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The neglected asset that erodes financial performance · The Leading Edge

• 0:03
  SPEAKER_00: Well, hello and welcome to the Leading Edge, a series which offers in-depth insights into the key challenges, innovations, and evolving dynamics of the contract and commerce landscape.
• 0:16
  SPEAKER_00: I'm your host, Nikki Mackay, Chief Development Officer of the Commerce and Contract Management Institute.
• 0:22
  SPEAKER_00: Now, in today's episode, which comes as part of an exciting four-part series to the Office of the CFO, the first episode, the neglected asset that erodes financial performance, we are looking at a critical but often overlooked issue, the fragmented commercial data sitting across organisations and what that means for financial forecasting and performance.
• 0:51
  SPEAKER_00: Now, our latest article, the first in this series, argues that contracts, negotiations, renewals, and commercial performance contain some of the strongest signals of what lies ahead.
• 1:06
  SPEAKER_00: Yet that intelligence is so rarely brought together in a form that finance can actually use.
• 1:13
  SPEAKER_00: So what does that look like in practice?
• 1:16
  SPEAKER_00: How can organisations move beyond functional silos, use AI to connect commercial intelligence, and give CFOs a clearer view of the future?
• 1:30
  SPEAKER_00: Today we are joined by Tim Cummins, Executive Director of the CCM Institute and Matt Patel, COO and co-founder at Malbec.
• 1:40
  SPEAKER_00: Tim and Matt are here to guide us through this evolving landscape.
• 1:44
  SPEAKER_00: So welcome to the leading edge.
• 1:46
  SPEAKER_00: Tim, Matt.
• 1:48
  SPEAKER_01: Thank you.
• 1:49
  SPEAKER_01: Thank you, Nikki.
• 1:50
  SPEAKER_01: Yeah, Tim, go ahead and um introduce and then I'll mention a few words about myself.
• 1:54
  SPEAKER_00: Yeah, so um, I mean, let let's let's hear from you first, Matt.
• 1:59
  SPEAKER_00: Tell us about um your role at Malback and what your focus is currently.
• 2:04
  SPEAKER_01: My pleasure.
• 2:05
  SPEAKER_01: So thanks for having me, first of all, Nikki and Tim, always glad to be here.
• 2:09
  SPEAKER_01: Um, my name is Matt Patel, as Nikki mentioned.
• 2:12
  SPEAKER_01: I'm one of the founders of Malbec.
• 2:13
  SPEAKER_01: We are an enterprise CLM solution uh platform.
• 2:17
  SPEAKER_01: Um, and I've been personally involved in the CLM space for over two decades and also been part of the IACCM Now WCC journey over the last two decades.
• 2:27
  SPEAKER_01: Uh my focus is how do we make contracts and the data that sits in those documents more visible and across the enterprise?
• 2:37
  SPEAKER_01: Uh, for the longest time, people have thought contracts is a legal department thing.
• 2:42
  SPEAKER_01: You know, we just need to get red lines done, negotiated, and signed and done so I can do my business.
• 2:47
  SPEAKER_01: Uh, I've always believed in it's the after the signature that matters most, not the before the signature as much.
• 2:54
  SPEAKER_01: And that's been my focus here.
• 2:55
  SPEAKER_01: And that's the way we have designed our platform.
• 2:58
  SPEAKER_01: So I'm delighted to reflect on how the office of the CFO needs to really prioritize what's hidden behind those contracts.
• 3:06
  SPEAKER_01: So looking forward to this uh discussion.
• 3:08
  SPEAKER_00: Wonderful.
• 3:09
  SPEAKER_00: And Tim, what's keeping you awake at night these days around uh the office of the CFO?
• 3:16
  SPEAKER_02: Oh, well, Nikki, I think you know this has been a long-term frustration for me.
• 3:20
  SPEAKER_02: I mean, my background is finance, not law.
• 3:23
  SPEAKER_02: Um, of course, I've picked up quite a lot of law through the course of a career that spanned doing contracts in one form or another now for over 40 years.
• 3:35
  SPEAKER_02: Um, but I have always tended to see contracts as economic instruments.
