Diligent recently commissioned global research and advisory company Forrester to develop a Total Economic Impact (TEI) study analyzing its Diligent Entities solution. For over two decades, Forrester has developed TEI reports, which help business technology consumers develop analyses for their internal technology decisions and let technology organizations provide an objective showcase for their solutions’ financial impact. TEI reports are developed based on due diligence, independent customer reviews, and primary research. Behind every TEI study is a proven industry framework.
About Diligent Entities
Whether their subsidiaries number in the single digits or the thousands, businesses face a herculean task managing any number of regulatory filings, changing regulations, and potential risks. Entity management tools, such as Diligent Entities, can significantly streamline this work for leadership teams and other stakeholders — saving time and money while driving business decisions backed by secure and trusted data.
Diligent Entities centralizes entity and subsidiary data into a corporate record, preserves data integrity, and lets organizations access their information anytime and anywhere. This helps organizations ensure legal compliance and anticipate the potential risks related to the entities and subsidiaries they operate worldwide.
What are the benefits, costs, and risks associated with investing in entity management? Read on for highlights and key takeaways from the Diligent Entities TEI Report.
Background and Business Challenge
The Forrester TEI study provides much-needed context. Entity management has been evolving at breakneck speed as interconnected business activities become increasingly complex, challenged by external uncertainties and changing regulatory requirements. The role has evolved beyond compliance into overall risk management and strategy, including growth and innovation. It’s a formidable task to manage it all across hundreds or thousands of entities and subsidiaries.
At the same time, much of entity management still happens through traditional activities: spreadsheets, self-managed platforms and outsourcing — none of which are ideal tactics as an organization and the entity it’s tracking grows. Team members often don’t know where specific information is located, work requests back up, and the threat of costly mistakes looms large. Meanwhile, these highly manual processes take more and more time away from busy entity management teams.
“The amount of work involved in answering every tiny little question [around the entity] every time something has to be signed is incredibly time consuming.”
Entity manager in the energy sector interviewed for the TEI report & Board Member
A Hypothetical Global Multinational Puts Diligent Entities to the Test
To put together this TEI report, Forrester interviewed representatives across industries that have experience using Diligent Entities, then aggregated interviewees’ experiences into a hypothetical composite organization. In short, picture a $1 billion global company managing 1,000 employees and 200 entities. The composite company is grappling with a vast range of entity management challenges and evaluating Diligent Entities’ ability to solve them.
The interviewees’ wish list for an entity management solution was sizable. They needed:
A single source of truth to ensure data accuracy and data security
Configurations to meet their organization’s exact needs
A hosted solution that was low maintenance and easy to learn, especially for generating reports
The Quantified Benefits
Interviewees noted the cost savings from identifying dormant legal entities and retiring applicable legacy environments. But the biggest saving was time. More streamlined operations, especially for seeking entity-related information, saved significant hours and allowed resources to be reallocated towards more strategic, higher value work.
Over three years, the 200 entities realized savings of $315,000 from spending less time on managing and maintaining data — thanks to the automation and standardization of tasks like collecting entity and subsidiary data and updating them when circumstances change. When preparing reports for investors and stakeholders, using Diligent Entities saved more than $119,000.
“Without Diligent Entities, we spent 10-15 hours each month and each quarter for reporting. Now with Diligent Entities, I estimate we are 50-75% faster once the information is properly populated and we figure out which attributes need to be reported on.”
A legal manager in private equity interviewed for the TEI report
Moreover, Diligent Entities’ easy-to-use platform gave business units and internal stakeholders from across the organization the ability to access information on their own — a big benefit when it comes to the many entity-related requests fielded by a legal entity management team. These time savings are worth more than $100,000 over three years.
In short, Diligent Entities delivers clear investment value. An analysis of the three-year, risk-adjusted present value of quantified benefits for the composite organization revealed benefits of $934,000 versus costs of $295,000, adding up to a net present value (NPV) of $639,000 and an ROI of 318%.
|Time Is Money|
For busy entity management teams, much of Diligent's 318% ROI comes from:
An entity manager interviewee working in the energy sector shared that: “[One of the best things about Diligent Entities] is that it is hosted. I don’t have to worry about the system being up and running. Everything is taken care of for you. They help us upload the information if needed. I did not have to gather data from a gazillion companies and put them all in myself, index them, upload all the charter documents, upload all the information. I can pay somebody to do it who has the knowledge and experience in doing it.”
The Unquantified Benefits
Interviewees also cited Diligent Entities’ potential to help organizations reduce risk, with ripple effects involving brand value and topline growth. Other possible benefits included increased credibility and strengthened decision-making.
In entity management, reporting mistakes are costly and result in financial penalties, damage to brand value, and lost revenue. Users of Diligent Entities are less likely to mistakenly report entity and subsidiary information than when using siloed spreadsheets and manual processes. Moreover, by helping entity management teams standardize their processes and consolidate them into a unified platform, Diligent Entities helps build credibility with other departments.
“Before Diligent, we would send out hundreds of emails to people to check the data. Many would not respond. We’d then send hundreds of reminders. All that is automated today with Diligent Entities.”
Head of legal entity management in the insurance sector interviewed for the TEI report
Finally, Diligent Entities puts everyone on the same page. Interviewees noted that now people know where to look when they need entity-related information, and they can draw from a single source of truth they know to be up to date. This builds confidence and leads to better strategic decisions.
Additionally, the purchase of Diligent Entities provides a gateway into greater overall governance, risk, and compliance (GRC) capabilities. This enables seamless scalability into other GRC tools and resources and creates a connection to leading GRC experts in the field.
Learn more by downloading the full Diligent Entities Forrester TEI Report.