9th June 2020
9th June 2020
By Charles Dimov, VP of Marketing at ContractPodAi
Contracts represent each and every company’s past successes, current obligations, and future opportunities.
As businesses grow, building relationships with new suppliers, partners, customers, and employees, it is only in their best interest to recall valuable lessons learned. This is to create contracts that foster trust, mitigate risk, and maximize profitability. And this has never been more true than it is today - at this time of global crisis.
As businesses outgrow antiquated contract repositories and authoring tools, upgrading to using modern applications - those that combine artificial intelligence (AI) and contract management- is a critical next step. It accelerates the contract assembly process for sell-side contracts, fast-tracks buy-side contract reviews, and provides deep insights into a company’s performance across the organization.
Now, let’s look at three key benefits of AI-powered contract management in corporate legal and beyond.
Large corporate legal departments generally manage more than 10,000 contracts annually. On average, the cost to generate those contracts is around $6,900 USD each. Highly complex contracts, on the other hand, can cost tens of thousands of dollars to create, especially when agreements are:
Simply making contracts easier to read, less expensive to produce, and more standardized may improve the creation process. Yet, all of this may leave businesses exposed to unacceptable levels of risk.
So if simplifying and shortening contracts isn’t the answer, consider adopting AI as a way to augment your contract management staff. Humans, after all, tend to tire or lose focus whenever tasked with authoring custom contracts, searching historical agreements for acceptable terms, or enduring multiple rounds of changes.
The automation of contract and document assembly instead leads to the quicker creation of contracts. It also reduces contract production costs and ensures that agreement terms are vetted while protecting the company’s overall interests.
Let’s face it, the accelerated pace of business and increased regulatory requirements for business transparency are ratcheting up pressure on corporate legal to review rather complex contracts much quicker. Nevertheless, according to our recent Corporate Counsel Research survey and study, 62 percent of companies still use SharePoint, Excel, and email applications like Microsoft Outlook to manage contract data.
Just over a third of companies that we surveyed also said that their organizations view technology merely as a cost center. Nearly half told us that they haven’t evaluated a contract lifecycle management (CLM) solution in four years or longer. And almost 65 percent assumed that it would take at least a year to adopt and deploy an AI-powered CLM system. Quite clearly, they haven’t investigated quick deploy contract management solutions.
The fact is that using antiquated methods to manage contracts in the age of digital transformation causes undue CLM delays, extends negotiations, or impedes contract managers’ productivity. It can even expose your business to unnecessary risks. When contract terms cannot be compared against historical agreements easily and the wrong terms are used, or when clauses aren’t reviewed thoroughly enough.
The good news is that 48 percent of the corporate counsels that we interviewed said that they plan to adopt a CLM solution that includes artificial intelligence. And 50 percent cited contract risk mitigation as their most important mandate for 2020. Now, if your competitors, partners, or customers are among those we surveyed, ask yourself if you want your business to struggle while playing catch-up in the coming years.
Contract repositories mature and become stocked with tens of thousands of contracts. An AI engine like IBM Watson can parse contracts and their metadata quickly to understand:
The bottom line is that individual contracts are vital to a company’s future. So is efficient and effective contract management, particularly during periods of crisis. As such, fully understanding the historical trends of business’ contracts empowers executives to make data-driven decisions moving forward. Decisions like hiring new employees, modifying product or service offerings, or expanding into new markets. Interestingly, 74 percent of the contract legal professionals who we interviewed prioritized KPI metrics and advanced analytics in their own CLM evaluation.
So, have you hesitated to adopt an AI-enhanced contract management solution, for fear of extended adoption and deployment frames? Are your contract production costs climbing, or are you struggling to assemble documents and thoroughly review supplier agreement terms? Can you view contract performance data and make strategic decisions based on reliable insights?
See for yourself the difference that secure, intelligent, cloud-based contract management softwares can make in your corporate legal division and enterprise. Contact ContractPodAi today.
ContractPodAi empowers your team to assemble, send, sign and approve all kinds of contracts – from NDAs to sales contracts – anywhere, anytime and using any device.
Automated contact & document assembly
Highly configurable approval workflows
Central collaboration & negotiation
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