Terzo Technologies: Contract Intelligence Complements ERP

Enterprise Resource Planning software (“ERP”) has been an integral part of most large enterprise IT environments during the past twenty years.  ERP software integrates data about the business with processes to run and control the business. Over the years, ERP has evolved from an on-premises software connecting multiple locations by private networks to hybrid or cloud-based applications, which users can access from almost anywhere. ERP platforms are critical enablers of finance, accounting, and operations teams.

During the same twenty-years ERPs became ubiquitous, businesses also became more focused on their core value-add and less vertically integrated.  Additionally, businesses in all industries are becoming more dependent on technology to deliver products and services to customers.  These two trends operate in tandem, elevating the strategic importance of vendor and tier one supplier management in delivering final output.

While vendor ecosystem management has become an increasingly critical component of enterprise performance, there has been little progress towards a true vendor management IT platform.  A true Vendor Relationship Management platform (“VRM” for short) can meet the needs of IT, finance, procurement, and operations professions in the way ERPs meet the need for financial and operational control or the way CRMs orchestrate global sales teams.  This yawning gap in the enterprise IT topology is increasingly being felt by CIOs and supply chain leaders, who face increased demands to understand costs, risks and opportunities across their vendor and supplier network.

A startup called Terzo is on a mission to fill the gap with its first-of-a-kind Vendor Relationship Management software platform.  Incorporated in May 2020, in the words of co-founder and Chief Executive Brandon Card, “Terzo is a true platform for the enterprise buyer – the enterprise operator.  Our platform breaks down corporate silos, centralizing data and allowing teams to understand their vendor ecosystems, as never before.  This becomes the obvious starting point to unlock insights to make smarter business decisions and maximize value from vendors.  It is also a natural platform to drive and track implementation of newer ESG initiatives across the supplier base.” In a nutshell, Terzo is designed to connect people and improve access to actionable data, breaking corporate silos along the way and increasing accountability through visibility.  “Terzo is the CRM for the buyer, we’re a new critical component to complement any ERP, because everyone is figuring out that the vendor ecosystem is critical,” explains Card.

Terzo’s innovative solutions can solve many complex problems, but according to Card the starting point is usually simple.

Improving Contract Intelligence and Visibility

Card highlights a big problem with a few simple questions:

• What would it be worth if your organization never missed another contract deadline or renewal?
• Would it be valuable if you could see, in real time, every contract commitment for the year and where you are actually spending during the same year, at any point in time?
• What if you could immediately see and understand the contract hierarchy of every vendor relationship you have, including how all your MSAs, SOWs and POs fit together and across your business units?
• What if you could understand your top 10 or even top 100 strategic vendors ranked by committed spend, actual spend, past spend or future committed spend?
• What if every datapoint you need to conduct a QBR or annual vendor review were at your fingertips, all the time without any special projects or work?
• What if you could be alerted immediately when actual spend approaches or exceeds contracted spend, with any vendor, anywhere in the world?
• What if you understood every product line item and its cost spelled out in a simple way from a complex contract?

“The root of the problem we solve is that leaders and the line, alike, don’t have the visibility they need into the contracts – the formal description of the relationships they have in place with vendors – to meet the challenge of managing those vendors effectively,” says Card.  He continues, “when I ask these simple questions to enterprise leaders, I almost immediately see a breakthrough, like they are having a sigh of relief that someone is connecting with this huge challenge, this pain point.”

Contract Lifecycle Management (“CLM”) software was initially designed for lawyers managing lots of legal language markups. Terzo takes a different approach by building a system that extracts critical data from contracts and then organizes them in intuitive ways that assist managers with everyday business decisions.  In this way, contract intelligence is delivered to all lines of business, be it IT, finance, procurement, or supply chain 🡪 magnifying returns on information.

Walk and Then Run

Once deployed, Terzo VRM delivers contract renewal alerting and tracking, vendor portfolio rationalization, product, and service redundancy identification, spend insights and alerts on overage.  “The functionality we bring out-of-the-box exceeds what ERP systems can do when it comes to processing contracts, extracting data, renewal tracking, analytics, and alerting,” explains Roger Laforce, Terzo’s Chief Technology Officer.  This is another area where Terzo is excelling with their advanced ERP solutions that stand out from the crowd. Moreover, by bringing all the business data together in a secure, native cloud application, management dashboards and reports can be delivered with no need to interface with external systems like Tableau or BI – “the data and the analytics are already all in the right place with Terzo,” concludes Laforce.  It sounds simple, but Terzo’s VRM allows its customers to escape hunting for contracts and supporting data in emails, spreadsheets, Sharepoint and disparate hard drives.

“Terzo represents a journey that can transform performance, but we coach clients to walk before they run,” explains Eric Pritchett, Terzo’s Chief Operations Officer.  “It sounds simple, but we start with achievable goals like delivering zero missed contract renewals and centralizing data to get teams off outdated tools and manual workflows,” he explains.  These initial steps create value by getting people working with modern technology.  “Once Terzo VRM is installed, there is this realization that smoother, automated workflows and data availability can improve how people look at problems and collaborate with others.  This creates a ‘beehive’ effect, where more interaction drives more data and use cases into the VRM.  It’s how the modern knowledge worker wants to work,” explains Pritchett.

