Putting current, accurate contract data into the hands of responsible decision-makers is vital to reducing risk and optimizing revenue. However, accessing this information can be difficult when buried in thousands of nondisclosure and master services agreements.
AI for contract management offers tremendous potential for efficiency, consistency, and improved decision-making. However, implementing it effectively requires a clear plan.
AI-Driven Risk Assessment
Contract intelligence leverages the power of machine learning to sharpen professional methods for contract analysis and reveals opportunities, risks, and trends that have never surfaced at the enterprise scale. This is especially beneficial for complex contracts, which often use legalese rather than natural language.
Putting current, accurate contact information in the hands of responsible decision-makers can dramatically impact business performance. However, identifying vital contractual data buried in unstructured text across numerous legal agreements is often time-consuming, labor-intensive, and costly.
Contract intelligence helps by sifting through extensive collections of contracts and extracting all the relevant contract data—from numbers to words to dates to clauses. This makes it fast, easy, and affordable to spot obligations that have not been met or renew contract terms that are about to expire. This can significantly reduce risk exposure and operational inefficiencies for manufacturers. A contract intelligence platform can also track changes in regulatory standards and other external factors that may affect contracting.
AI-Driven Contract Lifecycle
Contracts are the core of all business agreements, but managing them can be complex. AI-enhanced software can streamline contract management from drafting to reviewing to monitoring compliance and even automating risk assessment. This simplifies the process and enables teams to get contracts signed faster, with minimal errors and without manual work.
While some AI contract drafting tools are point solutions that deliver value only at the drafting stage, actual contract intelligence platforms like Ironclad enable users to fully leverage the value of the technology across the entire contract lifecycle. The platform’s advanced features include natural language processing, allowing users to search for clauses, terms, or data points in lengthy contracts.
Contract AI also ensures transparency and accountability by establishing robust audit trails and version control. This records all contract activities and builds trust among teams. It can also help identify bottlenecks in workflow, enabling teams to reassign tasks, escalate issues, and evolve processes as needed.
In the contract negotiation stage, two parties — usually a buyer and a seller — work together to create an agreement with specific terms such as pricing structures, quality standards, delivery schedules, intellectual property rights, liability clauses, and more. For many companies, managing these contracts manually can be a Herculean task.
Intuitive, next-gen CLM solutions with AI capabilities streamline a contract negotiation process. For instance, a platform’s natural language processing lets it spot contentious contract terms and flag them for review. It also helps legal teams to incorporate standard clauses and track changes during negotiations easily.
Moreover, an AI-backed platform digitizes and centralizes contract data for quick retrieval. This significantly reduces time spent searching through contracts and allows legal teams to focus more on negotiating for the company’s best interests. It also paves the way for more strategic and innovative business decisions. Knowing your CLM solution’s AI capabilities is critical to maximizing its benefits for your organization.
Contracts are a business’s legal backbone, but managing them manually is laborious and error-prone. Missed deadlines, missed opportunities, and misinterpreted contracts can erode profits and expose companies to significant risks.
Contract intelligence is a transformative technology that changes how contract managers think about contract management. Rather than viewing contracts as static legal necessities, AI views them as dynamic repositories of valuable insights. Using specialized software, essential clauses, terms, and obligations are identified, pulled out of contracts, and transformed into structured data.
The resulting insights enhance negotiation, help organizations understand their contractual relationships, and improve risk management. Additionally, streamlined workflows make it easier for teams to leverage the contract intelligence they need to perform their jobs. As a result, manufacturers implementing an AI-powered CLM platform gain a competitive edge by improving the speed and efficiency of their contract processes. However, taking a thoughtful approach when integrating an AI-based system with existing tools and techniques is essential to prevent disruption and ensure smooth transitions.