Artificial intelligence (AI) is already sharpening professional methods across a variety of industries. However, advancements in AI will be particularly advantageous as it applies to contract management systems - if fed a nutritious diet of contract data.
How AI is Changing Contract Management
Cast aside apocalyptic visions of malevolent androids. Artificial intelligence in contract management is designed to enable humans to focus on strategizing and making informed decisions with an enhanced understanding of contract risk and the positive and negative relationships of both data and patterns.
Contract AI does not replace contract management professionals; instead, it streamlines data insertion, evaluation, and risk identification tasks with automated data entry and risk assessment mapping. AI-powered contract management software provides the building blocks that contract management professionals need for improved contract oversight, proactive opportunity identification, and risk mitigation.
Artificial Intelligence and Agreement Data
Contract management artificial intelligence can select specific data points and define rules based on contract types. This intelligent contract management software functionality is helpful because data is consolidated and easily digestible, allowing users to set rules regarding locations, dates, monetary values, personally identifiable information (PII), payment card information (PCI), and other subsets of key data for a given contract. Once set, these standards are automatically followed, reducing the time wasted on tedious data import analysis so more time can be spent making data-driven decisions.
AI for Term, Clause, and Contract Data Extraction
AI-powered contract management software is a key player in data extraction functionality. Data extraction tools can also be beneficial to organizations that manage legacy contracts. If an organization has legacy agreements that need importing into contract management software but does not have a structured data spreadsheet with which to perform a bulk data import, said bulk data could be systematically extracted so that users do not have to manually key in individual fields. Consequently, contract clauses, key terms, and data input are streamlined, providing the visibility necessary to search, report, compare, and classify contracts and legal risks.
Contract Artificial Intelligence Streamlines Contract Workflow
In the interest of minimizing wasted time and money resulting from inefficient contract workflow, contract administrators must take note of the time frame in which individual tasks are completed, as well as which tasks are causing delays and increasing cycle times. Reliable, AI-powered contract management software provides automated, intelligent workflow that allows task performance monitoring. Contract managers can identify the number of days it took employees to complete assigned tasks.
On top of ensuring task deadlines are met, contract management software armed with AI capabilities can display the number of days a given contract is sitting in each status or stage of the contract lifecycle. Visibility increases with easy-to-understand visual representations of workflow analytics and reports. Consequently, bottlenecks in the workflow process can be easily identified so inefficient contract lifecycle management practices can be eliminated.
With newfound insight into why their contracts are being delayed, contract managers can reassign roles, rotate task assignments, or escalate tasks - evolving their contract lifecycle management practices accordingly.
More Accountability with AI-Based Contract Management
Proper risk management is crucial in successful contract management. AI-powered contract management software makes risk analysis, assessment, and mitigation easy and efficient. Contract Management AI encourages risk mitigation by ensuring that users are taking advantage of all the features and functionality made available to them by their contract management software (such as tracking of counterparties, workflow, employees, tasks, records, etc.).
Next, a risk score is provided to users based on the usage of available tools. This feature holds contract management professionals accountable for how fastidiously they utilize tools to prevent risk.
Suppose, for example. out of all the tools and functions that contract management software provides, Sally's organization only uses 45% of them according to the tracked usage of risk mitigation tools. The users do not even leverage half of the software’s risk-relevant tools. As a contract management software system administrator, Sally is consequently prompted to improve risk mitigation practices with specific insight into what her organization's risk mitigation process is lacking.
For example, if Sally's organization's intelligent contract management software reveals to her that it is not putting enough time into tracking approval status, then the organization adjusts how it tracks approvals accordingly so that it is allocating the necessary effort to mitigate risks associated with counterparty activity. When contract management AI solutions establish checks and balances, risk mitigation practices are improved, and risk is reduced - streamlining the risk prevention process and minimizing losses.
Contract Management and Risk Assessment
Contract Management AI can provide further insight into risk with risk rating and mapping features. Contract risk profile ratings allow contract managers to visualize risks. Based on the tracking of risk, an AI-powered contract management software can provide a risk assessment matrix.
Not only can users see risk probability patterns for events within contracts, but they can also see the exposure that results from risks. Insight into possible detrimental consequences of an event with potential risk can help contract managers decide how to proceed with a given contract. Visualizing the results of an action associated with risk inherently reduces risk and allows contract managers to move forward with risk management decisions quicker and more efficiently.
Artificial Intelligence in Contract Lifecycle Management
Contract management professionals need to make sure they are powered with the tools above so that they can prepare for better contract visibility and reduced risk.
CobbleStone’s Contract Insight® is an advanced contract lifecycle management software backed by artificial intelligence that allows contract managers to manage, track, and draft contracts faster, and automate and streamline the entire contract lifecycle with flexible features such as contract authoring, workflow, and version tracking. Supercharge your contract lifecycle management methods now with a free demo of CobbleStone's leading, AI-powered software.