• 3:42
  SPEAKER_02: And um, you know, as recently as 2010, some 30% of contract management teams reported to the CFO.
• 3:53
  SPEAKER_02: In our benchmark study of 2025, that was down to under 10%.
• 4:00
  SPEAKER_02: CFOs have simply stepped away from this because I think so much has become way too complicated, and their ability to decipher contracts has reduced, and they've become seen much more as risk instruments, which have then pushed them towards legal function.
• 4:23
  SPEAKER_02: And of course, unfortunately, a lot of the technology that was deployed also then tended to focus towards a legal application rather than a financial one.
• 4:34
  SPEAKER_02: So there are lots of things that potentially keep me awake at night, Mickey, but one of them is that frustration that we're not actually taking advantage of contracts as a core economic tool for business success and more broadly for social benefit.
• 4:52
  SPEAKER_00: Yeah, absolutely.
• 4:53
  SPEAKER_00: And Tim, just just before we go on to to Matt with with the follow-up question, I uh you began this series with a letter to the CFO, right?
• 5:03
  SPEAKER_00: What did that letter say?
• 5:06
  SPEAKER_02: Wake up.
• 5:08
  SPEAKER_02: Grab the opportunity.
• 5:10
  SPEAKER_02: Um AI is transformational.
• 5:13
  SPEAKER_02: We've allowed our contracts to become so complicated because of the fragmentation you mentioned.
• 5:20
  SPEAKER_02: Uh I was involved with the rollout of ERP uh in its early days, and there was always that big concern.
• 5:29
  SPEAKER_02: It was reinforcing these functional silos, it was depending, creating an environment that was very rigid and rules driven.
• 5:40
  SPEAKER_02: And as soon as anybody started to deviate from those rules, we had a problem.
• 5:45
  SPEAKER_02: And that has come home to roost.
• 5:47
  SPEAKER_02: We have a problem.
• 5:48
  SPEAKER_02: The problem is that the world that ERP was introduced to, of standards of relatively static, predictable products and services, has evolved into a mess, a mess or an exciting melee.
• 6:06
  SPEAKER_02: I don't really mind which way you see it, but we do not have tools and systems that were designed for the volatility of today's markets.
• 6:15
  SPEAKER_02: They were not designed for this move from products to as a service towards performance and outcome-based contracting.
• 6:25
  SPEAKER_02: Today we have such an array of what we could be doing, but actually our systems and the lack of good data flows is inhibiting our ability to see that value.
• 6:39
  SPEAKER_02: You know, because we keep publishing it, we're about to do a whole load more reports reaffirming the extent of value erosion that occurs in contracts.
• 6:50
  SPEAKER_02: Do lawyers care about that?
• 6:52
  SPEAKER_02: Not especially, it's not their problem.
• 6:55
  SPEAKER_02: Should finance care about it?
• 6:57
  SPEAKER_02: Absolutely.
• 6:59
  SPEAKER_02: Finance is struggling in many cases because of today's geopolitical environment, the disruption in our markets.
• 7:07
  SPEAKER_02: CFOs are struggling to get growth and to improve margin.
• 7:11
  SPEAKER_02: They've got the answer at their fingertips.
• 7:14
  SPEAKER_02: They should be grasping it.
• 7:17
  SPEAKER_00: Absolutely.
• 7:18
  SPEAKER_00: And it's because um Malbec very much recognized that this is something that finance should be caring about, that Malbec are collaborating with us on this fantastic series.
• 7:29
  SPEAKER_00: And Matt, I'd really like your view and your experience.
• 7:32
  SPEAKER_00: Where does the gap between commercial reality and the financial forecast typically arise?
• 7:40
  SPEAKER_01: Um, so it depends on where we are in time.
• 7:45
  SPEAKER_01: If you had asked me this question five, 10 years ago uh versus now, it's a very different answer.
• 7:51
  SPEAKER_01: Today, we have AI and technology uh to save the day in that aspect.
• 7:58
  SPEAKER_01: And I'm let me explain why I say that.
• 8:00
  SPEAKER_01: First, most companies in the world are a for-profit business.
