Large Fortune 1000 companies deal in thousands of contracts every year. With most business transactions validated through carefully drafted and negotiated contracts, these form a single source of facts for business communications and are pivotal to positive business relationships. Despite the high stakes attached to contracts and their critical role in business finances, contracts are still managed manually in most organizations. Managing so many contracts often leads to manual errors and omissions, lack of visibility, lengthy processes, and increased risk of non-compliance.
Considering the number of issues that come with manual contract lifecycle management software; digitized, integrated contract management solutions have started to grab the attention of legal teams. With automated workflows, pre-approved template and clause library, integrated processes and advanced analytics, AI powered contract management solutionsare the present and the future of competent, profitable contract management.
Let us look at how these advanced, next-gen contract management solutions are making life easier and contracting more effective:
- Unified view with easy search options
Contracts once signed are often stored away and lost in some file on a computer, a personal hard drive or a file cabinet. This makes it nearly impossible to search for a specific contract, track its performance or update it in case of changes in compliance. With no visibility or no way to track contracts, they are often exposed to financial and compliance risks. A contract management system unifies all current and legacy contracts in a single, Contract Repository, converts them into a standard company format, and makes them trackable and searchable easily from across locations through free-word searches, key word searches etc.
- Easy request intake and contract drafting guided by smart wizards
The first step in contracting is initiating a contract request. Without a digitized, integrated process, this step alone can take days or even weeks with first filling in all contract details in a format, identifying the right approver, sending requests via mails and awaiting a response. Contract management simplifies this process with smart wizards guiding in populating the pre-configured forms and auto-generating the first best draft of a contract in the right template and with the appropriate clauses. The contract draft is then automatically routed to the right approvers who are in turn alerted of the same. Thus, accelerating the entire process from weeks to as little as a few days or hours.
- Automated workflows with Robotic Process Automation
During reviews and negotiations, there are multiple back and forth of contract documents via email. With no way of tracking where these are stuck, there are often delays in this phase. An automated contract management system ensures contract documents are sent to the right stakeholders for review and negotiations. With a real-time tracking system, there is increased transparency and accountability leading to quicker turn-around times. Moreover, each version is auto-saved, ensuring an audit trail is maintained and there is no confusion around the latest version.
- Quick and accurate third party parsing with NLP
Contracts shared on third-party papers are any legal team’s nightmare. Having to go through these manually is not just painfully time-consuming but can also lead to manual errors, omissions, and delays. With AI powered Natural Language Processing (NLP), these third-party papers are automatically parsed into clauses and sections. Every clause is compared to internal clause library and in case of big differences is automatically routed to the legal teams for reviews.
- Real-time tracking and management of contracts
Once a contract is signed off is when the need arises for tracking its performance and growth. An advanced CLM system makes it a breeze to track and monitor contracts, post-award. With pre-configured triggers and alerts and a customizable dashboard, all stakeholders can view the contract progress, updates, milestones or any approaching deadlines/ compliance changes in a graphical format in real-time and from any device.
- Smart analytics for informed decision making
With the right tools, historic contract information is a gold mine of rich statistical data that can be leveraged for smart decision making. Artificial Intelligence powered predictive analytics can analyze this data and extract patterns to accurately predict outcomes of certain types of contracts and challenges that might need our attention. It can assist in making informed decisions and altering a contract’s path for better returns through data analysis.
- User-friendly, comprehensive reporting system
Contracts being a source of truth for most business transactions, are a window into important financial and operations data. They can reveal how contracts are performing and their effect on the overall company growth. With comprehensive reporting solutions offered by advanced CLM solutions, management officials can view and analyze detailed information about contract performance, financials, ROIs, etc. These reports can come useful in understanding the path to take in the future and make decisions based on the same.
From the above, we have established how contract management systems are evolving contracting to a whole new level. Apart from making life easier for contract and legal professionals, these AI powered CLM solutionsare turning contracts into a powerhouse of statistical data that can help management make informed and accurate organizational decisions.