure contract entitlements cascade properly Creating a specialized Contract Management (“CM”) team dedicated to managing Sales contracts, the MDR, and operationalizing contract terms Legal’s role would go beyond the traditional areas of contract negotiation, file-storing and risk mitigation. The team was being challenged to intelligently connect front-end support to back-office operations to streamline and drive the velocity and execution of business.
- Two major projects were launched to drive the new strategy – “Project Denali” and “Project Everest”. Project Denali involved collecting all Sales contracts across the globe. At the time, processes and decision-making were very decentralized. For project success, Legal needed global alignment on the search approach and standardization of definitions for high-level contract metadata. The General Counsel stepped up as the executive sponsor and an external project manager was hired to work with the head of the Legal Contract Management (“CM”) team. Together they led the global coordination effort. With a plan in place for a centralized Sales contract repository, it was time to figure out how to unleash the contract data. Project Everest gathered a broad stakeholder group to determine the contract terms Legal would extract and capture in the MDR. The approach was cross-functional and required many different facets of work and stakeholder coordination. Ultimately, the team agreed on three categories of terms. The first category was “transaction terms”, which was driven by the Q2I and Sales organizations. These customer facing terms would flow directly from the MDR and automatically appear on all quotes and invoices – eliminating the need for manual intervention. The second category was “business terms”, which was driven by various internal stakeholders. These terms represent the contract data teams need visibility to in order to drive key business decisions and to ensure contractual compliance. The third category was “special comments”, which was for special order instructions that were not captured by an existing MDR value. A special comment is created to trigger a special review by Order Management or Invoicing on a contract term that is not universally applicable – i.e. “per Master Purchase Agreement, and on US orders only, defer to delivery term stated on Customer’s purchase order”. Adding such comments is done cautiously as we do not want to impact order velocity unless absolutely necessary. Post-Denali and Everest the mission was to develop a sustaining process and to continue delivering significant business value through improved contract processing and practices. This included enhancing and developing MDR capabilities, migrating our contract management system
- Post-Denali and Everest we had a simplified, globally consistent sustaining process for our Sales contracts, which delivered significant business value through improved contract processing and practices.
- The Denali and Everest projects involved numerous stakeholders across multiple functions. Leading the way was the CM team, who engaged representatives from the following teams (among others): Q2I, Revenue Accounting, Professional Services, Global Support, and Credit & Collections. Developing the requirements and establishing the foundation took approximately two years, however Denali and Everest were part of a longer term strategy and the CM team was just getting started. Once the MDR went live, they turned their attention towards enhancement and design requests, continuous process improvement, and optimizing operational support. Along the way, a number of key discoveries were made: Non-traditional skills were required for Legal’s CM team. Early on, the head of the CM team realized she needed to resource her newly created team with a unique skill set to help bridge the front-office to the back-office. The skill set and backgrounds of the team included: Legal, Order Management and Fulfillment, process development/improvement, project management, and system business requirements development. These skills allowed the CM team to become experts in operationalizing contract terms. SOX compliance is a must. Now that we had a central contract repository in place and extracted contract terms were auto-populating quotes, we were in the thick of SOX compliance territory. While documenting every change to the MDR can be cumbersome at times, the SOX controls gave our stakeholders the highest level of confidence about the integrity of the data and the company the protection it needed. Flexibility to grow with business is essential. The ability to meet changing business needs has proven to be invaluable to our stakeholders. Against the goal of adaptability to dynamic market conditions, the flexibility of the system is utilized to easily add new MDR values, often within 24 hours and without IT intervention. A recent example is the assessment of contractual export language. Streamlined order approval processes Automated order acknowledgement Move to Apttus streamlined contract workflow
- Through Denali, Everest, MDR creation and ongoing enhancement efforts, we achieved a one-of-a-kind Legal/Q2I/business stakeholder partnership with the following results: All Sales contracts stored in centralized repository. Over 20,000 documents were collected and reviewed. Contract terms immediately available for quoting. Over 1.4 million quotes have been auto-populated with contract terms since the MDR’s introduction in FY13. With an average time savings of 8.5 minutes per quote this translates to a cost savings of $21 million to date. In addition, 98% of all orders received are booked the same week, leading to increased Customer/Partner satisfaction. “Creating the CM team and enabling sales contract terms to populate quotes helped transform the way we support our customers/partners by automating term compliance and accelerating the quote to invoice processes.” – Kathy Tyra (V.P. Finance, Operational Planning and Q2I) Streamlined order approval processes. For many stakeholders, the number of approvals decreased dramatically since MDR contract terms auto-populate quotes. The Credit team reported an 80% reduction in approval requests. The MDR also eliminated the need to maintain or reference manual spreadsheets as it became NetApp’s single-source-of-truth for contract metadata. “Legal’s implementation and maintenance of the MDR, allowing non-standard payment terms to populate quotes & invoices, has reduced our time for approving deviations. By having the automated approvals, we are better able to focus on quotes that require our attention.” – Tom Hendrickson (Senior Manager, Global Credit) Automated order acknowledgement (OA) protects against Battle of the Forms risk and eliminates manual mitigation efforts. Legal leveraged MDR functionality to send automated OA’s for every order to affirm NetApp’s terms of sale. The estimated annual savings for Q2I and Legal is $400K. This was also a huge win for Revenue Accounting. “[T]he automated OA capability made a significant contribution to standardizing order documentation with customers, which made a positive impact to the efficiency of our team’s order review process.” – Bryan McMichael (Director, Revenue Accounting) Move to Apttus streamlined contract workflow. Previously Sales contracts were stored in a stand-alone CMS that had been end-of-life for several years. Now, Legal is in one tool for the entire contract life-cycle – from new contract request to contract storage. This involved reconstructing 10,000 records and migrating 25,000 documents.
- The biggest lesson learned was to be open-minded about the ways Legal can support the business. Throughout this effort, our commitment to understanding stakeholders’ processes demonstrated Legal’s desire to help things improve and was the foundation for our ability to achieve. We provided Legal support in a non-traditional, yet impactful, way and the objectives aligned with our overall mission – to be a strategic business advisor, a risk management center of excellence and an end-to-end business enabler. Another significant lesson was to not only focus on the transaction itself, but also on the tools, processes and interfaces that support them internally. Realizing that, by changing and optimizing the internal handling, the company could save millions of dollars in costs while increasing deal velocity and thereby customer and partner satisfaction, completely changed the perception of Legal as a needle-mover on all fronts.