• 8:05
  SPEAKER_01: That means they're working with suppliers, they're working with customers to sell, buy products, services.
• 8:13
  SPEAKER_01: And they're there to make money, save money, and spend money in every which way CFO and finance is involved, right?
• 8:20
  SPEAKER_01: At the end of the day, they have to manage the cash flow, the uh accounts payable, accounts receivable, and all of the money that goes in and out of the company and then report, uh, whether you're a private company or a public company, report to the stakeholders.
• 8:34
  SPEAKER_01: Now, in the old days, before AI, when finance had to figure something out, they were stuck with spreadsheets, their accounting systems, maybe data coming in from ERP and transactional systems, but they had no easy way to understand what are the obligations and upcoming milestones and events and contract terms that they have committed to to put the company either in a safe place or at a risk.
• 9:02
  SPEAKER_01: And so basically, now the challenge for the CFO and the Office of the Finance is when there's a merger acquisition, there's a due diligence event audit, or maybe there's a board meeting or any kind of an event in the company, finance is asked with, hey, can you get me this data?
• 9:20
  SPEAKER_01: And it's usually this week.
• 9:22
  SPEAKER_01: It's not, hey, can you get me this data next year?
• 9:24
  SPEAKER_01: So they have a very short time to turn around.
• 9:26
  SPEAKER_01: Now, if you have 50,000 agreements to process to figure that out, you're not going to get that done.
• 9:31
  SPEAKER_01: You're going to rely on data that you have at your hands in Excel or whatever you've been tracking to report back because that's all you could do.
• 9:40
  SPEAKER_01: Well, times have changed.
• 9:42
  SPEAKER_01: You have amazing insight in those agreements.
• 9:46
  SPEAKER_01: And the gap is not a structural gap, it's not a people problem.
• 9:50
  SPEAKER_01: Um, it's it's basically how the organization is designed, where CFO and the finance office is considered this the financial arm of the company and disconnected from the commercial agreements and what's really happening with the buyers and the sellers.
• 10:08
  SPEAKER_01: Um, each function, if you look at procurement or sales, or legal, they're doing what they need to do.
• 10:14
  SPEAKER_01: And they have a task and they'll use the solutions and technology and AI to get the job done.
• 10:20
  SPEAKER_01: But who's overseeing on top of all of that so that finance can actually track the financial health of the organization?
• 10:28
  SPEAKER_01: And that's what we're focusing on.
• 10:30
  SPEAKER_01: And in in the subsequent questions as we go through this uh recording here, uh, I will talk about how that is possible.
• 10:38
  SPEAKER_00: Yeah.
• 10:38
  SPEAKER_00: So I want to thank you, Matt.
• 10:40
  SPEAKER_00: I want to build on that and turn to the idea that really is at the heart of this article.
• 10:45
  SPEAKER_00: Um, and that is that commercial data holds some of the strongest leading indicators of financial performance.
• 10:52
  SPEAKER_00: So um back to you, Matt, in practice, which signals do you actually think CFOs most often miss?
• 11:03
  SPEAKER_01: So let's look at recent times.
• 11:06
  SPEAKER_01: Um, if you think about signals, it's usually historically it's been a missed payment or a missed obligation that is flagged somehow in some system that finance is using.
• 11:18
  SPEAKER_01: But what's hidden in the complicated terms and 50 pages of signed agreements are those exceptions or the price caps or the provisions where the supplier can change the terms based on an economic or global event.
• 11:35
  SPEAKER_01: Uh, look at you know, last few years, we've been through the most change I can remember in my lifetime in a short time span.
• 11:42
  SPEAKER_01: Um, the oil crisis, where the price of uh petrol or gas has gone up a lot, tariffs imposed last year in different countries, uh, even go back to the COVID times.
• 11:55
  SPEAKER_01: All of these events somehow impacted finance.
• 11:58
  SPEAKER_01: Here's why.
• 11:59
  SPEAKER_01: When you have a complex, let's say you are uh in the business of manufacturing and supplying your product uh to your customers, but you depend heavily on a supply chain where your suppliers are located in Asia, Australia, Europe, America, South America, wherever they are around the world.
