Case Study
FTI Technology Helps Technology Manufacturer Prevent Millions of Dollars in Revenue Leakage Following Contract Management Transformation
A global financial and retail technology company was undertaking multiple companywide initiatives to increase operational and financial efficiency. A key challenge identified was a lack of centralized contract management for customer contracts, contributing to revenue leakage and other negative impacts to the business. The organization determined a contract repository was crucial to optimizing commercial contracting practices across the company.
Situation
Given the company’s presence in five unique regions, collecting relevant contracts was itself a challenge. Regions followed unique approaches and used different systems for contract management. In addition to collecting contracts from across the globe, the team needed to organize numerous client functions and align stakeholders to secure their buy in.
Collection efforts resulted in more than 60,000 documents in a wide variety of languages and agreement types. A critical first step was to apply contract analytics and workflows to efficiently group documents, identify key information and reduce the population to only relevant documents. The company also needed an efficient way to create and maintain a consistent data structure, so contracts could be easily accessed and queried in a new contract management tool.
One question from the company throughout the engagement was if they were maximizing the value from their customer contracts. As a result, a key area of focus was creating a data structure that enabled multiple stakeholders to identify opportunities for improved commercial positions, including revenue uplift provisions, payment terms and service-level agreements.
Our Role
FTI Technology’s contract solutions experts have extensive experience in helping clients optimize their contract management workflows, derive insights from contract data and complete complex contract analysis and review exercises.
To help the client create a repository as well as identify opportunities for improved contract language and negotiation practices, FTI Technology provided the following:
- Efficient transfer, collection and storage of 60,000 contracts across five geographical regions.
- Analytics and artificial intelligence to rapidly extract data, gain insights and organize the contract population.
- A team of trained contract analysts to further review contracts and structure data for tens of thousands of contracts in numerous languages.
- Insights and supporting metrics to compare negotiated contract terms to expected company standards.
Our Impact
The results of this contract transformation supported the client in establishing a centralized contract repository. This helped uncover business value within the company’s contracts and establish a path to take specific actions to improve the business. With the newly established repository, the client has been able to identify and mitigate millions of dollars in potential revenue leakage and make better decisions about contracts in real time.
Specific results of the project include:
- Uncovered nearly $20 million of past revenue potentially lost due to unfavorable pricing terms, and $6 million in opportunity to increase annual revenue through renegotiation.
- Analysis and insights of additional terms to help different business functions identify problem areas, particularly surrounding risks and liability.
- Robust dataset with dozens of datapoints to provide an understanding of historical practices and optimize future global contracting.
- Migration of contracts and extracted data to a central contract management tool to help meet financial, legal and other reporting obligations.
Experts With Impact
Meredith Brown, Senior Managing Director
Chase D’Agostino, Managing Director
Dori Milner, Senior Director