As we navigate 2022, it is clear that contract artificial intelligence – or contract AI – is sharpening contract management software practices and broader legal operations in significant ways. How exactly can your organization leverage contract intelligence to automate and streamline contract lifecycle management? Read on to learn five ways contract AI is positively transforming contract lifecycle management operations in 2022.
Contract AI – or contract artificial intelligence – is a type of AI that helps those managing contracts automate contract data management, contract risk management, contract counterparty management, and more. Contract AI is at the forefront of legal operations technology, helping organizations streamline contract lifecycles and focus more on opportunity realization than more tedious aspects of contract operations.
AI-Based Contract Management
AI-based contract management is a modern contract lifecycle management strategy that involves leveraging contract artificial intelligence for various mission-critical processes for optimal convenience and efficiency. Contract artificial intelligence can streamline agreement data management, contract data extraction, contract clause oversight, intelligent contract workflow automation, contract risk management, and much more. Let’s examine five contract AI methods for the job.
#1 – Contract AI for Contract Data Management
Users of contract AI can select specific data points and configure system rules based on contract types within contract lifecycle management software. This is helpful because data can be consolidated and easily navigable – allowing CLM software users to establish rules regarding dates, locations, monetary values, personally identifiable information, payment card information, and other specific subsets of key data for a particular contract. After this is configured, these processes can be streamlined and automated with contract intelligence, reducing the time spent on tedious data import analysis that can be performed by contract intelligence. As such, essential contract management resources can spend more time making data-driven decisions for improved contract lifecycle management.
#2 – Contract AI for Clause, Term, & Contract Data Extraction
Leading contract intelligence is pivotal in data extraction functionality within contract lifecycle management software. Contract data extraction tools can also be beneficial to organizations that manage legacy contracts.
Suppose an organization possesses legacy agreements that need importing into contract lifecycle management software but does not have a structured data spreadsheet to engage in a bulk data import. In that case, this data can be systematically extracted so that organizations do not need to key in individual contract data fields manually. As such, contract clauses, contract data, and contract terms can be easily imported in a streamlined manner providing the visibility and ease of use needed to search, report, compare, and classify contracts, contract data, risk, and more.
#3 – Contract AI for Intelligent Contract Workflow Automation
Contract administrators should take note of the time frame in which individual tasks are completed and which tasks are causing delays and prolonging cycle times. This can help minimize wasted time and resources resulting from inefficient contract workflows.
Reliable, trusted, and AI-based contract management software can provide organizations with functionality for intelligent workflow automation that supports task performance monitoring. Contract administrators can identify how long it takes employees to complete assigned tasks, promoting accountability. If a task is not being completed on time, tasks can be quickly escalated to promote timeliness and keep contract lifecycle management moving efficiently.
Along with virtually ensuring that task deadlines are being met, contract lifecycle management software equipped with contract intelligence can help organizations efficiently keep tabs on the number of days a given contract remains in each stage or status of the contract lifecycle. Visibility can be drastically increased with visually engaging, easy-to-understand workflow analytics and reports representations. Consequently, contract lifecycle bottlenecks can be easily identified to eliminate inefficient contract management practices.
With newfound contract lifecycle management insight, contract administrators can reassign roles, rotate task assignments, escalate tasks, and more – evolving their contract lifecycle management processes based on empirically-proven contract analytics.
Considering investing in contract workflow automation, but not quite ready to invest in optimal oversight? No problem; you can get started with a complimentary contract management tracker in the meantime.
#4 – Contract AI To Assess Employee Accountability
Steadfast contract risk management is crucial for successful contract lifecycle management. AI-based contract management software can make risk assessment, risk analysis, and risk mitigation efforts more efficient and transparent. Contract intelligence can encourage robust risk mitigation by allowing users to significantly leverage features and functionality made available to them in their contract management software platform, such as tracking of counterparties, employees, workflow tasks, records, and more.
To analyze the use of these tools, a risk score can be provided to users based on their usage of the available tools. This feature can be used by contract administrators to hold employees accountable for how fastidiously and attentively they’re utilizing the risk prevention tools at their disposal.
Let’s say, for example, that out of all of the tools and functionality available to him for risk management, John’s organization only uses 35% of them – according to the tracked usage of the tools. In this case, users are not even leveraging half of their contract management software’s risk response tools. As a contract management software administrator, John is subsequently prompted to improve risk management practices with specified insight into what his organization’s risk management process is lacking.
Let’s continue with our example. Suppose John’s organization’s intelligent contract management software reveals that the team is not putting enough time into tracking contract approval status. In that case, the organization can adjust how it tracks approvals accordingly. With mission-critical insights, the team can allocate the necessary resources to mitigate risks associated with counterparty activity during approvals. As such, with a contract software solution that offers contract intelligence to establish checks and balances, risk management practices can be improved – and risk can be significantly reduced, streamlining risk prevention processes and minimizing losses.
#5 – Contract AI for Advanced Risk Assessment
Advanced contract intelligence can provide further insight into contract risk assessment with risk rating and mapping features. Contract risk profile ratings can allow contract administrators and users to visualize risk variables. Based upon the tracking of contract risk, a contract management software platform built on contract intelligence can provide a risk assessment matrix for visually engaging risk analysis.
Not only can contract management teams view risk probability patterns for events within contracts, but they can also view the exposure that results from contract risk variables. Insight into potential detrimental consequences of a contract management event with potential risk can help contract administrators decide how to proceed with a specific contract. Visualizing the results of an action associated with contract risk can inherently reduce risk and allow contract administrators to move forward with risk mitigation decisions faster and more efficiently.
Are you interested in present the benefits of implementing AI-based contract management software to key decision-makers in your organization? To make an irresistible case for automating legal contracting processes in 2022, click here.
Tackle Legal Contracting Processes in 2022 With AI-based CLM Software
Now you know of the many contract intelligence tools you can use during contract lifecycle management to positively revolutionize processes during the age of legal operations digital transformation in 2022. But these are just a scratch at the surface at all you can do with an AI-based contract management software platform.
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