• 12:16
  SPEAKER_01: And when tariff or oil prices change, the supply chain is affected, the transportation and logistics rules are changing, the cost is changing.
• 12:25
  SPEAKER_01: And if that event happens and the finance team does not have visibility into how it can impact the cost going forward proactively, they're more reactive because there will be provisions where the supplier can change the per unit pricing if the price of oil went up by 20% or whatever the terms are.
• 12:46
  SPEAKER_01: But finance is usually reactive.
• 12:48
  SPEAKER_01: When the supplier changes the price, then they start to calculate, oh my God, there's going to be a$5 million impact in Q4 because all of these suppliers have changed their pricing.
• 12:57
  SPEAKER_01: But if they had that access to data and with power of AI, be able to proactively detect that, then they can forecast that and maybe even go back to those suppliers and negotiate better terms to reduce that financial impact into their organization.
• 13:14
  SPEAKER_01: So I think the uh WCC metric about 9% value leak uh in the contracts, because and that's I think it could be very high also depending on the industry.
• 13:25
  SPEAKER_01: Um, it is because nobody in finance can view or reveal this hidden in information in the agreements.
• 13:33
  SPEAKER_00: Tim, does that resonate with you?
• 13:37
  SPEAKER_02: Yeah, of course, absolutely so.
• 13:40
  SPEAKER_02: I think you know, we have to look at two levels.
• 13:43
  SPEAKER_02: One is the quality of data, even as it relates to an individual transaction.
• 13:48
  SPEAKER_02: And as Matt says, even there, very often the data is not easy to access, which means that uh a lot of the financial activity or response to a contract that isn't performing well is highly reactive.
• 14:08
  SPEAKER_02: But it goes bigger than that, and and Matt has alluded to this.
• 14:13
  SPEAKER_02: It's also the ability to understand the interconnect between contracts.
• 14:21
  SPEAKER_02: If I've got a supply disruption, which of my customer contracts are affected by it?
• 14:27
  SPEAKER_02: I don't know how much are they affected?
• 14:31
  SPEAKER_02: I don't know.
• 14:34
  SPEAKER_02: So much of what happens, and subsequent articles will dig into this more, is forced reaction, which is well, since I haven't got accurate data, let me try this sort of blunt instrument and apply a hammer to the problem because I don't actually have any other mechanism that I can use.
• 15:00
  SPEAKER_02: Um, that is what, as Matt correctly says, we have the opportunity to address.
• 15:07
  SPEAKER_00: Yeah.
• 15:08
  SPEAKER_00: Yeah.
• 15:08
  SPEAKER_00: Now I I'd like to bring in AI to the conversation now because it's where so much of the current investment is going.
• 15:19
  SPEAKER_00: Um so I guess my question is from what you've both seen in the field, is AI helping organizations really start to break down the commercial data silos that we've been talking about?
• 15:34
  SPEAKER_00: Or are we just making those silos simply more efficient?
• 15:39
  SPEAKER_00: Tim, what what are your thoughts on that?
• 15:41
  SPEAKER_02: Yeah, well, this goes to the heart of uh so much of what we are going to be talking about and which needs to be talked about.
• 15:49
  SPEAKER_02: We do a lot of research, as you know, Nikki, on what is actually going on, what are people doing with AI?
• 15:56
  SPEAKER_02: And yes, there are plenty of use cases coming up where the law department is implementing AI to try and speed up the reglining process or the contract review activities.
• 16:10
  SPEAKER_02: We've got procurement teams looking to try and accelerate the production of templates, etc.
• 16:17
  SPEAKER_02: We've got finance probably also poking around in some way.
• 16:21
  SPEAKER_02: We know we've got sales units that are saying, oh, I think we could improve performance oversight.
• 16:29
  SPEAKER_02: All of these are fragmented activities associated with embedding what is a broken contracting life cycle.
• 16:38
  SPEAKER_02: Individual silos, as you rightly say, saying, Oh, I could probably improve my efficiency.
• 16:47
  SPEAKER_02: Does it have an impact on anybody else?
• 16:49
  SPEAKER_02: I don't know, not my problem.
