How Artificial Intelligence Brings Analytics to Contract Management
How AI Adds Analytics to Contract Management
Artificial intelligence is changing contract lifecycle management in a positive way. In this blog post, we discover how AI is evolving contract management for many forward-thinking legal and procurement organisations. Advances in AI software are helping companies to address contract challenges by enabling them to gain control and transparency over the contracts they have in place and the clauses within them.
AI is aiding employees by removing the number of manual processes they have to manage, freeing them from dull administration tasks. Read on to discover how AI is driving this change.
Reduce contract management inefficiency
Contract management is a time-consuming process. A Forrester Consulting report on the State of Systems of Agreement 2020, commissioned by DocuSign, states that 9 out of 10 firms are burdened by manual agreement processes. These processes are to blame for poor customer experiences, project delays and increased costs, and they can negatively impact firms’ ability to recognise revenue. Automating processes by using AI can decrease levels of inefficiency, saving time, cost and resources that can be focused on growing the company. AI software can identify inconsistent or non-standard terms and usage in contracts too, as well as flag missing clauses.
Search contracts easily
The Forrester State of Systems of Agreement 2020 report also highlighted that 59% of respondents said they were unable to effectively search the full text of agreements, and 51% stated a lack of visibility when searching for signed and completed agreements. AI-powered contract management software makes it easy to centralise, store, search and review agreements across your entire organisation.
Update contract clauses
Contract Management AI software can help to make an organisation’s agreement processes smarter. DocuSign Insight can automatically extract key terms or clauses across contracts. Thinking of contracts as modular entities allows teams to surface all contracts featuring a particular clause and update them. This type of software uses AI and machine learning algorithms to identify the clauses that have issues so you can immediately start a process to revise and remediate those agreements and get them signed by other parties. This also helps to highlight non-standard terms.
Simplify contract negotiation
In Forrester’s State of System of Agreement Research Report 2020, 56% of respondents said they felt there was a lack of visibility into the status of their existing contracts or delays due to errors in the process. AI helps to automate the process end to end. It can help to flag key dates for contract renewal, identify issues and streamline the document review process. Discover more about contract management trends.
Predict the business impact of contract changes
Using AI technology in contract management can help organisations make better business decisions too. With contract management software like DocuSign Insight, AI-powered contract discovery and data extractions allow you to run analytics that can report on the types of contracts your organisation has in place and help you better understand the potential risks of any upcoming regulatory changes. For example, as data privacy laws continue to be passed and refined around the world, your data protection clauses will likely need to be continuously reviewed and updated.
DocuSign Insight uses machine-learning algorithms, which make it easier to search contracts for a specific clause or phrase. Customised AI models can be used to analyse and adapt to governing law and other terms affecting trade and compliance. It can also provide alerts for known contractual issues so that you can begin immediate remedial action to avoid further costs and risks. Machine learning, AI-powered technology and NLP can help companies find agreements across networks and provide a single access point for all contracts.
AI contracting software has the potential to automate significant aspects of contract lifecycle management. Looking ahead, it is likely that the structure of legal and procurement departments will change as technology advances. Beverly Rich, J.D., Doctoral candidate at the University of Southern California Marshall School of Business, explores “How AI Is Changing Contracts” further in a Harvard Business Review article.