Share via

Use Icertis Contract Intelligence on Azure

  • Article

Contracts are the foundation of commerce, and world-class manufacturers realize the need for a comprehensive contracting platform that can scale and evolve to best manage both customer and supplier relationships. Icertis Contract Intelligence (ICI) for Manufacturers, powered by Microsoft Azure, provides organizations with a globally scalable Contract Lifecycle Management (CLM) platform to align the commercial intent and obligations captured in commercial agreements between manufacturing companies, their customers (sell-side contracting), and their material suppliers and contract manufacturing partners (buy-side contracting).

Current challenges

The manufacturing industry relies heavily on a calibrated demand-side and supply-side balance. Short-term production and inventory decisions must be made based on actual demand and movement of goods through the consumption channels. Meanwhile, product complexity continues to increase, and products are no longer complete at the point of sale but must be manufactured for continuous releases to deliver long-lasting value.

Contracts have historically not reflected the increased complexity of the manufacturing industry. Instead, contracts continue to be captured in static documents that are stored away and forgotten. All the hard work and months of effort that went into the negotiation of that contract can be lost when contract data can’t be surfaced in real time as business needs change. The change includes critical business information like pricing protections, delivery clauses, payment terms and early payment incentives, rebates, tiered discounts, quality service levels, and audit provisions. Poor visibility and control in this contract data creates leakage and risk in a business.

These challenges can compound over time, as acquisitions happen, or various divisions operate autonomously and different contracting systems and repositories silo contract data across the enterprise. Having multiple contracting systems amplifies inefficiencies. It’s common for a company to have one tool for each business unit (legal, procurement, sales, and other software for periphery teams like IT, facilities). Having contracts spread out over multiple systems creates significant risk for tracking and auditing obligations. It can also add cost to purchase, maintain, train, and support all these disparate tools.

Other common challenges manufacturing companies face with legacy contracting solutions include:

  • Missed commercial opportunities due to contract delays, related to slow time to author, redline, and execution of the contracts.
  • Rudimentary systems fail to model complex, industry-specific contracts, especially unique industry specific relationships such as complex design, engineering, and manufacturing.
  • Financial underperformance driven by missed contract value, related to missed payments, misaligned contractual commitments, or supplier invoices that don't match negotiated contractual pricing.
  • Enterprise and brand risk introduced by noncompliant business agreements, especially from rapidly changing regulatory and compliance requirements.
  • Critical resources consumed by manual compliance updates at a time when labor shortages require teams to be highly strategic with how they use their time.

Benefits of Icertis Contract intelligence on Azure

Today’s business environment demands a new approach to contracts.

  • For sell-side contracts (that is, sales contracts with customers or distributors) manufacturers need several critical drivers for contracting a new sale. These drivers include templates for authoring new sales agreements, fallback positions and alternatives when negotiating with clients, easy-to-use redlining and authoring tools like Microsoft Word, automated review workflows to expedite approvals, plus auditability and traceability for any changes or adjustments to the contract. In sum, they need a system that can manage the contracting processes end-to-end, from quote to sale.

  • For buy-side contracts (that is, contracts for the purchase of goods and services from suppliers and partners) procurement needs several critical features to help streamline the authoring and governance of their thousands of relationships. These drivers include contract playbooks for ensuring new purchase agreements are standardized, self-service capabilities for low-risk agreements such as nondisclosure (NDA), AI-powered negotiation playbooks, metadata tables attached to contracts to track parts pricing or labor rates, easy-to-use signature features, integrations into ERP systems, and advanced reporting and analytics to track the pricing requested in invoices is aligned to what is in the contracts.

Icertis and Microsoft work closely with customers and partners to ensure that manufacturers can drive strategic, financial, and operational benefits through contract intelligence via six value levers:

  1. Reduce revenue leakage – Transaction cost governance is aided by linking contractual obligations to orders, and acting on the purchase price, schedule, and order quantity variances (4-way). With Icertis Contract Intelligence, customers can link their contractual obligations to orders to rapidly identify purchase price, payment terms, manufacturing schedule, or order quantity variances. ICI also enables interoperability with their other systems of record.

  2. Increase supplier visibility – Managing commercial obligations requires the ability to track, assess, and act on all the commitments – inflation clauses, milestone data, penalty clauses, rebates, etc.—that you and your suppliers agreed to. With Icertis Contract Intelligence, customers can be confident that they’re understanding and acting on all the information – down to the table, clause, attribute data, and handwritten notes that live in their contracts.

  3. Improved risk mitigation and compliance – To stay compliant, manufacturers need visibility into how new regulation requirement affects supplier or customer contracts, and the ability to easily deploy amendments in a targeted manner to address those new requirements. With Icertis Contract Intelligence, customers can find and analyze contracts down to the word or table. Customers can also connect to other systems-of-record to eliminate the need for spreadsheets, increasing time to value and decreasing time to mitigation.

  4. Protect margins – Operating margin governance requires visibility into commodity indexes, inflation, and price locks, and where you can pass these costs along to customers. With Icertis Contract Intelligence, customers can get a more granular view of the data beyond the clause. This capability means holding customers and suppliers accountable for pricing, rebates, promotions, and more volume discounts that may have otherwise gone unmanaged.