• 16:52
  SPEAKER_02: And what we're calling for with all of this is a wake-up call to the CFO that says you are not going to get a good ROI.
• 17:00
  SPEAKER_02: What you're seeing is indeed, in most cases, and our data reaffirms this, in most cases, you're seeing an uplift in efficiency from a cycle time perspective, not leading to any resource reduction, not actually, in most cases, even leading to shorter overall cycle times.
• 17:23
  SPEAKER_02: Am I redlining faster?
• 17:25
  SPEAKER_02: Yeah.
• 17:26
  SPEAKER_02: Is my counterparty redlining faster?
• 17:29
  SPEAKER_02: Yep.
• 17:30
  SPEAKER_02: Does Copilot have an intelligent conversation with the counterparty's co-pilot?
• 17:35
  SPEAKER_02: No.
• 17:36
  SPEAKER_02: You're just moving the place where tension occurs.
• 17:40
  SPEAKER_02: We're not seeing meaningful upgrades coming from these AI deployments in current contract management because it's just reflecting the traditional silo.
• 17:53
  SPEAKER_02: The opportunity here is for holistic life cycle thinking and for a true AI strategy to be deployed across that life cycle.
• 18:04
  SPEAKER_00: Yeah.
• 18:05
  SPEAKER_00: Um thank you, Tim.
• 18:08
  SPEAKER_00: Matt, are are we just moving the place where tension occurs?
• 18:12
  SPEAKER_00: Does does that really resonate with you?
• 18:14
  SPEAKER_00: What are you seeing in the field with all the deployment of AI?
• 18:21
  SPEAKER_01: So AI is absolutely making those silos faster and more efficient, which is great.
• 18:29
  SPEAKER_01: Legal can get their contracts redlined and reviewed faster, procurement can process third-party agreements or vendor rankings and other, you know, supplier uh details process faster, sales can get their quotes approved faster.
• 18:43
  SPEAKER_01: But at the same time, um, I think you coined the word integrationist.
• 18:49
  SPEAKER_01: Uh, it is it is making the overall organization and the integrated um commercial platform much slower.
• 18:58
  SPEAKER_01: Why?
• 18:59
  SPEAKER_01: Because is your AI talking to my AI?
• 19:02
  SPEAKER_01: Very likely not.
• 19:03
  SPEAKER_01: I think organizations in the last two, three years have been jumping at which AI solution can help me, because my visibility and my day job is like, I just got to get this done now, right?
• 19:14
  SPEAKER_01: Very few people are thinking bigger and uh holistically as a company, and not their fault.
• 19:20
  SPEAKER_01: It depends on your title and your role.
• 19:22
  SPEAKER_01: But at the C-suite level, you've got to start thinking uh, you know, if I bought five different AI solutions for five different departments, are they talking to each other?
• 19:32
  SPEAKER_01: Um, times are changing with agents now and all of these integrations using MCP, uh, these tools can talk to each other.
• 19:41
  SPEAKER_01: But at the same time, is finance being considered in the mix?
• 19:45
  SPEAKER_01: Oftentimes, how often do we see RFPs and requests for solutions go out for procurement or legal or sales?
• 19:53
  SPEAKER_01: And how many times is finance actually issuing an RFP to buy something?
• 19:57
  SPEAKER_01: They're usually not the one focused on buying a solution and spending money on technology because they're aggregating data that they get from different systems and putting it together for the purposes of CFO.
• 20:10
  SPEAKER_01: But again, if if CFO is involved in the mix and you can actually create an AI investment across uh all these departments, then not only will each department benefit, but CFO will highly benefit uh and looking at this entire thing as a whole rather than individual uh department silos.
• 20:31
  SPEAKER_02: And if I may hit quickly there, you know, I think a really important point that you're raising there, Matt, about the integration, but you made the also fundamental point.
• 20:44
  SPEAKER_02: Contracts are different from other enterprise artifacts because they not only need to integrate internally, but they need to integrate you with your market.
• 20:56
  SPEAKER_02: Whether that's your supply market or your customer market.
• 21:00
  SPEAKER_02: Contract cross boundaries.
