Precision in Every Phase: AI-Powered Contract Lifecycle Management
Enterprises should understand the importance of supply chain resilience; however, things get difficult to manage with the increased complexity of global supply chains. Of all the activities, managing supplier contracts is the most pressing challenge. It is essential to gain visibility into contracts to keep track of suppliers.
The traditional way of managing this process requires your team to spend most of the time tracking and performing contract operations. Around 99% of businesses need more technology to improve their contracting processes. Monitoring risk and managing supplier relationships has been challenging. Enterprises must adopt a digital approach, where contract lifecycle management (CLM) solutions can help throughout the contract lifecycle.
Why CLM Solution?
Today, most enterprises are embracing automated solutions to manage its contract lifecycle processes end-to-end. Reportedly, the usage of the CLM system is increasing year-on-year due to its immense benefits. It is proved that CLM solution can improve an organization’s ability to track contracts efficiently and streamline the enterprise contract management process.
Risk Management with AI-powered CLM
AI-powered contract management solution tracks business terms and payment schedules, essential in building a successful risk management program. AI and ML capabilities streamline and automate contract creation, negotiation, execution, and more, enabling tech-savvy teams to automate their workflows, templates, and review processes.
AI-powered CLM software offers various benefits, including:
Close Deals Faster
The CLM solution offers real-time visibility into the contract lifecycle process and facilitates document retrieval across all stages. This improves collaboration and promotes responsiveness within the legal team, enabling seamless coordination. Moreover, it offers access to all the parties involved, be they lawyers, entities, or customers.
Contract Management
Multiple contract formats require staff to spend days analyzing contract obligations and external factors. Inconsistent contract formats require you to study various formats and read the data to be fed into the system. Organizing contracts and making them work with multiple formats scattered across the system is complex.
Risk Mitigation
An AI-powered CLM solution can analyze risk areas, such as non-compliant or incomplete clauses. By eliminating supplier risks, businesses can protect themselves from costly legal errors and reputational damage.
Compliance
Complying with GDPR and CCPA ensures data privacy across the enterprise. CLM software can automate compliance and allow businesses to monitor performance. The solution provides a view of standard templates, reducing the risk of non-compliance and associated obligations.
Efficiency
CLM solution can help in the drafting and review process, ensuring teams that every clause remains accurate. This can speed up the entire process and reduce contract cycle times.
Supplier Performance
AI-powered CLM solution offers valuable insights into vendors. This information helps identify areas for improvement and negotiate better contracts, which improves supplier relationships.
Data Security
AI-powered systems can improve security and protect and monitor sensitive data appropriately. This minimizes data breaches and unauthorized access to the information, facilitating a secure environment.
Contract Management
Enterprises can manage supplier contracts and monitor compliance across the network. Supplier contracts can be efficiently managed, and renewals can be done on time, ensuring every agreement complies with the timelines.
Performance tracking
CLM can track performance in real time and enables organizations to monitor supplier performance and make data-driven decisions to optimize vendor relationships.
Risk Assessment
The built-in analytics feature enables businesses to analyze historical data and help procurement teams evaluate the risk of onboarding suppliers. This approach allows businesses to make informed supply decisions and implement risk mitigation strategies.
Data Extraction
Manually entering supplier data from contracts is time-consuming and cumbersome. AI can scan hundreds of contracts and extract critical data such as delivery deadlines, pricing, and quantity, including historical data. AI generates reports for each supplier, which helps you identify areas for improvement. ML algorithms extract structured data, making it quite easy to look for specific information.
Inefficient Processes
Traditional methods could be more efficient and help cross-functional collaboration. There is a lot of scope for process improvement and collaboration for an effective contract management process. Artificial intelligence can help streamline workflows, eliminate manual tasks, and foster collaboration across the platform. For instance, multiple stakeholders are required to review the contract, where they can review, make changes, add comments, and approve. Automating the contract lifecycle streamlines negotiations, minimizes project timelines, and saves time. Project collaboration involves back-and-forth, document versions, and slow response times that cause delays.
Contract Visibility
Contracts span multiple departments, tracking, managing, and accessing information. Contract management software makes all your contracts easily accessible and organized in a centralized platform. The solution comes with advanced search capabilities to make it easier to find documents.
Version Control
Tracking versions is a critical challenge for most enterprises. When there are hundreds of documents, tracking versions, amendments, and revisions within an organization is extremely difficult.
The contract solution simplifies version control and offers a full trail of changes, revisions, and amendments made to the document. You can always view previous versions and track the changes made to the current version, thus ensuring transparency in version control. Versions are created when someone opens, edits, and closes a document, and versions are generated for changes made and accepted.
An AI-powered contract solution offers version control that ensures seamless collaboration across diverse teams. With version control, you access the contract history, including versions, revisions, and comments made throughout the negotiation process. All stakeholders can collaborate in real time, viewing the latest version. Moreover, a comprehensive audit trail is maintained to ensure audit readiness.
Scalable
As your business grows, the volume of contracts also increases. Manually managing contracts will become complex and lead to inefficiencies and constraints. AI can help manage a huge volume of contracts while optimizing performance and without compromising efficiency.
Predictive Analytics
AI offers invaluable insights into contracts and leverages historical data to predict market trends. It can anticipate risk, suggest improvements, and help businesses create contracts complying with business objectives.
AI for Smart Contracts
Smart contracts eliminate the need for manual insight over paperwork. Let us check how artificial intelligence streamlines the innovative contracting processes:
Execution
AI-powered solutions execute contracts automatically when pre-defined conditions are met. This eliminates manual errors and ensures contractual agreements are done accurately. Organizations can benefit from increased efficiency and low error rates.
Data Validation
AI can validate the data within smart contracts. This includes tracking the goods and their status and ensuring compliance with contract terms.
Natural Language Processing (NLP)
NLP streamlines the contract creation process, enabling stakeholders to draft contracts in plain language, which AI can translate into executable code. Contracts are more accessible and less reliant on technical terms.
Security
AI secures smart contracts by identifying potential vulnerabilities and threats. The solution offers role-based access and sets restrictions on documents. Users with appropriate permissions are allowed to read and write the documents. All changes made can be tracked through a detailed audit trail, which can help detect unauthorized access and improve security.
The Conclusion
Artificial intelligence can help streamline the contract management landscape, and organizations can continue to harness the power of advanced technologies to stay competitive, efficient, and agile in today’s landscape. The technology can revolutionize contract management by streamlining routine tasks and minimizing human errors. Choose a CLM solution that allows for seamless integration with existing systems, making it easy to perform cross-functional operations.
