Artificial intelligence is becoming more prevalent in our daily lives every year. Artificial intelligence is also used by businesses to determine which customers to target, what products to improve, and which processes to automate.
Surprisingly AI has not made much progress in the legal field so far. However, as more companies see the great benefits of AI, this number will only grow.
How AI Is Changing Contract Management
Artificial intelligence in contract management toolsenables contract professionals to concentrate on strategy and make informed decisions.
Contract AI is not meant to replace contract managers. Instead, it is intended to simplify data insertion, extraction, and risk identification tasks. AI-powered contract management software converts static documents and contract data into dynamic building blocks, which contract managers need to improve contract oversight, proactive opportunity detection, and risk mitigation.
Smart Contract Authoring
The AI enabled CLM solution allows for intelligent contract creation. It automatically identifies and arranges contracts in the contract library. CLM solutions can automatically learn from past contracts and identify patterns that allow them to recommend suitable clauses.
An AI-powered CLM has a context-based analysis as its most distinctive feature. CLM solutions can identify which clauses should be used for specific contracts and provide context-based analysis. It will, for example, suggest that a currency fluctuation clause be included in a procurement contract if the vendor is outside the country or based elsewhere.
Automated Organization, Classification, And Extraction of Important Pieces Of Information
Another technology-enabled service is automated contract abstraction and migration. This automates the process of extracting information from all your contracts. AI algorithms powered by NLP-based machine learning and natural language processing (NLP) perform abstraction and migration with unparalleled speed and accuracy.
This creates an index of all key terms, provisions, and obligations. You can extract key information from contracts, including vendor and organization information, contract signature dates, renewal dates, and names. Auto-tagging can be done for thousands of contracts with the correct companies and data. You can also set automatic renewal alerts. This will allow you to transform your business.
Advanced Analytics for Risk Assessment and Mitigation
AI-powered CLM solutions use natural speech processing to classify clauses, read documents, and highlight differences among versions. The system can read and highlight clauses or terms that are not in the organization’s best interests. It can also suggest other clauses to reduce risk and protect the organization.
AI for The Extraction of Term, Clause, And Contract Data
AI-powered contract management software plays a crucial role in data extraction functionality. Organizations that have legacy contracts can also benefit from data extraction tools.
Organizations that have legacy agreements to import into contract management software, but do not have a structured spreadsheet to use for bulk data imports, can have bulk data automatically extracted. Users don’t have to enter each field manually. Contract clauses, terms, and inputs are simplified, allowing users to search easily, report, compare and classify legal risks and contracts.
Get Actionable Insight into The Obligations in The Contracts
AI contract management solutions give organizations the insight they need to get the most out of their negotiations. It has many advanced capabilities that allow businesses to analyse large quantities of contracts and provide reports on the contractual data across the entire system, languages and geographies.
You can create dashboards that you define to show KPIs, SLAs, milestones, and other parameters. It is possible, for example, to see the business payments obligations and identify all contracts subject to a particular regulation such as requisite quality assurance or contract conditions.
A better understanding of contracts allows for performance tracking, compliance improvement, and optimization of obligation management. Its user-definable dashboards, reminders, and customizable alerts allow for better visibility into contract terms and better implementation.
Optimizes Contract Review Timelines
According to estimates, contracts approval lasts between 3-4 weeks in accordance with research from the Forrester Research study. It is a significant time loss due to multiple reviews during the contract is being signed and negotiated, which requires a variety of stakeholders. With AI-powered CLM software, the company combines all the involved functions onto one platform.
It highlights the changes to clauses, facilitating comparisons of versions, and consequently improves turnaround and review time. It also effortlessly integrates third-party contracts in the software. This allows for visibility of all contracts are evaluated on one platform. This helps in the implementation of policies and ensuring compliance across the entire enterprise. Utilizing Artificial Intelligence (AI) in the management of contract lifecycles solution allows companies to speed up turnaround times considerably.
Companies that use artificial intelligence-powered contracts are more likely to sign better agreements and put less effort into them. Intelligent contract solutions reduce human interaction in the management process. This allows your business to acquire new clients, improve your business relations and, most importantly, grow your company. You’ll be one step ahead of your competitors when you leverage artificial intelligence in your management process.