What is Artificial Intelligence Anyway?
In recent years, many manual tasks have been automated because we have successfully taught a machine to work like us and get the job done. Recent innovations have pushed the boundaries of what we thought was possible — these days, we can now “teach” machines to “think” as humans do. This is where artificial intelligence or AI comes in.
But wait, what is AI anyway?
According to John McCarthy, AI is “the science and engineering of making intelligent machines.” Central to this concept is creating systems that function rationally and mimic human behavior in solving complex problems. Unsurprisingly, AI has been integrated into the workflows of most industries, expediting processes and improving overall productivity, including contract lifecycle management.
How Can Artificial Intelligence Improve Contract Management?
Artificial intelligence in contract management helps in streamlining data entry, extraction, and protection. It can identify and map risks, using static data into dynamic information that businesses can use to determine opportunities and mitigate losses.
There are five ways that artificial intelligence for contract management can choose particular data points and set up rules depending on different contract kinds. Users can set rules regarding locations, dates, monetary values, personally identifiable information (PII), payment card information (PCI), and other subsets of important data for a specific contract using this functionality of intelligent contract management software because the data is consolidated and understandable. Once established, contract intelligence automates these processes, saving time on laborious data import processing so that more time may be spent on making data-driven decisions.
Automated Contract Authoring
Corporate lawyers have their hands full with many things, with contract management among the most time-consuming and labor-intensive of them all. They would have to draft contracts, warrant that all terms and conditions are written following regulatory guidelines, and ensure that all obligations under every contract are complied with fully and on time.
With the use of AI, anyone in your business can create a contract using existing templates and drag-and-drop clauses based on contract analytics. In an instant, you can determine patterns from previous contracts of the same type and apply relevant clauses to new ones.
The man hours expended by highly paid lawyers on work that could be automated through AI come at much too high a cost, and if your goal is to scale up quickly with your core employees focusing on more revenue-generating tasks, then it’s time to consider using a contract management software with AI capabilities.
Improved Workflows With 24/7 Tracking and Alerts
As your business grows, the number of your contracts and obligations will consequently increase. Keeping track of all the clauses, milestones and commitments can be overwhelming without a system. Even worse, your company can face expensive consequences in the event of contractual breaches and may even result in the destruction of relationships your company worked hard to build.
Risk Reduction In Contractual Relationships
Businesses are constantly racing to make sure their practices and policies adhere to established rules. They can act quickly thanks to technological advancements, as they have access to timely information. However, compliance has become a difficult endeavor due to the speed at which regulations change and the rising complexity of new requirements. To stay current, compliance officers must scour a variety of sources for information. Valid clauses now become obsolete tomorrow, rendering the contracts non-compliant and creating the potential for litigation.
Given that non-compliance might cost companies millions of dollars, a company's future course can change instantly. Software for AI contract analytics can avoid these problems. A lot of documents are analyzed by Machine Language Processing MLP algorithms, which also classify and detect clauses and highlight variations between different document versions. To determine the risks, opportunities, and obligations associated with commercial partnerships, NLP and semantic analysis are also used. AI enables the tool to manage unforeseen hazards, find business-beneficial opportunities, and establish compliance-related obligations. With such tools, you may be confident that new laws, no matter how complicated, won't catch you off guard. The audit trail will provide visibility and guarantee that you can notify all stakeholders.
Speeding Up Negotiations
You must talk with partners and create an arrangement that benefits both parties before contracts are approved and put into effect. In these talks, corporations frequently invest a lot of time and money into back-and-forth discussions and repeated document inspections.
To gain useful knowledge for better negotiations, you need also perform thorough research about the partner's operations, product history, and any other information you can get your hands on. However, time is money in business, so you don't want to spend days or weeks on one particular business prospect while neglecting others.
Using AI contract analytics tools, you can considerably save the time and effort needed for negotiations.
According to a Goldman Sachs study, automating contract management speeds up negotiation cycles by 50% and reduces operating costs by as much as 30%.
What value can artificial intelligence provide to contract analytics, though?
It first provides you with access to historical data and contractual insights, enabling you to spot provisions that present opportunities and subsequently negotiate better bargains.
Second, it specifies contract parameters to make sure you adhere to established guidelines and prevent supervision during contract talks.
Finally, it gathers business terms like product prices, incentives, and discounts through intelligent document processing organize the data for enterprise integration, and then enforces the terms.
Acceptance and Performance
Before being carried out, every contract needs to be approved. To collect signatures, interested parties must be met in person. It doesn't appear difficult in a small business with a limited number of contracts to carry out each month. It becomes difficult, however, when dealing with a big company that has thousands or perhaps more customers.
The management of finance, legal, and procurement contracts — all of which have several contract variations and demand additional approvals — will be difficult and perplexing if handled manually.
If you're still using the manual signature technique, don't forget about logistics costs. You can greatly improve contract approval and execution time with an AI contract approval platform.
While digitalization makes it simple to sign contracts, AI contract analytics software accelerates approval by identifying the contracts that require approval from various parties by utilizing contextual cues. Additionally, the system allows for the addition of approval procedures and automatically updates contractual parties upon renewal. The program can update you so that you are compliant if any regulations change.
Be Data-Driven And AI-Powered With Lexagle.
Because technology makes contracts easier to access and administer, digitizing contract management is an imperative necessity in this digital age. Analytics for contracts are now more effective thanks to AI. You may automate every step involved in managing contracts, in addition to accessing and handling contracts with less time, effort, and cost.
Lexagle boasts of an end-to-end contract management platform that utilizes artificial intelligence in various stages of the contract lifecycle. We offer automatic redlining powered by machine learning, AI-assisted contract review softwares, automated contractual obligations tracking, as well as analytics report generation. The Lexagle AI Engine is expertly incorporated in the drafting of your contract with a template builder that identifies common clauses in different forms of contracts and suggests them when you make future contracts of the same kind. Workflow and task management and counterparty verification are also made easy through the platform, gathering relevant data to churn out insightful analytics that can help your business make smarter decisions moving forward.
Book a demo today and discover how Lexagle can help your business become data-driven and AI-powered to get ahead of your competition.