• 21:03
  SPEAKER_02: And if you aren't thinking about that and planning for it, then you are of course making your world more difficult and you're making yourself more difficult to do business with.
• 21:16
  SPEAKER_01: Yeah, a hundred percent.
• 21:17
  SPEAKER_01: And you know, I'll I'll reflect on one more thing based on that, Tim.
• 21:21
  SPEAKER_01: If if we think about it this way, if we empowered the Office of CFO and the finance organization as a whole to be able to take the data buried in these uh commercial agreements and the contract families, as you said, the supply chain to your customer, how it's impacted.
• 21:40
  SPEAKER_01: And if they have visibility to detect, okay, we have a global event, oil prices, tariff, whatever's next in our life right now.
• 21:48
  SPEAKER_01: Uh, and so here's what we should do to avoid issues.
• 21:52
  SPEAKER_01: Go ahead, procurement.
• 21:53
  SPEAKER_01: Here's a bunch of supplier contracts that I found that have this provision.
• 21:56
  SPEAKER_01: Why don't you start negotiating and aligning on the terms?
• 22:00
  SPEAKER_01: Terms now rather than reactive approach because now procurement can get ahead of it rather than later on when there's a problem.
• 22:07
  SPEAKER_01: Now they are buried in more paperwork to deal with that problem later.
• 22:10
  SPEAKER_01: So it does help each silo as well, in the end.
• 22:14
  SPEAKER_01: They just don't see it until much later.
• 22:18
  SPEAKER_02: Yeah.
• 22:21
  SPEAKER_00: So wonderful.
• 22:22
  SPEAKER_00: Matt, I uh, Tim, I want to move from diagnosis to solutions now.
• 22:28
  SPEAKER_00: Um, something that you, Tim, talk about a lot, and a lot of our research has been covering this year is um a commercial intelligence office, and that's exactly what's proposed in this article.
• 22:41
  SPEAKER_00: Um, a cross-functional custodian of commercial data rather than another, just another control function, right?
• 22:49
  SPEAKER_00: So, does that model reflect what organizations actually need, Tim?
• 22:55
  SPEAKER_02: Well, let me be very clear about what this is not, because there will be many listeners who will be saying, yeah, that that's fantasy land.
• 23:07
  SPEAKER_02: Um, this is not an attempt to a political takeover.
• 23:12
  SPEAKER_02: This is not saying commercial, contract management, procurement, legal should be given this power and authority of decision making.
• 23:22
  SPEAKER_02: That's where this stuff falls down.
• 23:25
  SPEAKER_02: That's why contract lifecycle management has so often struggled and failed, because it needs cross-functional consensus.
• 23:34
  SPEAKER_02: And if one function tries to position itself as the owner, all the others step back and say, Well, I'm not sure.
• 23:42
  SPEAKER_02: I don't know that I trust you with my data.
• 23:45
  SPEAKER_02: This is not about politics, this is about business enablement.
• 23:50
  SPEAKER_02: The commercial intelligence office is not a decision-making authority, it's a concept that aggregates the data and has responsibility for the oversight of the quality of data.
• 24:04
  SPEAKER_02: That data is then made accessible in exactly the way that Matt was just talking about.
• 24:10
  SPEAKER_02: That procurement is empowered by it, legal is empowered by it, a program manager in charge of a major project is empowered by it.
• 24:20
  SPEAKER_02: It is supporting good decision making through on-demand intelligence.
• 24:27
  SPEAKER_02: That is the prize that is actually within our grasp.
• 24:33
  SPEAKER_02: It won't happen if a single function tries to do it, because all the other functions will resist.
• 24:41
  SPEAKER_02: And the only logical person to push this forward, because they're actually the biggest beneficiary, is finance.
• 24:49
  SPEAKER_02: I mean, the alternative is the CHEO.
• 24:53
  SPEAKER_02: Because time after time, what we see with contract is actually the only point of ownership today of the contracting life cycle is the CEO.
• 25:04
  SPEAKER_02: When I made re-engineering of the contracting process at IEM, it was sponsored by, yes, the CEO.
