First-Of-Its-Kind Study from Contract Management Software Leader Reveals Daunting Challenge Companies Face from Uncertain Brexit Timeline
Icertis, the leading provider of enterprise contract management in the cloud, revealed the results of a study that assessed the exposure of companies to Brexit-related contract risk. The analysis uncovered that, for enterprises with operations spanning the European Union, more than 10 percent of their contracts may be impacted by regulatory, freedom of movement, tariff, customs and other jurisdictional issues created by Brexit. With the average Global 2000 corporation having tens of thousands of active contracts in the EU, the number of affected agreements could be massive, and the effort to amend them significant.
The analysis, which was conducted using advanced machine learning tools on a sample of the 6.5 million contracts managed on the Icertis Contract Management (ICM) platform, suggests that immediate action is needed for organizations to address the impact Brexit will have on their contractual obligations. However, without a clear Brexit deal in place, and with a looming October 31 deadline, legal and commercial departments at global companies are currently in limbo: they cannot fully assess the potential risk to trading relationships hidden in their contract portfolio until policy and regulatory changes are finalized.
Companies that lack the ability to quickly assess the impact of Brexit-related changes to their contracts – or cannot rapidly revise agreements once Brexit details are confirmed – risk non-performance penalties, missed obligations, compliance fines and commercial disruption. Conversely, companies that have invested in and deployed contract management software that gives enterprise-wide visibility into all agreements and their commercial details will have the strategic agility to manage Brexit’s impact, regardless of its final form.
“Based on our analysis of Brexit’s implications, companies that haven’t digitized their contracts risk major impact on corporate legal teams and commercial activity through the end of 2020 if not longer,” explains Bernadette Bulacan, Lead Evangelist at Icertis. “And Brexit will not be the last regulatory or policy change that companies face. It is a clarion call for reimagining contract management with the right technology platform that turns static documents into strategic assets using advanced technology like artificial intelligence and machine learning. At Icertis, we are proud to work closely with global companies that are answering this call to digitally transform their commercial foundation and increase their strategic and operational agility.”
In 2018, Thomson Reuters Regulatory Intelligence captured more than 57,000 regulatory changes and updates from over 900 regulatory bodies worldwide – an average of 220 per day. The quickening pace of regulatory change worldwide has driven adoption of Icertis’ AI-infused ICM platform globally and in the last 12 months alone Icertis has been selected by leading companies including Airbus, Bertelsmann, Daimler, DenizBank, Flight Centre Travel Group, Lantmännen, Norfolk Southern and Treasury Wines.