The contract management has changed significantly in the past few years. Due to the ongoing COVID-19 outbreak and the emergence of digital technology over outdated legal methods of operation, companies need to adopt automated tools for contract management which allow remote collaboration and automated workflows with intelligent intelligence. This is why we have the ContractSafe contract management software coupled with advanced technology tools that your businesses should use.
The Latest Trends in The Field of Contract Management
Contract Review and Negotiation Automation
Currently, for most businesses, legal departments are often forced to rely on the traditional contract review and negotiation process, which has not changed significantly over the past several decades. Naturally, every contract review requires many emails between colleagues to share and discuss issues. Additionally, negotiations, it is a long-winded process.
AI contract management software is designed to speed up data analysis and manage risk by utilizing an automated process of data input and mapping risk. This frees up time to concentrate on the most important aspects of a company’s daily activities and expansion, and the time spent is devoted to small specifics in contract transactions. Automating contracts with AI will improve the speed of the contract review process by up to 5X and reduce the risk of contract negotiation. The absence of deadlines or continuous delays is less frequent, and all versions and contract changes are stored and available at all times.
The Increasing Importance of Artificial Intelligence in Contract Analytics
Artificial Intelligence (AI) is an appropriate term, but many business professionals don’t understand the real-world implications of an AI-assisted contract management system.
AI can be applied in clear ways to solve some of the most pressing issues in any document management system. The latest AI, as well as business analytics software, offer an easy solution. For instance, natural language processing software lets you review many contracts in a matter of minutes and allows you to find and eliminate risky or outdated terms with minimal manual effort. Furthermore, since AI trains traditional contract approvals (like the legal team) to review contracts, line-of-business owners don’t have to fret about digging into complicated contracts or becoming lost in legal and technical terms.
Automated Analysis of Clauses
Incorrectly written contractual clauses can cause problems with post contract management. This is an extremely important job with operational and financial implications, which is why it requires careful and thorough monitoring. From renewal requests to speedy and simple managing contracts, it is essential to make sure that clauses are uniform throughout the company contracts to minimize compliance and contract risk.
To speed up contract signing and to ensure an easy transition from the pre-contract to the post-contract phase while remaining compliant, a thorough clause analysis is essential. A system is required to find and extract the most important clauses from contracts. Typically, AI extracts metadata from contracts, extracting important dates, the value of the contract, and types, as well as the names of parties and the associated departments. However, by 2023, and even beyond that, AI will surely expand its wings and roots and play an important role in the extraction and automation of clause analysis.
The Shift in The Use of Machine Learning, From Contract Review to Data Insights
Historically the use of artificial intelligence and machine learning applied to contracts has typically been focused on contract review cases and the search for the most important clauses and terms in contract pdfs.
Since contract document templates provided in the contract management software have become more popular and standardized, machine learning algorithms no longer have to find key clauses from contracts and can instead concentrate on finding patterns in contracts. Contract patterns can aid businesses in extrapolating the information from contracts for better decision-making.
Better Visibility to Compliance Management
Inability to meet the contractual obligations puts you at risk and could limit opportunities. This happens mostly because of an absence of understanding or accessibility to contractual information such as conditions, terms and commitments, obligations, and entitlements.
Contract managers are seeking ways to monitor the performance of their contracts and improve predictability using AI. CLM solutions that identify deviations from agreements and commitments are highly sought-after. AI-enabled compliance management for contracts is expected to lead to a better ability to manage renewals and greater and more effective collaboration between stakeholders.
Integrations and Customizations
The use of CRM to handle customers ERP in place to handle AP and AR, as well as other systems that manage different business functions, is a problem for mature organizations. This creates an inefficient system of information that has no clear communication. These stand-alone business applications are increasingly leading to an integrated technology that simplifies all contracts and associated activities.
Therefore, many CLM platforms already come with an array of apps from outside that you can use. However, every company has specific requirements, which is why software vendors will continue to develop compatible applications. It will be easier for professionals to use contract management software since they can integrate it with other platforms they’re comfortable with. A connected CLM solution that connects different systems to facilitate communication is popular by 2022 and possibly beyond.
Electronic Signatures Are Commoditized
The spread of the pandemic has led to several developments, including remote work and the introduction of electronic signatures and digital contracts. Although this digital transformation has made it easier to sign documents, it cannot eliminate the biggest issue in contracting workflows, the drafting of contracts. In the end, electronic signatures have become a commodity, and businesses are now looking for contract management software that covers all aspects of contract lifecycles, from contract drafting through e-signing.
In order to keep up with changing customer demands and keep up with the changing digital market demands, a continuous determination to improve processes. In the end, the best practices for contract management are always changing.