A Worldwide, Multibillion-Dollar Company Facing Increasing Contract Complexity
CobbleStone Software was approached by one of the leading airplane manufacturers, referred to as Company B (for confidentiality purposes), to help them better manage their contract compliance. The worldwide, multi-billion-dollar company has been managing contracts for decades, but their size, number of contracts, and contract complexity called for a modern contract management software solution.
Furthermore, Company B wanted to track commitments in greater detail, manage risks and obligations better, and track costs for their aircraft. Their legal team was under pressure from the new SEC regulations related to Sarbanes Oxley (SOX), and their federal contract required detailed tracking of their government-issued contract.
In search of a solution, Company B came to CobbleStone Software to review how Contract Insight™ could help improve their contract management process and comply with new regulations.
Company B needed a flexible contract management software product to help collect unique data fields for contracts based in their industry. They needed easily accessible counterparty details for aircraft-related contracts such as:
- Aircraft parts, sales, and leases
- Aircraft insurance policyholders
- Aircraft fuel suppliers
- Aircraft storage locations (the hanger and gate agreements)
- And many other requirements
They had to meet regulatory and compliance obligations, identify other subcontracts on their federal contract, track minority participation, and, due to SOX, ensure that directors were aware of major contracts.
After seeing a demo of CobbleStone’s Contract Insight™, Company B decided our software was a good fit.
CobbleStone worked closely with Company B’s newly appointed general counsel and their legal managers. Their legal and risk professionals were seeking a better method of drafting and tracking contracts and related documents. They would spend hours managing contract details, determining terms and conditions, identifying business partner information, and discovering who is approving and monitoring each client, contract, and detail.
This article is not written to re-state or provide guidance provided by any laws or regulations as this subject is very complex. Keep in mind, I am not an attorney, and Cobblestone does not offer legal advice. You should always have an attorney in your state advise your organization. [Okay, the legal disclosure is out of the way; back to business.]
Implementing Contract Insight™
Several challenges were presented to us by Company B. We needed to analyze their goals, align the requirements, and provide a successful implementation. They needed a contract system to track the following:
- Their customers – typically, large airlines and companies
- Their vendors – suppliers, manufactures, etc.
- Relevant data fields – legal name, address, company size, service area, etc.
- Qualifications, credentials, certifications, and insurance coverage for their vendors, subcontractors, and suppliers.
- Their contract terms, clauses, provisions, aircraft sales, aircraft leases, and contract language
- Their lease and/or financing details and, since they are a multi-national company, they needed to know what currency as well.
They needed to ensure that their contracts were up-to-date each contract renewal year, and/or as regulations change. They wanted advanced notifications for renewal and expiration dates. They wanted all of this done now – and fast. Lucky for them, that is what CobbleStone and Contract Insight™ Software are here for!
So how did we solve the problem with Contract Insight™ Contract Management Software? Well it seemed like a big challenge, but it was done.
As we break down each part of the requirements, we see repeatable steps that are familiar to our organization. We leverage our 20 years of knowledge and successes and our out-of-the-box features of Contract Insight™ Software.
We understand that all contracts have similar details, but the regulations, lingo, requirements, and data fields for the aircraft industry are somewhat unique.
Step 1 – Data Fields
We must define each type of contract that the client requires. Then, we document each data field required for each contract type. These data elements often include:
- The 'counterparty' – vendors, customer, supplier, provider, etc.
- The customers – airlines, governments, large companies, and private owners.
- The contract types – aircraft lease, hanger agreement, gate agreement, insurance, financing documents, real estate agreement, supplier agreement, consulting, etc.
- Standard fields – effective date, expiration date, agreement terms, contract costs, financing costs, the department business unit the contract belongs to, the contract description, renewal alert date(s), status of the agreement, contract or policy amounts, limitation of insurance, tail registration number, engine serial numbers, and other industry fields depending on the category of policy or contract.
Step 2 – Requirements
We determine the agreement document, templates, and clauses required. This is handled via simple configuration (once the rules are defined). The system handles the rest.
Step 3 – Tracking Responsibilities
Tracking responsibilities are heavily relied on by risk alerts and approvals that are leveraged by Contract Insight’s™ workflow engine. We also need to document and configure the contract request process and contract management lifecycle.
- What happens after a new contract or policy request is submitted?
- What is the workflow process?
- What is each task?
- Who is the task owner, and how many days do they have to complete each step?
- What happens if an employee or legal reviewer is absent or rejects the task?
- How does the next workflow step get assigned for the contract (or policy) to be drafted and approved?
I recall over 26 fields that we configured for Company B’s complex workflow processing. This is handled by Contract Insight’s™ powerful workflow that is bolted to the contract request [a system for contract intake forms] and the contract record modules.
Step 4 – Post-execution Management and Tracking
We confirm the final approval for post-execution management and tracking. Company B wanted to know every liability and contract for an aircraft. They wanted the system configured so if they search by an aircraft serial number, any related leases, hanger agreements, fuel agreements, pilot agreements, insurance, finance, and other related documents appear. This was no problem since Contract Insight™, an advanced contract software product, manages contracts and associated contract documents in a single repository for each contract record. Post-execution management and tracking helps with legal discovery, management, and risk management and monitoring.
Step 5 – Final Configurations
Company B needed Contract Insight™ to integrate with their authentication software and their data warehouse. That was easy since CobbleStone’s configurable software has a data integration module.
Contract Insight™ Software made it easier for Company B, a public company, to comply with SEC regulations. Moreover, the system offers reporting to monitor next steps, filings, and related obligations. It also integrates with other software systems such as accounting systems, CRM software, e-signature software, and many others.
Improve the Process With Contract Insight™
An article cannot cover all aspects of Company B’s duties, or all regulations for the aircraft industry, but with a flexible contract software system like CobbleStone’s Contract Insight™ Software, you can easily track the data fields necessary, create and store related documents, track tasks and approvals, manage workflows and alerts, monitor for compliance and risk, and make your legal duty of tracking insurance coverage and provider contracts much easier. Take advantage of a contract management software to improve contract compliance tracking by contacting a CobbleStone Account Representative today for a free demo.