Artificial Intelligence (AI) has been at the forefront of many conversations over the years, and this remains the case today. Often people muse about what they’ve seen in sci-fi films and what it would be like if their wildest fantasies or fears came true. However, artificial intelligence is already widely used throughout the world for enhancing many processes and optimizing business operations. AI gives way to more reliable decision-making as it supplements human knowledge with aggregating data in order to make intelligent predictions. These values are essential for many business practices but none more so than contract management. From creation and management to renewals and analytics, Artificial Intelligence has become vital for every step of the process.
As computers are able to read faster than any human could ever hope to, when dealing with lengthy and complex documents such as contracts utilizing a machine to read for you increases how efficiently your team can work through their daily tasks without the risk of errors. Sifting through thousands of documents a second is only part of the benefits AI can bring to your business, as artificial intelligence can also recognize patterns and understand the context of the documents.
Writing contracts manually can be a gruelling process; even with software that comes with templates to speed up the process, each contract needs to be adjusted for every client’s or supplier’s needs. Artificial intelligence can take you further than templating by authoring your business contracts for you by using the agreement details you supply to incorporate necessary clauses. These clauses often account for data, such as agreement length or relevant history, that is often overlooked due to human error.
AI can also process details provided in emails, scanned documents, paper forms, or PDFs using optical character recognition, which converts various documents into text and allows the AI to review them for crucial data points, including costs or quantities. Once it has all of the relevant data from these documents, Artificial Intelligence can then incorporate them directly into your contracts without the need for human intervention and only alerting people when it flags errors or discrepancies. Furthermore, an AI will learn from modifications or corrections you make, which will provide it with more tools to interpret documents of a similar nature or with the same discrepancies with greater accuracy in the future.
Old methods that required staff to comb through documents by hand in order to write contracts are outdated and inefficient, as AI has significantly improved the process due to the continual learning and speed in which it can process as well as create contracts.
The right AI software can help you generate a steady stream of intelligence with integrated analytics to show the performance of your contracts throughout the duration of the agreement. This data can help drive your negotiations when it’s time for renewal and allow you to make data-led decisions on whether continuing with a contract is right for your business. Artificial Intelligence can help provide you with the relevant information required in order to identify cross-selling and up-selling opportunities that you may have missed if doing the work by hand. Check out SirionLabs, for more information on analytics for contracts.
Mitigating Potential Risk
Managing risk within a business is vital. Whether you’re writing new client contracts, sourcing new suppliers, or making purchases, you want to ensure that the information you have for the risks is accurate. When you utilize Artificial Intelligence, you mitigate your potential risk exposure during the contract creation process without having to sacrifice any opportunities, as the AI will consider areas you may not have previously considered when calculating the risk. Artificial Intelligence analyzes the language used in contracts and responds accordingly, including making recommendations for new clauses based on the context of the document as well as the historical data of previous agreements of a similar nature. Once all of the relevant information has been analyzed, the Artificial Intelligence software can make data-led decisions for what clauses you need to include in order to protect your company’s interests.
Gathering signatures for contracts can be a lengthy process. Typically, many departments within your company need to approve them before the final document is sent over to the client or supplier for their signature. AI is crucial for streamlining the approval process. It can identify who needs to sign a contract and where before automatically sending the document to the relevant parties for their electronic signatures. Furthermore, these systems can learn from previous examples when a contract will require additional approval and integrate those steps into its processes seamlessly.
Management And Renewals
Managing current contracts and renewals can be a challenging process as your company grows. With proactive notifications from your AI software, you could easily stay on top of your workload without worrying about missing any upcoming deadlines. However, you may be wondering what role the AI has in this process as many management tools provide reminders. Artificial Intelligence software goes a step further than simply notifying you of deadlines or changes. The AI software may begin the renewal process and set the approval processes in motion or make necessary adjustments based on emails or other documentation relating to a specific contract. It plays a prominent role in the creation process to streamline your procedures while providing you and your staff with more time to spend on other tasks.
Your contracts teams work hard to negotiate prices with suppliers, and many companies find that they need to chase other departments to ensure they are following the terms of the contract correctly when purchasing goods. Typically, this is due to outdated trackers being used or the information not reaching the right people when new agreements have been signed. AI software can assist with the purchasing management by going a step further than other platforms that simply direct users to the correct catalogs by recognizing different product types and offering users replacements items they can purchase through contracted suppliers. When your team begins a purchase requisition, the AI software will automatically check if there are any active contracts available for the desired items and can learn patterns to recommend similar items. This streamlined process provides companies with significant savings on the outgoings while developing data for more buying power when it’s time to renegotiate supplier contracts.