Back in 2014, Markus Mikola wanted to find a way to make it easier for companies to improve corporate governance and business operations. Mikola set out to create a SaaS solution that reduces costs, accelerates processes, and minimizes risks. Today, his Finnish cloud technology company, ContractZen, has offices in Helsinki and Palo Alto and customers in more than 30 countries. Mikola sat down with Jessica Abo to discuss how ContractZen is helping executives manage their contracts, board meeting minutes and other corporate documents.
Jessica Abo: Tell us about your company.
Markus Mikola: ContractZen is a new kind of governance software for the creation, management and secure sharing of critical governance documents. We put together previously separated software solutions like contract management, board portals, virtual data rooms, e-signatures, entity management systems, all-in-one easy-to-use solution, which you can take into use right away from the internet. Ultimately, we bring peace of mind to executives, investors, and entrepreneurs. That’s where our name actually comes from, ContractZen.
What trends are you seeing when it comes to companies’ workloads, around audits, major transactions and other due diligence situations?
We are living in very transformative times in many ways, especially as the business environment has changed profoundly all around the world in recent years. So we have this increased global competition, growing regulation and compliance issues. We have this globalization happening, digitalization, and now we even have the pandemic fast-tracking the digital transformation and affecting us all.
And all these business drivers are creating tremendous pressure on companies of all sizes. And as a result, there’s more and more mergers and acquisitions happening, more financing rounds, regulatory audits, joint ventures when companies are trying to cope with the situation. And unfortunately, in general, SMBs for instance, are not ready for due diligence. They lack the speed and agility needed to react to these challenges and they also cannot afford complex governance solutions. So there is a little bit of pain there.
In these scenarios, what happens when a business is not prepared, and how does proper digital governance help?
Well, the first risk is to lose some once-in-a-lifetime deal, right? There was this one company who got into negotiations with Google and for a very large business venture. The first thing they had to go through is the appropriate due diligence process, right? And the owners and executives started to look for all the documents throughout their 20-year-old history. And they, you know, both physical forms and paper formats at their home, drives and wherever. And it took them six months, and they were like this close to losing this awesome deal.
Certainly, there are many situations that have failed because the parties were not able to create trust between the companies as they were missing critical documents. But we properly managed governance and then with some new digital solutions available, companies of all sizes can be ready for due diligence. Actually, every day, if you have access to the right documents when you need it, it’s very helpful, very important. For instance, you can go to negotiation and check on the way from your mobile what was decided in certain board meetings.
Many businesses have been slow to take their documents and the process around creating those documents to the cloud. With everyone having gone remote over the pandemic, how have companies adjusted?
There’s more and more assets being migrated to the cloud everywhere. The paper-based processes are digitized, and there’s a huge growth happening both in the digital contract management side or board portal market, meeting management side and moving to paperless processes. Generally, as you and I both, we have used e-signatures but around the world, they are not used commonly even now.
I’m thinking in one or two years from now with the speed of adoption, everybody will be using those. And lastly, I would say that the increased spending on data security.
What is your number-one tip for companies who want to make sure that their company is as agile and as ready for opportunities as possible?
The transformation to digital governance of the company, our organization, includes a lot of things. And many executives see this as a huge and expensive process, right? And they think they have to change everything in one go and learn and buy expensive solutions and learn to use them and train the people. So my main tip is actually to start now, but start easy. One step at a time.
For instance, without moving all contracts or meetings to the digital form right away, but start with the most important ones and move the new ones. Sign them digitally. Have them in digital format. You can take the other valid contracts later on and other processes as you move on. But don’t stress on having to take everything in one go and being exhausted on the way.