Extracting important information from contracts was once time-consuming and difficult. Now, automated contract extraction allows organizations to streamline processes and leverage extracted information for better contract management and improved business relationships. With the rise of digital solutions, businesses often find themselves at a crossroad between using AI-based contract extraction software or hiring professional contract data extraction services. Both of these avenues offer unique benefits and are instrumental in enhancing the efficiency of contract data extraction.
This article delves into the functionalities and advantages of both approaches, providing insights into how they transform the landscape of contract management.
#1: AI-based CLM Software: A Game Changer in Contract Data Extraction
AI-based contract lifecycle management (CLM) software represents digital transformation in the practice of contract data extraction. This contract management software leverages built-in artificial intelligence to automate and streamline the process of extracting vital information from contracts. AI-based CLM software is designed to quickly identify and extract key metadata points from contracts. These include:
- key dates.
- involved parties, counterparties, and other relevant stakeholders.
- product or service details.
- clauses and other key pieces of contract language.
- payment terms and other obligations.
- all these and various other critical pieces of information.
The automation significantly reduces the time and effort required to manually review contracts, thereby increasing efficiency and accuracy. Additionally, intelligent fuzzy logic matching of legal phrases and terms can further boost structured data recognition and contract management system operational efficiency.
Most AI-based CLM solutions are cloud-based, offering the convenience of remote access and web-based coordination. Users can extract data from contracts vritually anywhere, anytime, fostering a flexible and efficient work environment.
Additional Contract Management Solutions Benefits
Contract Intelligence software does not end with data extraction. It also:
- streamlines and centralizes contract management from contract creation to contract review and renewal.
- integrates both native and external electronic signature capabilities.
- helps proactively map risk variables to better mitigate risks.
- serves as a contract analytics software system with advanced contract analytics tools such as visually-engaging dashboards, launch pads, and custom reports.
- includes machine learning algorithms so that when teams import contracts and create them, their contract repository grows evermore intelligent.
- provides all of these tools and almost countless others.
#2: Contract Data Extraction Services: The Human Touch
While AI offers impressive capabilities, many businesses opt for professional contract data extraction services as well. Both are good options and depend on an organization's needs!
Data extraction services provide the human touch of an expert, which is often necessary for handling complex or sensitive contract data. They are typically staffed by experts who bring a wealth of experience to the table. They can handle various contract types and offer customized solutions tailored to specific business needs. Complex contracts with intricate clauses or non-standard formats may require human intervention for accurate data extraction.
A contract data extraction solutions provider will typically undergo an intake process with its client to determine the scope of the extraction and the clients' needs. The data is obtained in a secure matter, cleaned, and organized. At the end, structured data can easily and quickly be imported into contract management software.
Ensuring Compliance and Reducing Risk
Data extraction services are not only efficient but also focus on compliance and risk management. By having a team of professionals overseeing the process, businesses can virtually ensure that their contract data extraction adheres to legal and regulatory standards.
Comparing AI-based CLM Software and Data Extraction Services
When deciding between AI-based CLM software and data extraction services, businesses must consider factors like the volume of contracts, the complexity of data, and the level of accuracy required.
- Volume and Speed: AI-based CLM Software Takes the Lead: For businesses dealing with a high volume of contracts, AI-based CLM software offers a faster and more cost-effective solution. Its ability to process large quantities of contracts quickly is unmatched by human-operated services.
- Complexity and Customization: The Strength of Data Extraction Services: In cases where contracts are highly complex or require a bespoke approach, professional data extraction services are more suitable. Their expertise in handling unique contract formats and nuanced data is invaluable.
- Accuracy and Learning: A Blend of Technology and Expertise: While AI-based CLM software is continually improving in accuracy, the human expertise in data extraction services ensures a high level of precision, especially in complex scenarios.
Conclusion: Finding the Right Fit for Your Business
Both AI-based CLM software and contract data extraction services offer distinct advantages. The choice ultimately depends on the specific needs of the business, including the volume of contracts, the complexity of the data, and the desired level of accuracy. By understanding the strengths of each option, businesses can make an informed decision that best suits their contract management requirements.
Thankfully, CobbleStone Software offers both AI-based CLM tools for data extraction AND contract data extraction services!
Want to learn more about what CobbleStone Contract Insight® has to offer? Book a free demo today!
*Legal Disclaimer: This article is not legal advice. The content of this article is for general informational and educational purposes only. The information on this website may not present the most up-to-date legal information. Specific guidelines on unilateral contracts are governed by state law. Readers should contact their attorneys for legal advice regarding any particular legal matter.