Post-COVID revenue pressures have brought in a great deal of accountability in the buy-in process for legal tools. For in-house leaders, purchasing tools is not just a question of expediting processes, but of - if the tool directly contributes to the bottom line. That is the distinction between contracting tools and intelligent contract management platforms.
What is Intelligent Contract Management?
In simpler terms, while general contract management does what it is supposed to do, intelligent contract management adapts, learns, and grows - depending on usage and counters challenges far more proactively.
With machine learning at its core, intelligent contract management has a diverse range of applications - can perform microscopic audits, and can integrate far more seamlessly with other tools in your organization.
This software enables organizations to manage contract compliance at scale, while recognizing and minimizing risk in real-time by triggering actions based on predefined parameters. It is also instrumental in improving the overall visibility of contracts, allowing teams to access pertinent information easily as well as generate actionable insights from the contract repository.
So what are some results we can expect from intelligent contract management systems?
You don’t have to choose between speed and accuracy
For legal teams and businesses - contracts are not only complex assets, they are also the guardians of business interests, overseeing every dollar transaction for the business. Even the slightest errors in any could lead to sizeable losses.
In such cases, the speed proposition is not enough. While traditional contracting tools standardize templates and generate new contracts off those precedents, they still require manual reviews and edits if conditions within the contract change through the lifecycle of the contract. This can lead to instances of oversight and trigger contractual risks.
On the other hand, contract intelligence software tools leverage AI to analyze any change in context through the process, and can automatically readjust themselves to the compliance standards of the organization.
For example - if your company requires you to add a specific clause for every deal with companies beyond your local jurisdiction, an AI-led contract management tool would automatically ascertain the jurisdiction discord and insert the relevant clause.
This bypasses the need for manual micro-updates for every contract and can lead to review-free contracting cycles while producing error-free contracts faster.
Also read: 8 Top Contract Management Software Platforms
Intelligent Contract Management Means Intelligent Contracts
With better systems, contracts stop being static records of information. The information is processed and becomes actionable insights. Leveraging contract intelligence can uncover your relationships with your customers by highlighting your most engaged or longest customers to help you act towards building a referral chain, thereby generating further revenue.
Another potential application is flagging off clauses or parts of any contracts that are most contested and corrected, to help you assess your company’s legal templates. This would in turn save hours in negotiation and even stop revenue bleeding.
Perhaps the biggest contribution in terms of actionable contract intelligence would be to identify and flag off contracts that would harm lifetime value (LTV) from paying customers.
Improve in real-time
Opting into an intelligent contract management system gives you the power to identify common gaps in your compliance standards and lets you address them proactively. As and when a contract is generated, AI-led contract management platforms track for legal inconsistencies at the back-end and provide corrective suggestions that you can accept or decline.
With time and your inputs on suggestions, the AI acquires a better understanding of your compliance guidelines and can automatically readjust to accommodate your needs. This negates the need to onboard and train junior lawyers to check your contracts, even as the contract volume increases across the company. This means spending less time on repetitive tasks and more time training to be future leaders.
Uncover value through analytics and data-proficiency
A retrograde analysis of contracts can not only uncover a wealth of information surrounding your agreements, but it can also help identify and work around operational inefficiencies, and minimize productivity leakage. Intelligent contract analytics also provides for greater visibility into a wide array of metrics. This includes - cycle times, risks, general deviations, and other general business turnaround times.
For example - continuous monitoring of sales contracts can help you keep a check on your typical sales cycle durations and identify delays. For larger companies with teams across the globe, a combination of sales data can also help them identify best performers or team-specific challenges.
This helps you to prioritize tasks, identify caveats, and optimize your processes to drive greater business value.
On the other hand, AI-backed contract intelligence software also directly impacts the performance of the legal team. It helps in-house lawyers actively create custom reports during their periodic performance assessments, and demystify the legal function to resonate with other business teams. AI-powered contract analytics makes data visualization simpler and helps display the legal team’s impact on the overall business.
SpotDraft’s AI-powered end-to-end contract automation system helps put the entire contract workflow on autopilot, identify and address gaps, and uncover a wealth of insights across previous contracts to support your team.