  5. Managing flow-up and flow-down commitments – Confirming that all obligations and specification commitments with customers are reflected in supplier agreements that are related to the customer agreements - and vice versa - enables enterprise visibility, alerts of mismatches, and workflows for out-of-compliance scenarios. With Icertis Contract Intelligence, customers can be confident that flow down spans contracts on both the buy-side (for example, parts requirements to be met, allowance of defective PPM, quality specs, material grade) and sell-side (for example, creating an alert, notification of noncompliant scenario).

  6. Drive operational productivity and efficiencies – Improved contract processes reduce the time and effort to contract and onboard suppliers, both new and existing. With Icertis Contract Intelligence, customers can take all global supply chain requirements and move them into a centralized platform with flexible capabilities, meeting global language requirements for seamless integration with other systems.

Icertis Contract Intelligence built on Azure - Reference Architecture

Icertis Contract Intelligence (ICI) operates across a wide range of Microsoft Azure Services. The reference architecture provides an overview of common Icertis products, especially our latest generative AI capability, called the Icertis ExploreAI Service, integrated with the Microsoft Azure OpenAI service. Overall, Icertis uses over 50 Azure services to provide globally secure scalability, deep integration and capabilities for commonly used Microsoft tools, and world-class infrastructure and cloud services capabilities for customers.

Reference Architecture for Icertis Contract Intelligence.

Download a printable PDF of this reference architecture diagram.

A few highlights of how Icertis uses Azure services are:

Data sources

The ICI platform connects to adjacent enterprise systems that manage data relevant to contracting processes. This connection streamlines pre-execution workflows and also helps monitoring obligation compliance post-execution. ICI platform enables businesses to use best in class contract lifecycle capabilities as part of their strategic Procure to Pay or Lead to Cash processes. For example, integrations with supplier management systems allow supplier information to flow into the contracting process to streamline document creation, then flow back into the supplier system post-execution for full visibility into the supplier’s contractual obligations.

Data ingestion

The ICI platform features more than 200 APIs to integrate into other enterprise systems. ICI platform also utilizes several Azure solutions to facilitate interaction with external systems. For example, Azure Service Bus is utilized to notify external systems about events (for example, agreement document creation) and trigger appropriate event-based tasks (for example, send an email notification).

Icertis Contract Intelligence - Contract Lifecycle Management (CLM)

At the core of the solution is the ICI Contract Lifecycle Management (CLM), which helps you realize the full intent and value of every contract. The ICI platform manages all elements of the contract lifecycle, from contract initiation, through negotiations, to post-execution performance monitoring. In addition to these core contract lifecycle management processes, the ICI platform also features a large portfolio of applications and AI solutions that address unique use cases across business processes and verticals. This feature includes growing list of Copilots powered by the Icertis ExploreAI Service built on Azure OpenAI:

  • Interactive Insights Copilot enables you to engage directly with contracts and rapidly uncover insights via predefined, hierarchical prompts and free-form prompts that highlight key provisions and identify related contract information. For example, a sales leader can quickly surface the commercial details of a contract through simple, conversational queries. Alternatively, a procurement lead can find opportunities for savings by asking the system, in plain language, to surface rebate or purchasing information within a contract.
  • Risk Assessment Copilot automates high-volume contract reviews by comparing contract attributes against your specific risk criteria to ensure required clauses and approved language are present in every agreement. Risk Assessment Copilot earmarks agreements that don’t require further review and identifies and helps you address missing or noncompliant attributes, so you can focus on growing your business.

Management

The ICI platform uses multiple Azure solutions to provide greater control, security, and compliance measures for users. For example, the Icertis platform provides secure key management access and storage using Azure Key Vault.

Innovate

  • Productivity And Collaboration - With deep integrations into Microsoft 365, Microsoft Teams, and Microsoft Power BI, users can create, view, approve, and collaborate on contracts within the applications they use every day to accelerate contract flow and adoption. For example, integration with Outlook enables automated intake of emails and attachments to be seamlessly routed for review and approval. Similarly, with Icertis experience for Microsoft Word, users can work directly in Word to set up contract templates and draft and review agreements, with full access to the contract clause library. Users can further collaborate on contracts in real-time via the Microsoft Teams experience.
  • Planning and Management - Through ICI Experiences for Microsoft Dynamics 365, customers can use powerful features, such as creating contracts with a single click and managing contract authoring, workflow, milestones, and approvals without leaving the Dynamics application.

Artificial Intelligence

Icertis AI solutions, powered by Microsoft Azure AI and Microsoft Azure OpenAI services, enable enterprises to safely use the power of generative AI to bring a new level of efficiency to contracting that turbocharges your business. For example, Icertis ExploreAI Service, powered by Microsoft Azure OpenAI, enables business leaders and end users to safely use generative AI to surface risks and insights within their contracts using a series of persona-based prompts.

Storage

Icertis utilizes multiple Azure solutions to store and retrieve contract data. For example, ICI platform utilizes Azure Database services to provide a robust and scalable platform for storing and managing contracts while addressing security, compliance, and data protection requirements. This capability enables scaling and managing the rights and commitments across over 10 million+ contracts worth more than $1 trillion, in 40+ languages.

Next steps