My 2020 survey asked more than 50 respondents across the globe and different sectors to consider various issues on digital-first contracting.
From my studies on the legal technology and innovation certificate, I was aware that data should drive techno-contracting. Algorithms depend on and use historical information in the form of data to carry out specific processes such as creating, reviewing or executing contracts.
Access to data
When it comes to contracting, often we don’t have the right data to assist. My survey only asked whether businesses had access to data that gave insights on performance, such as via digital tools to record, monitor or evaluate performance.
One quarter proactively used data, one third reactively used data ie if there has been an issue, and nearly one third did not actively record data. But how we can create a more effective tool if we don’t know what isn’t currently working?
Data and trust
Given perennial concerns about hacking, leaks, data transparency etc, I asked to what extent the respondents trusted others to use any performance data they collected for the purposes of a single contract.
Less than 15% had clear terms in their contracts to show how data can be recorded, monitored and evaluated. One third trusted their business partners but had no idea how they would use it or had any controls. One quarter had never even considered it.
Over one quarter did not trust corporates to use data sensibly.
If data is so valuable that social media platforms use it instead of currency, why don’t businesses record, monitor and evaluate data about contracting?
Structured data could make it easier to:
- evaluate tenders eg against average out-turn costs from a specific company
- improve process efficiency eg ensuring the contract reflects actual payment turnaround dates
- simplify contracts by deleting irrelevant matters and redrafting one-sided clauses
- build trust
- redesign buildings to avoid issues that frequently arise in construction or use
- reduce insurance costs.
What should you do?
Work out what data would benefit you – don’t collect it for the sake of it; collect it for a strategic purpose.
Ensure your contracts are clear how data can be recorded, monitored and evaluated by all project team members.
Use data proactively.