Icertis: Reducing risk and ensuring compliance through cloud management
Samir Bodas, co-founder and CEO of Icertis, speaks to how the ICM Platform helps companies lower cost, reduce risk and ensure compliance in their supply chain amidst regulatory change.
Seattle, Washington is a hotbed of digital innovation and home to contract management specialists Icertis. Co-founder and CEO Samir Bodas worked at Microsoft in the 90s but when the millennium turned switched focus to start-ups - Icertis is his fifth, and most successful venture. “To build a successful software company you either have to create a technology wave or ride one. For us, it was the latter.” In its early days Icertis was prepared to bet on cloud. “We asked ourselves what type of enterprise software would move to the cloud and realised any that touch an external entity - customer, supplier, partner etc - would go to the cloud,” explains Bodas, who recalls working his contacts at Microsoft before the software giant’s Associate General Council suggested Icertis build a contract management system. “We got the specifications and the opportunity to develop something with Microsoft as our first customer - the only requirement was that it had to be with Microsoft’s cloud in the ERP surround space. We built it, they licensed it and we were off to the races!”
Many races have since been won by the company as the Icertis Contract Management (ICM) Platform has grown to deliver enterprise-wide contract management software for a diverse customer base (including ABB, Cognizant and 3M) supported by ICM Apps and ICM Experiences tailored for Microsoft Dynamics, Microsoft Teams, Office 365, Salesforce and Coupa. These allow users to create contracts with a single click, eliminating the problem of siloed data with an end-to-end solution for sourcing, procurement, inventory, supplier management and all associated contracts.
Contract management is not a new phenomenon, but contracts are now being digitised for more and more. “Before, they were pdfs or scanned but nobody analysed the words within them like we can today with AI and Machine Learning,” adds Bodas. “Through our ICM Obligation Management app we can apply our technology to a contract and sniff out the obligations within by using AI. These could be commercial obligations or related to SLAs, insurance, drug testing and future innovations… We can make sure these are tracked and make sure your suppliers are living up to your commitments and that you are delivering on your contractual promises.”
A recent McKinsey study estimated leakage due to unfulfilled obligations at 2% so it’s no surprise that this app has been met with a positive response. “As one of the world’s leading professional services companies, it’s critical we closely manage the obligations enshrined in our contracts,” says Frank Marty, Global Head of CLRM at Cognizant. “Understanding and fulfilling our commitments to customers is critical to successfully delivering shareholder value.”
Bodas is also keen for Icertis to embrace Blockchain in the smart contracts space. “People thought it was a solution looking for a problem,” he recalls. “Now it’s recognised as a way to submit information to a ledger and achieve insights anonymously. In a multi-tier supply chain, how can you make sure everyone is following the rules? Multi-tier supply chain contracts can be submitted anonymously via Blockchain, allowing us to unearth contractual risk and alert the parties that might be affected.”
Key partnerships are vital for Icertis to drive innovation and Microsoft has been on board since day one. “The UI of Office 365 is very important to us because it’s where lawyers spend a lot of their time - you can now access the power of our platform straight from Word.” Icertis has also partnered with Workday (using its SCM suite to help manage employment contracts) and Adobe (utilising Adobe Sign and Acrobat Reader). “A contract is the central piece to everything you do in business and needs to be accessible,” maintains Bodas. “We’re like Switzerland, we want to integrate with everything around us!”
Integration is key for Icertis and Bodas champions the value of contract management for sourcing and procurement. “The most important thing our system is able to do is, in addition to containing or lowering cost, is to lower risk and ensure compliance. The challenge in supply chains, or any kind of sourcing, is how you keep abreast of regulatory change and internal policy change. This is critical with Brexit on the horizon…” he warns. “What actually happens to contracts when the law governing them changes? Do you re-write them? Do you amend them? By digitising we become a sentry for our customers.”
Historically there are four core systems of record in organisations - CRM for customers, SRM for suppliers, a third for employees and a fourth for transactions to detail commercial developments. Bodas believes Icertis is at the forefront of a sea-change; “Never before have we had a system of record across a company which details all your commitments, entitlements and obligations. Until now it’s been distributed in various silos. We are the fifth system which gives you a single source of truth for all of your obligations. Contracts are powerful documents offering the potential to maximise revenue, simplify compliance, cut costs and reduce risk, which is why we plug into all the systems to provide a better view of the gap…. What we call, ‘eliminating the data crevasse’ that companies fall into when data is siloed.”
Spend Matters recognizes the impact that Icertis has had, maintaining that it is “setting the functionality bar for contract lifecycle management” and “pushing some of its competitors off the map”. As competition and vendor innovation continue to accelerate in the procurement software market, functional gaps between competitors are converging across the overall SolutionMap source-to-pay benchmark. This is not the case with Icertis as it continues to outpace others in releasing new capabilities.
This has led Airbus to appoint Icertis to help bridge its own data crevasse between sales side and supply chain contracting. Bodas elaborates: “When you are building to order you don’t start constructing an aircraft until after you’ve received the order. Suppliers need to be configured and on-ramped when you sign the order. Icertis allows Airbus to ensure its suppliers are able to view a proposal that’s in the process of selling an order then the two processes can occur in parallel so when the deal is signed the suppliers are locked in. The resulting commitments made are back to back with the suppliers allowing for transparency around quality control and penalties for delays etc.” Klaus Richter, Chief Procurement Officer at Airbus is excited by the prospect of this transformative approach with Icertis: “The ICM platform and ICM Sourcing app will allow us to digitally transform our commercial foundation in the supply chain, ensuring best in class supplier evaluation, selection, contracting and collaboration - all while reducing supply chain risk.”
Thanks to this growing customer base, Icertis has been growing its revenue by almost 100% year on year. Europe accounts for 40% of that revenue where the company has six offices allied to four others in Australia, Singapore and India. Bodas notes Europe is better embracing of digitisation and staying competitive, hence the plan to open a new office in the Nordics following the recently launched digital support centre in Sofia, Bulgaria. “In 2019 we’ll be building our alliances for further collaboration with other software vendors, because best of breed is where the world is going,” he says. “The challenge becomes about threading the best of breed software together so the data can be actioned properly. We’ll keep betting on expansion because this is such a horizontal space and everybody needs contract management because everybody has contracts. Our mission is to be the contract management platform of the world.”
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