Earlier this year, we initiated the first of our planned 20 for 2020 series’ as an echo to the 10 for 2010 series that we used to launch this site. That first 2020 series focused on the key themes and ideas that Chief Procurement Officers should have on their agenda this decade. This second series focuses on “Key Providers in the 2020s” which you can think of as (borrowing from Supply and Demand Chain Executive and countless others), the 20 “Solution Providers to Know” this decade. Today we focus on SirionLabs.
Key Provider in the 2020s – SirionLabs
Founded in 2012, SirionLabs (“Sirion”) is a provider of cloud-based, contract management solutions that is headquartered in Seattle, WA and has 500+ employees located in offices around the world. Today, the company is not a very well-known solution provider in the procurement space. That, however, is about to change as the company sits at the intersection of Big Data and Contract Management and offers some highly unique capabilities that can drive procurement value, particularly with services spend. Its recent announcement (see our coverage here) that it had received $44 million in Series C funding, bringing its total capital raised to $66 million will also help in this regard. But, Sirion is far from a newcomer to the space and now boasts more than 200 customers who manage more than 3.5 million contracts across 100 countries. While Sirion offers traditional contract repository and authoring functionality, it is the company’s capabilities in and emphasis on “post-signature” contract and supplier management and its AI-based approach to analytics that combined create exciting differentiators in the contract management market.
Beyond Contract Digitization
There is no doubt that digitizing a business’ procurement contracts and gaining a broad view into its current supplier contracts and associated obligations can drive huge value by enabling greater contract compliance and plugging savings leakage. Nevertheless, Ardent Partners’ research shows that contract repositories (48% adoption) and contract authoring (28% adoption) solutions are in place at less than half of all procurement departments. There are multiple reasons for this, but one main one is the fact that while digitized ‘header-level’ information aggregated in a single location is helpful, the line-item price audits and other compliance efforts that drive great value remain a mostly manual effort. Sirion’s offering streamlines and automates this issue in an advanced and powerful way.
Sirion’s solution starts with robust (but, standard) “smart” contract authoring capabilities with contract templates, clause libraries, and dynamic workflows as well as a repository that features automated metadata extraction and change logs. Sirion’s use of AI in authoring relates to system-recommended templates and clauses and in scoring a baseline contract risk grade. Where Sirion quickly moves beyond basic contract management is with its extraction and analytics capabilities which are deeper and more extensive than many other contract solutions in the market.
These capabilities draw out more than basic header-level info (and the operational/process info that tracks how contracts are managed) and can capture specific contract obligations, complex pricing schedules, payment terms, associated SLAs and performance guarantees. They can also extract data from electronic files (like PDFs and Word docs) and electronic images (like JPGs and PNGs). Out-of-the-box, the system supports roughly 60 data fields and the ability to identify 85 types of clauses for digitization and categorization. Sirion says that the number of fields it offers out-of-the-box is less important because its system’s deep-learning capabilities can enable the system to accommodate (or extend to) 80,000 additional data fields and/or clauses within a month of use. It is these powerful, underlying capabilities that enable its performance management and invoice auditing offerings.
A key driver behind Sirion’s extraction capabilities, specifically, and its contract management capabilities, in general, is the system’s ability to take large amounts of unstructured contract data and extract and parse it so that it becomes usable structured data (obligations, performance SLAs, and pricing) that can support better supplier management (or governance) and invoicing. By capturing and centralizing key contract details and organizing them in a way to guide contract and compliance management, the system helps procurement and other stakeholders track and manage key supplier obligations and their performance to ensure that supplier invoicing matches what was contracted.
Sirion’s leadership makes the point that these capabilities are valuable for contracts of all categories, but they are especially critical with services contracts, which are often managed by different business stakeholders in a decentralized and non-standard way. Sirion’s SOW and contingent workforce management capabilities support strong program/project compliance and overall tracking which enables clear invoice reconciliation and validation. By capturing contractual pricing terms, tracking supplier delivery and performance, and incorporating any additional data (like price indices and quality levels), the system is able to calculate what the value of a supplier invoice should be and provides a platform for suppliers and AP (or the buying organization) to collaborate and resolve any potential discrepancies or disputes when the actual invoice does not match Sirion’s value. Sirion’s executives say that their clients typically save between 6% -12% of the overall contract value by plugging savings leakage and that they find an additional 4% – 8% of extra business value too. These are values that are over and above the efficiencies gained from contract automation.
Sirion’s comprehensive AI and data-driven contract management solution is taking a novel approach to a classic process and could serve as the industry catalyst to get more procurement teams to adopt (and use) a comprehensive contract management solution. And, with its new round of funding, the company is ramping up to pursue a target market (procurement) that will be highly focused on maximizing savings. SirionLabs is one of Ardent Partners’ Key Providers in 2020s.
RELATED RESEARCH
Ardent’s NEW State of ePayables 2020 Report is Available Now
20 for 2020: Key Providers in 2020s – Corcentric
Technology Round-Up – May 22, 2020
