Artificial intelligence (AI) is already sharpening professional methods across a variety of industries. Applied to contract management systems, AI can be particularly effective.
How AI is changing contract management
Artificial intelligence in contract management will help the human workforce focus on strategy with an informed understanding of contact risk and the implications of data and patterns. Contract AI doesn’t replace contract management professionals – rather, it streamlines data insertion, evaluation and risk identification with automated data entry and risk assessment mapping. AI-powered contract management software provides the building blocks that contract management professionals require to improve oversight, find opportunities and mitigate risk.
AI and agreement data
Contract management artificial intelligence can select specific data points and define rules based on contract types. This intelligent software functionality is helpful because data is consolidated and easily digestible, allowing users to set rules regarding their specific locations, dates, monetary values, personally identifiable information (PII), payment card information (PCI) and other subsets of key data for any given contract. Once set, these standards are automatically followed, reducing the time wasted on tedious data import analysis so more time can be spent making data-driven decisions.
AI for term, clause and contract data extraction
AI-powered contract management software is a key player in data extraction functionality. Data extraction tools can also help enterprises that manage legacy contracts. If an organisation has legacy agreements to import into contract management software without a structured data spreadsheet that supports a bulk data import, bulk data can be systematically extracted to avoid manual data key-in. Consequently, contract clauses, key terms and data input are streamlined, providing the visibility necessary to search, report, compare and classify contracts and legal risks.
Contract AI streamlines contract workflow
To stop wasting time and money with inefficient contract workflows, contract administrators should identify the time it takes to complete individual tasks, as well as those which cause delays and increasing cycle times. Reliable, AI-powered contract management software provides automated, intelligent workflow that allows task performance monitoring.
So contract managers can identify the number of days it takes employees to complete assigned tasks. Knowledge like this is power.
On top of ensuring task deadlines are met, contract management software with AI capabilities can identify the number of days a given contract sits in each stage of the contract lifecycle. Visibility increases with easy-to-understand visual representations of workflow analytics and reports. Consequently, bottlenecks in the workflow process can be highlighted and inefficient contract lifecycle management practices eliminated. With newfound insight into why contracts are delayed, contract managers can reassign roles, rotate task assignments, or escalate tasks – evolving contract lifecycle management practices accordingly.
More accountability with AI-based contract management
Proper risk management is crucial in successful contract management. AI-powered contract management software makes risk analysis, assessment and mitigation easy and efficient. Contract management AI encourages risk mitigation by ensuring that users take advantage of all the software features and functionality (such as tracking of counterparties, workflow, employees, tasks, records etc.). Next, a risk score is provided to users based on the usage of available tools. This feature holds contract management professionals accountable for how closely they use the tools available to prevent risk.
Suppose, out of all the functionality that contract management software provides, Sally’s organisation only uses 45% (according to the tracked usage of risk mitigation tools). The users don’t leverage even halfof the software’s risk-relevant tools. As a contract management software system administrator, Sally is subsequently prompted to improve risk mitigation practices with specific insight into what her organisation’s process is lacking.
For example, if the intelligent contract management software reveals that too little time is spent tracking approval status, then she can adjust approval tracking accordingly, to increase effort to mitigate risks associated with counterparty activity. When contract management AI solutions establish checks and balances, risk mitigation practices improve, and risk is reduced – streamlining risk prevention process and minimising losses.
Contract management and risk assessment
Contract management AI can provide further insight into risk with risk rating and mapping features. Contract risk profile ratings allow contract managers to visualise risk, generating a risk assessment matrix. Users can now see risk probability patterns for events within contracts and the exposure that results. Insight into potentially negative consequences of an event with risk can help contract managers make decisions on a given contract. Visualising the results of an action associated with risk inherently reduces risk and allows contract managers to move forward with risk management decisions quicker and more efficiently.
AI in contract lifecycle management
If contract management professionals need to make sure they are powered with the tools above so that they can prepare for better contract visibility and reduced risk. Contract Insight® is an advanced contract lifecycle management software backed by AI that allows contract managers to manage, track and draft contracts faster, and automate and streamline the entire contract lifecycle with flexible features such as contract authoring, workflow and version tracking. Supercharge your contract lifecycle management methods now with a free demo of leading, AI-powered software from Four Business Solutions.
Four Business Solutions
Four helps small and multi-national organisations enrich the way they work. From supply chain to procurement and contract management, we have decades of experience helping companies forge ahead in the global market. If you’d like a demo of Contract Insight or simply to find out more about what we do, please call John O’Brien at Four Business Solutions on 0800 6250 025.
John O’Brien is the CEO at Four Business Solutions, global business consultants and software integrators providing business processes improvements in Finance, Supply Chain and Operations, across a broad range of industries.