Once your company is ready to be sold your whole focus is shifted to restructuring a whole new business system. It includes certain activities which need to be taken care of such as what the company is buying and what obligations it is assuming, the nature and extent of the target company’s liabilities, contracts, litigation risks and intellectual property issues, transitioning hundreds of employees, and thousands of contracts and much more. If anything in between gets neglected, it can introduce dangerous risks for the business.
There is no simple way to access the information when it is required most. Identifying key information inside thousands of contracts needs a resource-intensive, manual abstraction method that’s typically long and extremely costly. There’s a lot of work to do for legacy documents. You need to create a hierarchy because you will have documents within the documents that are multiple documents. Let’s say if somebody scanned them, their addendum with the masters is then one document, but the other person has them as separate documents. So, you know, there’s a lot of work to be done and then match up the masters in the end often, even the foremost subtle contract management systems are incomplete or have incorrect legacy contract information reason could be poor OCR documents.
Get all the facts on the table
A merger or an acquisition is an activity to unite two businesses and as contracts carry the crust of any business it is the most crucial activity to bring them in sync. The syncing might demand migrating data from one CLM system to another system or if the company/ies has its data still stored in cabinets and drawers then abstracting the key information and migrating it into the CLM system. The newly formed company might even decide to move to a new CLM system altogether.
Here are a few challenges which might come up during M&A company integration
- Bringing contracts on one platform – the companies might be using different CLM systems or contract management approaches to manage their contracts. The first and most important challenge is to bring all the contracts of the combined entity on one platform for better traceability and visibility of contracts.
- Syncing different terms and clauses – the second most crucial step or challenge is to bring different terms followed by both companies in harmony.
- Handling amendments or addendums – to achieve the above, the company might have to amend some of its contracts. knowing your data is the key to bringing everything in sync, for which key metadata extraction is pivotal.
- Failure to deliver an obligation – In the process of integrating multiple sets of contracts, teams might miss obligations towards clients and vendors. It is important to closely monitor different contract terms, important dates, and other milestones for a smooth flow of business.
- Migrating current or legacy contracts – Filling your repository with current data will be of limited use as your reports will be restricted to data fed from now onwards, missing all the important information buried in legacy (expired or still active) contracts. Resulting in incomplete reports generated through the system and missed obligations.
Automate the process
Whether you’re configuring a new CLM system or extracting contract data for migration into an existing CLM system, the process is incredibly tedious and repetitive. Each decision made carries a crucial impact on everything from data history preservation and master data relevance to security and compliance. In other words, getting it right the first time is business-critical. Automating these tasks helps make this transition easier and lets other people focus on the high-level work and the big-picture.
Advanced AI technologies can come in handy here and help to extract key variables like clauses, dates, parties, etc resulting in increased turnaround time of the legal system. The modern day’s CLM system can have your contracts into a central repository to address a large volume of incoming as well as legacy contracts; giving you access to pre-formatted and custom reports with flexible searching options so you can easily plan, and strategize helping you to take necessary actions. It can assist management make big decisions: on strategy, operations, technology, mergers, and acquisitions for its organization.
How Brightleaf can make a difference?
Imagine a world where you could abstract all the essential information from your contracts quickly and affordably. You can upload it easily into your contract management system, making your contract management system far more valuable. The important provisions from all your contracts are available immediately for analysis, to profile risks, manage obligations, and improve compliance. With automated contract abstraction, you can speed up your M&A process, with exceptional speed and accuracy.