• 25:12
  SPEAKER_02: Because nobody else actually had that decision-making authority to say this is an enterprise deployment.
• 25:20
  SPEAKER_02: The CFO can do that on behalf of the CEO.
• 25:24
  SPEAKER_02: And they should do it because of the financial reward that comes from it.
• 25:30
  SPEAKER_00: Yeah, tremendous, tremendous prize, as you say, is within our grasp, Tim.
• 25:35
  SPEAKER_00: Matt, what are your thoughts on that point?
• 25:38
  SPEAKER_01: So uh not to repeat everything, but essentially, yes, it's um as long as the CIO, which uh historically has been the chief information officer, now it's the commercial intelligence office overseeing all of this.
• 25:54
  SPEAKER_01: As long as they are the integrationist and not creating another governance body and control function where people will feel like, oh my God, now I have to go through this one more step of someone overseeing.
• 26:07
  SPEAKER_01: Um their goal is not to review the terms and approve things, it's more to make sure that you're sharing data and it's benefiting that overall goal of the entire organization having visibility into the commercial contractual terms.
• 26:22
  SPEAKER_01: Um, is it's going to assemble and reconcile all the data between all the applications, the sources, and sharing it with the personas that need it most, most importantly, proactively rather than reactively.
• 26:34
  SPEAKER_01: Um, it's not an approval channel, it's not an executive committee that needs to review everything.
• 26:40
  SPEAKER_01: Um it's just another phase gate or a checkpoint for that uh that contracting flow.
• 26:48
  SPEAKER_01: And CFO, I think, can be the sponsor or at least a major stakeholder of that office because, again, as I started this conversation, we're here to make money, save money, spend money, and that's all about the finance office.
• 27:02
  SPEAKER_00: Yeah, indeed.
• 27:03
  SPEAKER_02: In many ways, Matt, I guess, you know, the challenge here is obviously the assembly of the data.
• 27:11
  SPEAKER_02: It is getting that start point of the commercial intelligence aggregated, integrated.
• 27:18
  SPEAKER_02: Once it's done, then of course, and once it's operating smoothly, it really becomes a self-operating office.
• 27:26
  SPEAKER_02: I mean, it is almost the machine.
• 27:30
  SPEAKER_02: Um it's not about, as you said, it's not about setting up a new high-cost, highly populated function.
• 27:39
  SPEAKER_02: It's about the aggregation and quality of the data that is then made accessible to decision makers.
• 27:50
  SPEAKER_00: So we've kind of come to the end of our time, and I want to finish up with a um a final question to perhaps make this more practical to our listeners.
• 28:02
  SPEAKER_00: So, Matt, I'm gonna come to you with this last question first.
• 28:06
  SPEAKER_00: If you if you were advising a CFO who obviously recognized the problem, but had very little appetite for another major transformation program, where would you start?
• 28:20
  SPEAKER_01: So, first thing I would do is say this is not another major transformation process or program because that scares people.
• 28:29
  SPEAKER_01: Um, and and and highlight that this is a custodianship move.
• 28:35
  SPEAKER_01: Um, it is part of your current programs, whatever they might be, because then this is Mark, okay, one more step I need to add.
• 28:42
  SPEAKER_01: I missed something important.
• 28:44
  SPEAKER_01: I should review this.
• 28:45
  SPEAKER_01: And they will be more open to incorporating this into the process rather than yet another project.
• 28:51
  SPEAKER_01: And as soon as we say there's another program, they think, oh, resourcing, money, time, who's gonna invest in this?
• 28:57
  SPEAKER_01: So that's the first thing.
• 28:59
  SPEAKER_01: Um, it's owning the aggregate as an asset uh across departments, across solutions, across all the data that's being shared.
• 29:08
  SPEAKER_01: Doesn't need much staffing because this is all about necessary integrations and moving the data to the right solutions uh for sharing it with the office of the CSO, CFO.
• 29:22
  SPEAKER_01: Um, and and mandating that every system, every AI investment integrates the commercial data into a common area rather than treating it as a silo.
• 29:33
  SPEAKER_01: If it's not, then no approval.
