As we’ve explored extensively, the benefits of good, accurate entity data shared throughout the business compound. It can reduce an organization’s tax burden, simplify its corporate structure, speed up sales, open the door to M&A, and more. But how exactly does that data get there?
Today legal teams represent just 0.03% of company headcount (median) and are busier than ever. That doesn’t leave time for much data entry. And so, to create and maintain data, they need help from every other business unit, which means convincing others to be good team players. This of course is easier said than done.
Communicating the Need for Clean Data
It is estimated that $140 billion is lost each year due to disconnected data, reports the data firm SnapLogic. That’s time spent engaged in redundant work that’s already been completed, looking up data that’s out of date, verifying the data, and waiting on others to provide it. According to the data automation startup Syncari, the cost to the average business can be 15-20% of revenue. Yet there is little urgency to do much about it.
Few teams talk about their issues as “data issues” so it’s difficult to see them all as connected. Sales teams talk about long sales cycles, marketing teams about rising costs, and operations teams about capital investment, but never about “entity data,” though by virtue of the entity data being accurate, part of their burden is lifted.
Better entity data can mean better-defined sales territories. It can also mean more agreeable customer agreements that require few redlines and lead to faster sales cycles. It can mean more budget freed up for marketing activities thanks to tax savings and more capital for investment. A legal department informed by more and better data coming from every business unit means a more effective business overall.
The challenge for today’s legal and business teams is earning each business unit’s attention in terms of what they’re interested in. And this is the part where many legal teams stumble. Legal must make a case, not in terms of what they should do, but why participating in generating and maintaining entity data is good for them.
That could be by sharing the potentialities above, and suggesting involving legal in revenue planning to do most-negotiated clause teardowns. It could mean having legal participate in marketing campaigns before they’re about to launch, and all organizations sending prompt and accurate information on clients, partners, directors, and signing authority.
Making Participation the Default
And then of course there is the matter of removing the barriers to each business unit’s participation. Salespeople’s unwillingness to enter information in the CRM is legendary, but it is also predictable. They are not compensated for data quality. They are paid on deals done, no matter the mess. People do what they are incentivized to do and follow paths of least resistance. That’s why on top of helping leads of other business units understand why participation is in their best interest, legal teams must make participation the default.
Entity management software has a role to play here. By automating routine tasks, and taking them out of users’ hands, legal teams can have better data and do less following up. For example:
- Using an app, boards and officers can log meeting minutes automatically
- The human resources system can alert legal when employees leave
- Triggers in the CRM can forewarn the legal team of the deal load coming at the end of month or quarter, and give salespeople an avenue for asking questions
- Entity data can be loaded into the CRM that informs sales teams of ISO certifications
- Entity data can be loaded into the marketing system to limit marketing to regions where the company can actually do business
- Triggers in the ERP can alert legal teams of upcoming risks
With entity management software, legal is in less of a position of asking and more of a position of telling. They needn’t wait on HR to send cumbersome spreadsheets to cross-reference which directors are still employed and which aren’t. They needn’t chide each entity’s board about submitting more substantive minutes, or submitting them on-time. Much of that is managed, and that makes it easier to communicate the benefits back to those teams.
Could Your Organization Be More Agile?
When modern entity management is played as the team sport it is meant to be, the entire business becomes more agile. It moves about easily in a world of increased regulatory and governance demands, and those benefits accrue to all. The challenge is communicating that message to business units not accustomed to being team players. But couched in terms of what they care about—sales, budget, capital, or time—everyone wins together.
Working with Diligent’s entity management software can help you collaborate more seamlessly, securely and create a culture of self-service. Get in touch and request a demo to see why Diligent Entities is the market leader in entity management solutions.