AI seems to be everywhere these days. Can your revenue generating paperwork benefit from AI as well?
Contracting is a common activity, but it is one that few companies do efficiently or effectively. In fact, it has been estimated that inefficient contracting causes firms to lose between 5% to 40% of value on a given deal, depending on circumstances. But recent technological developments like artificial intelligence (AI) are now helping companies overcome many of the challenges to contracting.
The main challenge firms face in contracting arises from the sheer number of contracts they must keep track of; these often lack uniformity and are difficult to organize, manage, and update. Most firms don’t have a database of all the information in their contracts – let alone an efficient way to extract all that data – so there’s no orderly and fast way to, for example, view complex outsourcing agreements or see how a certain clause is worded across different divisions. It requires a lot of manpower to draft, execute, and improve not only the contracts themselves, but also the contracting processes and the transactions these contracts govern.
If, for example, a large tech company finds itself with a huge volume of procurement contracts that all have varying renewal dates and renegotiation terms, it would require hundreds of hours and a team of contract managers to review and track of all this information to ensure that no renewal or opportunity is missed.
Our AI software – Zenith; a module of our Apogee Suite, however, can easily extract data and clarify the content of contracts. (For example, Zenith can quickly pull and organize the renewal dates and renegotiation terms from any number of contracts.) It can let companies review contracts more rapidly, organize and locate large amounts of contract data more easily, decrease the potential for contract disputes (and antagonistic contract negotiations), and increase the volume of contracts it is able to negotiate and execute.
I have seen that many companies use contract management software, and a smaller number of firms – mostly those with a high volume of routinized contracts – use more advanced software with AI capabilities. These firms have generally seen an increase in productivity and efficiency in their contracting.
The use of AI contracting software has the potential to improve how all firms contract – and it will do so in three ways: by changing the tools firms use to contract, influencing the content of contracts, and affecting the processes by which firms contract.
From data identification and extraction to risk visualization and increased accountability, there are many ways that artificial intelligence improves contract management. Rather than replace the duties of employed human beings, rendering the workforce obsolete, AI assists professionals by performing the many demands of their roles so that positions can be streamlined into more strategy-based ones, says Towards Data Science.
Artificial intelligence in contract management is designed to enable humans to focus on making educated, informed decisions and strategizing with a better understanding of contract risk. It helps professionals embrace smarter contract management by streamlining their data input, analysis,
reporting, and risk identification tasks through the use of automated data entry and risk assessment mapping and mitigation.
Our AI-based contract management software, Zenith, supplies the building-blocks that contract management professionals need to improve contract oversight, advanced understanding of contract risk, and proactive opportunity realization.
Let’s explore the ways in which Contract AI Software can help your organization.
With an AI-powered Contract Solution, businesses reduce spend and improve efficiencies in their procurement strategy. It is known that AI will continue playing a key role in cutting costs and reducing over-payment in procurement areas, especially when given access to “read” all agreements.
AI-enabled solutions such as Zenith helps to cut down administrative, dispute and operational costs by setting up timely alerts and notifications. In case of non-fulfillment of contractual obligations, it can help to trigger the enforcement of penalty clauses. It also drives business growth by tracking data from past experiences like up-sell or cross-sell opportunities, AI-based tools provide intelligent insight that helps users make more informed decisions in the future. Studies show this increases new revenue opportunities by up to 20%.
One of the main tasks of the legal team is to ensure that the company is signing off on good deals and mitigating risk for the company. When there’s a lack of visibility into every contract, during every stage of the contract lifecycle, exposure to liability and risk increases.
With legal contract automation and AI, legal teams can help ensure that the company is signing off on good deals, avoiding risks, and has full visibility into all contract obligations.
With Zenith Contract Intelligence, legal teams can confidently track obligations, manage opportunities, and mitigate risks.
Our contract management AI can provide further insight into contract risk with risk rating and mapping features. Contract risk profile ratings allow contract managers to visualize risk variables. Based on the tracking of risk, an AI-powered contract management software can provide a risk assessment matrix.
Manual tasks are taking legal and operations teams’ focus away from strategic, needle-moving business initiatives, and requiring them to focus on administrative work. Contract managers are often tasked with finding, sorting, extracting, and updating contract information and data post-signature, manually.
With contract AI, manual tasks that legal teams had to manage like redlining, approvals, reviewing contracts, and more, are now a thing of the past, freeing up the legal team’s time so they can focus on the bigger picture. The slow, costly process of manual data entry and information seeking is solved with contract AI because these tasks are automated. This automation now easily provides contract managers with the information they need in seconds instead of hours or even days.
Big corporations spend enormous resources on marketing to reach potential customers. Most small businesses lack the financial base to engage in big marketing. Small businesses need marketing to stand any chance of surviving. Most small businesses go all out to tell people about their products and services.
The benefits of marketing are enormous for all enterprises. Marketing helps you build a consistent customer base to keep your business afloat.
Another area of marketing that AI has revolutionized is email marketing. Email marketing has the highest return on investment for all marketing strategies. Before AI, many marketers committed a lot of errors in their marketing campaigns. One of these errors was not knowing the right time to install a particular strategy. For example, a premature sale to a potential customer may chase the prospect away.
With AI, marketers can program their campaigns to target potential customers only when they are ready to take a step.
The bottom line is that a database is useless without the data in it. Many contract management systems only provide tools that help with the creation of new contracts, but most companies already have large numbers of contracts that need to be inputted into the contract database. Zenith provides you with the tools and integrations to easily import or upload documents from a wide range of sources and automatically convert them to machine readable text, relating back to other agreements from the same counter party, all while extracting the contract’s crucial information and classifying the type of document.
Locating and pulling data from contracts to add into a contract management database takes time. A system that can do this automatically helps business, operations, finance, and legal professionals handle the contract process faster, more efficiently and, above all, more accurately.
Apogee Suite of NLP and AI tools made by 1000ml has helped Small and Medium Businesses in several industries, large Enterprises and Government Ministries gain an understanding of the Intelligence that exists within their documents, contracts, and generally, any content.
Our toolset – Apogee, Zenith and Mensa work together to allow for:
Check out our next webinar dates below to find out how 1000ml’s tool works with your organization’s systems to create opportunities for Robotic Process Automation (RPA) and automatic, self-learning data pipelines.