• 29:35
  SPEAKER_01: Um and and in you know, personally speaking, whenever we work on our own solution that we provide to our customers for contract management, I always think about the end.
• 29:46
  SPEAKER_01: Whenever a new feature is designed, what's going to happen in the end to that feature?
• 29:50
  SPEAKER_01: And start from the bottom up, right?
• 29:52
  SPEAKER_01: On the work backwards, because the end result is all that matters.
• 29:58
  SPEAKER_00: Wonderful.
• 29:58
  SPEAKER_00: Thank you, Matt.
• 29:59
  SPEAKER_00: And Tim, what what are your final thoughts?
• 30:02
  SPEAKER_00: What uh what advice would you give?
• 30:06
  SPEAKER_02: Yeah, I completely agree with Matt.
• 30:09
  SPEAKER_02: Um, it's not a transformation program.
• 30:12
  SPEAKER_02: It is transformational, but not in that sense of that massive complexity that often goes with it.
• 30:21
  SPEAKER_02: Probably the biggest challenge here, Matt, is the quality of data.
• 30:26
  SPEAKER_02: The biggest activity is data cleansing, because unfortunately, the quality of data is indicative of exactly the problem we've been talking about, that it's been left to be fragmented.
• 30:42
  SPEAKER_02: It has depended upon entry by people who don't really understand why a lot of the data is even significant, and because the data wasn't put to active use, they were right, really, not to care all that much.
• 30:57
  SPEAKER_02: I mean, I remember speaking with one of our member companies that was sort of shocked.
• 31:02
  SPEAKER_02: They were trying to do some segmentation around the different contract types they have, and they were shocked, as a company that was not in the aviation industry, that actually the most common contract they had in their portfolio was aviation contracts.
• 31:22
  SPEAKER_02: Hmm, it was top of the list.
• 31:25
  SPEAKER_02: So people couldn't be bothered to segment it properly because they couldn't see the point.
• 31:32
  SPEAKER_02: That has given organizations a challenge they have to address in order to get to this.
• 31:39
  SPEAKER_02: They do need quality data, but if they never start, they'll never have it.
• 31:44
  SPEAKER_02: And I think one of my big frustrations with contracting technology has been that even when people did start to make an investment, they didn't bring discipline to the data quality management.
• 32:00
  SPEAKER_02: It's never too late to start, but certainly the cost of not starting continues to grow.
• 32:09
  SPEAKER_02: Markets are becoming more volatile, not less.
• 32:13
  SPEAKER_02: The complexity of our operations, more complex, not less.
• 32:18
  SPEAKER_02: This is an urgent reform, and we absolutely will be building that case over our next few programs.
• 32:29
  SPEAKER_00: We certainly will, Tim.
• 32:31
  SPEAKER_00: I think that's a great place to leave it because we've got so much more to say in the episodes that are coming up.
• 32:38
  SPEAKER_00: But um, what today's conversation has highlighted is that better forecasting starts with better visibility into the commercial reality of the business.
• 32:47
  SPEAKER_00: Bringing that intelligence together and making it trusted and usable could be one of the most critical transformational steps CFOs can take to see risk and opportunity earlier.
• 32:59
  SPEAKER_00: So if you liked what you heard today, stay tuned for the next episode, The Margin Problem Facing CFOs and the Commercial Solution.
• 33:08
  SPEAKER_00: Um, I want to thank my guest today, Matt Patel.
• 33:12
  SPEAKER_00: Thank you for joining us.
• 33:13
  SPEAKER_01: My pleasure.
• 33:14
  SPEAKER_01: Thank you for having me.
• 33:15
  SPEAKER_00: And of course, our very own Tim Cummins.
• 33:17
  SPEAKER_00: Thank you, Tim.
• 33:19
  SPEAKER_02: And of course, if you like what you've heard already and you don't feel a need for the next three, just give Matt a call.
• 33:28
  SPEAKER_01: Exactly.
• 33:29
  SPEAKER_00: Exactly that.
• 33:30
  SPEAKER_00: Well, thank you.
• 33:31
  SPEAKER_00: Thanks to our audience, and uh, I look forward to the next Leading Edge episode.