VRM, a CRM For the Buyer?

Years ago, CRM systems were developed to allow selling organizations to be more effective by modernizing communications, client relationship mapping and targeting.  “Enterprises have invested heavily in selling – organizations care a lot about the top-line.” Explains Al Giocondi, a Terzo co-founder and Head of Sales.  On the other hand, organizations have invested much less in platforms that enable successful relationship management from the other direction.  “The reality is that corporate leaders haven’t invested nearly as much to manage their vendors as they have to sell their own products and services to their customers.  In a top-line world, that may work, but mature companies realize they have gaps that need investment, so they can spend smarter and manage their strategic vendors and suppliers more intelligently,” says Giocondi.

“The simplest way to think about Terzo’s VRM is that we are the ‘CRM for the buyer’.  Many of our customers tell us this,” continues Giocondi.  Using the VRM creates a people mapping across your organization – across departments and even business units.  The VRM also allows the buyer to play the old ‘CRM game’, in that all vendor stakeholders: sales coverage, support staff, account leaders and even executives are mapped to specific contract products and promises. “We bring in all these people with our relationships and the contact management component. We then map products and services to all these people so that our customers know exactly the contact when they have specific questions or need accountability,” adds Card. This way, the teams can get answers to their specific questions quickly, spending very little time hunting for the right person to connect with. That’s a key component of what Terzo brings with its out-of-the-box contact management capability. Card extols that, “We believe that bringing together the stakeholders and data is going to help our customers interact with the vendors better.  We see companies moving away from transactional relationships in favor of deeper, more transparent partnerships. This is a big theme we’re seeing in the market right now. At Terzo, we’re trying to change the traditional customer-to-vendor relationship to empower people to collaborate more effectively and achieve more.”

Exploiting Technology for Everyone

“We’re continuing to experience this strong trend towards a consumerization of the enterprise IT environment,” explains Laforce.  “Today, workers interact with iPhones, social media, and Smart TVs every day.  Consumers have been trained to want slick applications, which are easy on the eyes, configurable and intuitive to use.  Next generation cloud-based platforms like Terzo give knowledge workers that pleasant, consumer-like user experience… workers are sick of ugly screens and clunky interfaces designed in the late 90s,” argues Laforce.

No-code workflows, drag and drop configuration, individualized dashboards and reports, cloud-based artificial intelligence, optical character recognition, point and click data capture, smart alerting…. These technology trends should be impacting how the knowledge worker experiences the day, but for too many, they remain only buzz words.  Terzo is changing that.  “The great thing about a tech startup is that you pick a problem, and you get to apply all of the coolest new technologies to it right away,” says Card.  When we imagined the Terzo VRM, we made sure to incorporate all the coolest new technologies the cloud has to offer.  The result is a truly new way to work, where all workers across functions can interact with the latest technologies to get more out of their workday,” says Card.

Terzo VRM: Top Use Cases

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Origins of Innovation

While working at Microsoft, Card heard complaints from customers about how difficult it was for them to manage the Microsoft relationship.  On further discussion, Card learned this was a common theme across large enterprises in every industry.  Card reflected on his experience at Microsoft, as well as IBM and Oracle before. Card realized there was a massive problem with how customers manage relationships with their most important vendors. At every stop along his career at top IT firms, he met customers who complained about how complex their vendor ecosystem was and how they needed a “CRM for the buyer.” This market insight inspired Card to found Terzo, borrowing the word ‘third’ from the Italian language, to honor the goal of maximizing third party relationships. Since then, Terzo’s goal has been to be the world’s first “VRM” to help enterprises take a data-driven approach to their third-party suppliers. “Contract intelligence and transparency builds strong relationships because the best relationships are built on trust, understanding and shared interests” explains Card.

Solving simple frustrations are one thing, but recently, leaders have been confronted by the realization that their organizations are highly exposed – vendors and the supply chain are getting top billing in today’s strategic conversations.  The global pandemic has separated teams and disrupted supply chains.  This makes some enterprise siloes even more difficult to overcome for the line worker.  “The ‘new normal’ has outdated – frankly what were already outdated ways of working,” explains Pritchett.

Over the years, Terzo has built a strong solution around contract intelligence. Today, the 2022 roadmap of Terzo is heavily focused on supplier governance, supplier compliance, and supplier performance. “By the next two years, we’re going to be heavily focused around governance, compliance, ESG initiatives, and a lot of things governing the third-party vendor ecosystem. This way, we could help our customers understand who’s doing well and who’s performing poorly, so our clients can ultimately make bigger bets on whether they want to partner with specific vendors, either cloud-based vendors or service-based vendors across the client ecosystem,” concludes Card.