Understanding the Potential in AI for Contract Management
Updated October 6, 2023
Contract management is a field that is rapidly revolutionizing with the implementation of artificial intelligence. The role of artificial intelligence in contract and document management is growing at an exponential rate.
Before the implementation of AI contract management, contracts had moved from musty file cabinets to searchable databases in the last century. Once contracts made it from paper documents to stored on servers, it became possible to search and access contracts. Unfortunately, contracts still had to be reviewed, tagged, and stored correctly.
Human errors, when dealing with massive volumes of documents, meant a wrong keystroke or two could make the contract challenging to find. Many hours were wasted in trying to find missing contracts or missing supporting documentation that had been mistagged in vast repositories.
When artificial intelligence came along, companies, firms, and organizations found that they could manage their contracts in a far less labor-intensive manner. Not only did artificial intelligence make it less labor-intensive to manage contracts, but AI meant more profit on each contract.
Contract lifecycle management once took laborious hours of tracking from all involved parties. Now, thousands of pages of contracts, along with their supporting documentation, can be uploaded in minutes.
What AI-driven contract management can do now
The software then provides updates throughout the lifecycle of the contracts. These updates help ensure that deadlines are met, invoices are paid and fulfill all contractual obligations. Without artificial intelligence, a significant portion of the total cost of each contract was often forfeited or lost due to inefficient management.
AI-driven contract management software provides on a centralized repository for all relevant contract data. The data is accessible across an organization, and inputs can happen from anywhere an authorized user is working. The new contract management systems provide a way for contracts to be stored, searched, tracked, and reported.
Contact management systems with artificial intelligence can provide in-depth insights from across all contracts. Identifying problems that interfere with contract completion, clauses that are unsuccessful, workflow tracking, and automated alerts all help more contracts reach a successful resolution.
Detailed risk assessments can be provided with just a few keystrokes. Risk mitigation features include alerts, identification of non-standard clauses, and automated storage that assures contracts are never lost or misfiled.
Contract management that utilizes AI technology allows for fast and efficient access to all data and metadata in contracts. Organizations are finding that mining their own contracts for data is improving numerous ways they do business. Access to contracts based on search parameters also makes it easier and faster to review contracts.
Newer AI-driven contract management software can incorporate third-party contracts as well as contracts created in-house. Combining all contracts into one system allows for superior analytics that include all related documents. Sophisticated analytics provide organizations with a wealth of information about the status of more than contracts. Analytics from contracts can help determine supply and demand, performance, and identify future opportunities.
What the future holds
Although some of what AI-driven contract management software can do already seems like science fiction, the field is evolving quickly. Experts say that in the near future, contract and document management software may be capable of:
- A smaller world—Geographical borders and language barriers will become less critical to the way we do business. The capability of contract management software to quantify and manage contracts in various languages will remove hurdles to international companies.
- Big data—As businesses continue to collect more data, contract management software will be able to perform improved reporting. The enhanced accuracy of reporting will mean decisions can be made smarter and more quickly. Machine learning will continue to grow, adapt, and provide improved outcomes.
- Improved mobile applications—Some contract management software is already mobile-friendly, but that will continue to expand in the future. Entire contract creation will take minutes created on mobile devices from anywhere in the world.