Don’t Drop the Ball After Signing: Why Contract Activation Matters

You’ve just acquired a critical data set that means, for you—the data buyer, trader, or portfolio manager—the real work starts now. Whether you’ve secured the data at a great price through tough negotiations or paid top dollar, it’s essential that this investment begins delivering value immediately. That’s where Contract Performance Management (CPM) comes in.

Think of CPM as your essential toolkit for ensuring data sets are efficiently integrated, managed, and fully optimized for performance. Traditional Contract Lifecycle Management (CLM) may have helped you negotiate the deal, but CPM is all about getting the most out of the post-signature process, making sure every penny you spend translates into actionable insights.

Every organization must implement seven key phases to build an effective CPM strategy. These phases work together to ensure your contracts don’t just sit idle but deliver the performance they were designed to achieve.

The Seven Key Phase of Contract Performance Management

1. Activation: Setting your contracts up for success.

2. Active Management: Monitoring performance closely.

3. Reporting: Turning numbers into actionable insights.

4. Change Management: Adapting to new circumstances.

5. Renewal: Evaluating contracts before they expire.

6. Termination: Exiting contracts gracefully.

7. Archival: Preserving and managing contract history.

Today, we’re focusing on the crucial first step: Activation. Nail this, and the rest of the contract lifecycle becomes far easier to manage.

Activation: The Make-or-Break Moment

In the world of data procurement, activation is where everything begins. It’s about taking a newly signed contract and ensuring all the data and obligations are correctly recorded, roles are assigned, and systems are ready to deliver value. Here’s what it involves:

• Smart Data Capture: Use AI tools to accurately pull key details from your contracts.

• Centralized, Secure Storage: Keep contracts in one accessible place, safe yet easy to retrieve for those who need them.

• Role Assignment: Ensure that all team members understand their responsibilities and deadlines.

Activation sets the stage for contract performance management.  It’s one of the most critical steps to ensure your agreements deliver on their promises, helping your firm avoid missed deadlines, compliance concerns, or money left on the table. 

Real-World Contract Chaos: The IBOR Transition

Need a real-world example of why activation matters? Look no further than the IBOR (Interbank Offered Rate) transition. When the global financial industry shifted away from IBOR, including the widely used LIBOR benchmark, financial institutions faced the immense challenge of identifying and updating thousands of contracts. Many of these contracts lacked clear fallback provisions—clauses that specify an alternative benchmark if LIBOR became unavailable. Without these, firms faced uncertainty over calculating payments, leading to potential defaults and costly legal battles.

According to the Minnesota Law Review, LIBOR underpinned an estimated $350 trillion in financial contracts globally. Institutions with strong contract activation processes quickly amended relevant agreements, ensuring compliance and avoiding penalties. However, those relying on outdated systems scrambled, risking non-compliance and financial repercussions. This event underscores the necessity of effective contract performance management, especially during large-scale regulatory changes​.

Activation Done Right: Work Smarter, Not Harder

Ready to take control of the activation process? Here’s how to ensure your contracts perform from day one:

1. Leverage Smart Technology: Modern contract platforms can extract key details faster and more accurately than manual methods.

2. Create a Secure, Centralized Repository: Avoid the frustration of hunting down contracts across disparate systems.

3. Assign Clear Ownership: Ensure that everyone involved knows their role, with automated reminders to keep things on track.

The Payoff: Why Nailing Activation Matters

Spend a little extra time on activation, and you’ll reap the rewards:

• Dodge the Compliance Bullet: Stay on top of obligations before they become problems.

• Sleep Better at Night: Less risk of costly mistakes or missed opportunities.

• Work Smarter: Less time playing document detective, more time on strategy.

• Negotiate Like a Boss: Armed with easy-to-access data, you’ll have the upper hand in future talks.

• Be Everyone’s Favorite Partner: Smooth contract management makes your firm ajoy to work with.

The Future of Contract Management is Performance

As contracts grow more complex, especially in data-driven industries, the need for efficient Contract Performance Management (CPM) has become paramount. Unlike traditional lifecycle management, CPM focuses on ensuring that contracts actively deliver value post-signature. 

In data contracts, where use-case-based licensing governs specific workflows, locations, or teams, AI-powered CPM tools can streamline activation, monitor performance, and adapt to changes. This shift from managing contracts to optimizing their performance empowers firms to navigate future contractual complexities with precision and confidence.

Time to Take Action

It’s time to elevate your contract management processes. Start by reviewing your current activation procedures—where are the bottlenecks? Need more insights? Download our comprehensive whitepaper on Contract Performance Management for tips on optimizing your entire contract lifecycle.

Remember, getting the signature is just the beginning. With a well-executed activation process, you’ll ensure your data investments perform at their peak from day one.