diCarta Takes on the Adoption Curve

As contract management market matures, provider's latest upgrade aims to please end users, executives, IT shops

San Carlos, CA  March 6, 2003  Contract management specialist diCarta this week rolled out the latest version of its flagship Contracts solution, adding features designed to please end users, business executives and corporate information technology shops as the provider seeks to drive higher adoption in what it views as a maturing contract management solutions market.

diCarta said the mission of Contracts is to automate the entire buy-side contract-management process and that the improvements in the new version 4 are intended to drive greater end-user adoption. The provider has also beefed up reporting and compliance capabilities to encourage greater use among executives, as well as improved the solution's integration with other enterprise applications in a bid to gain greater acceptance within IT shops.

The solution provider believes the contract management solutions market, which technology consultancy Gartner has predicted could reach $20 billion by 2007, has moved beyond the "early adopter" stage and now is reaching the point where broader adoption is going to become a reality. "We used to have to go out and create demand, and now we're getting [request for proposals]," notes Mike Kaul, president and CEO of diCarta, adding that the RFPs coming into diCarta are becoming very sophisticated in terms of their requirements for a contract management solution. "We see a lot of demand that is very complex about the business drivers, and to us that's an indicator that this is a maturing space," he said.

Moreover, the provider said that currently, with about 11,000 active users handling their agreements through diCarta's Contracts solution, the average user spends three to four hours per day working in the application. "Automated contracts management is becoming part of the professional's life," Kaul suggested, and diCarta is hopeful that the expanded feature set in the latest version of its flagship software can make the application as integral a part of the contract professional's daily work life as an e-mail program and Web browser.

"Version 4 is about three things: adoption, adoption and adoption," affirmed Ammiel Kamon, vice president of marketing and business development for diCarta.

For end users, diCarta has added a feature called "Intelligent Roundtrip for Microsoft Word," which lets contracts professionals to edit contracts in MS Word while preserving the controls and business intelligence of the Contracts solution. This feature is able to automatically reconcile changes to clauses, language and business terms between contracts edited in Word and the Contracts application, even allowing for offline editing and subsequent synching with the document in Contracts' primary document repository.

This feature would allow, for example, a vice president of purchasing to take a Word file of a contract along on a trip in a laptop, edit the file in Word on the plane, e-mail it as a Word document to a supplier for revision and approval, and then bring it back into the Contracts environment and synch the final document  with all the red line changes and comments  with the original in the contracts repository, all without installing any additional software (beyond Word itself) on the laptop or the supplier's computer.

Kaul suggested that the MS Word compatibility could help encourage greater numbers of contract managers to begin using Contracts. "Contracting professionals are accustomed to negotiating and editing contracts in Microsoft Word," Kaul said. "Intelligent Roundtrip allows contract professionals to work the way they want to work, facilitating broader adoption."

Kamon seconded the view that the new Word compatibility would boost usage of the Contracts solution, increasing the number of users within an organization who would be likely to use the application and increasing the average amount of time that users will spend with the solution. Thanks to the Word compatibility, "there's more applicability to their daily lives," Kamon said.

For business executives, diCarta said it has beefed up the reporting and compliance features in Contracts. An "Executive Dashboard," new in version 4, was designed to provide contracting executives and senior managers with a bird's-eye view of key contracting performance metrics. The dashboard provides graphical snapshots and trend views of such key metrics as contracting productivity, workload planning, dollars under contract management, contract compliance and evolving contract risk profiles. For example, executives can get a view of how many contracts are coming up for renewal in a given period so they can plan their workload. Overall, the ability to deliver a quick view of the business, as well as the ability to baseline and measure progress, is intended to provide executives with better, more accessible information for profit management and risk mitigation.

Also new in version 4 is the "Auditor's Workbench," which provides internal and external auditors with substantive testing and controls capabilities to improve audit efficiency. To better manage the company's risk over time, auditors are able to report on contracts that deviate from standard language or have a higher risk profile. They can also search a company's entire contracts repository and view any contract, even contracts hidden from most users. diCarta believes that by including auditors as key stakeholders in the contract management process, the solution will allow companies to better comply with both federal and industry-specific regulatory requirements.

Finally, for IT shops diCarta said it has improved Contracts ability to integrate with other enterprise systems, strengthening the XML integration framework in version 4 to allow for faster, repeatable integrations with enterprise apps from such providers as SAP, PeopleSoft and Oracle. The improvements, said Kamon, allow diCarta to be a "good corporate citizen with respect to how we fit into the broader IT infrastructure."

The new version also includes support for Western European contract language support to allow for broader use within multinational corporations. Explains Kamon: "Contract management as a space is maturing fastest in the United States, but we are seeing a lot of interest from multinational organizations that are headquartered in the United States. We are also seeing interest in Europe coming up. This is all about getting all your business under management, and you can't really do comprehensive contract management but do it only in one division and not the others, or do it only in the United States and not in your branches oversees. So this is to allow multinationals to bring their overseas contracts under management. And to do that, you have to cater to those languages, you have to cater to those currencies. And quite frankly sometimes the business processes are quite different. So the clause libraries need to take all that into account."

diCarta sees the Asia-Pacific region moving more slowly than Europe, but Kamon said the company is monitoring its customer requirements closely to determine when it needs to make the leap into supporting languages and currencies for that region as well.

Finally, diCarta has beefed up the security measures in Contracts with such features as password rules, expirations and lockouts, as well as integration with LDAP and a single sign-on framework. The password rules, for instance, allow for locking out a user who fails to enter his or her correct password three attempts in a row, requiring an administrator to reactivate the user's login. The rules can also ensure that users change their passwords over time, and the application offers role-level access to contracts so that only authorized executives can view or work with appropriate documents.

Kamon suggested that all the additional features reflect automated contract management's movement further up the adoption curve: Now that more contract pros are at least aware of the various contract management solutions available in the market and the "gee whiz" has gone out of the idea of managing contracts online, diCarta said it is adding more depth and breadth to its solution to make it more broadly applicable within the enterprise, helping to drive, hopefully, greater adoption.

diCarta said that currently its customers  which include such companies as Philip Morris division Kraft Foods, television network NBC, storage solution specialist Network Appliance and insurance company Aetna  are creating and negotiating more than 4,000 contracts each week through the Contracts application.

For more information on the potential return on investment in contract automation, see the February 13, 2003, iSourceonline article "The Quick Payback from Contract Automation."

For more information on contract management automation, see the article "Digging Out from the Contract Clutter" in the January 2002 issue of iSource Business.
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