There are several ways organizations deal with the contracting process. Few manage it with word-based drafting and redlining coupled with storing in repositories like Drop Box or SharePoint and some deploy automated contract management systems for this process that also include collaboration. Some systems even enable you to digitally sign the contracts
However the most important ask for an organization with respect to contract management is to have instant visibility across their contract key terms to perform risk mitigation, understand which of their contracts deviate from standard terms, have control on third party contracts, get actionable insights across the contracts.
So just having a repository of contracts or ability to draft, redline and execute the contracts is not going to be of any good use to an organization until they take advantage of technologies like Artificial Intelligence and Machine Learning.
Let us try and understand the most important and key ingredients that any contract automation software is expected to have
Central Contract Repository
AI based solutions have ready in-built adapters to most document repositories to pull data and further use classification techniques to segregate the documents into different types. Having a central contract repository is the most important pillar for any organization to achieve proper digital transformation for their contract management process.
OCR Process to handle scanned and 3rd party contracts
Most organizations will have some amount of scanned executed contracts in spite of using any automated contract management systems and it is of high importance to be able to bring these scanned contracts into a digital repository to be able to derive actionable insights on top of these contracts. Apart from scanned contracts there are numerous situations where organizations are expected to accept third party paper which do not follow the organization’s standard templates. In these cases, OCR processes can automatically convert images, scanned documents into digital text.
Key Metadata extraction from Contracts
AI and ML powered extraction engine with underlying NLP and deep learning techniques can extract key metadata from contracts and other similar documents like service agreements, non-disclosure agreements, statement of works, rental lease agreements, employee agreements and so on. The Artificial intelligence based contract analysis software’s work on training the ML Models to be able to understand different type of agreements, analyse patterns and further be able to extract the configured metadata irrespective of where such data lies within the contracts.
Comprehensive search across contracts
Contracts play a different role for different types of department users within an organization. For Sales departments it is important to know which of the customers have longer payment cycles, which customer contracts are getting renewed in the next 30-60-90 days and so on. For Legal departments it helps in knowing the risks and obligations. For procurement departments, it is important to know the payment terms across vendors and contracts. Artificial Intelligence powered contract analytics platforms come with Metadata, Meta field and Semantic search capabilities that can help users to find necessary key information and related information across contracts
Contract review automation
Organizations depend on their internal legal departments or employ external legal counsel to review and vet all the contracts being signed with customers, vendors and suppliers. The traditional way of reviewing any contract is to skim through volumes of papers across the contracts to understand the possible risks, obligations and deviations with respect to the standard templates. This is not only highly time consuming but also very cost intensive with delays causing potential risks to the organization. Combination of AI, ML and NLP within contract analytics solutions can help compare executed contracts and clauses with standard templates and variance analysis in seconds
Top Management of any organization need a visual contract analytics dashboard showcasing key contract data to drive additional insights. Machine learning based contract analytics software’s Provide readily available reports and dashboards on contract data to avoid possible risks and obligations along with the ability to provide custom dashboards based on organization specific needs.
If you think you have a situation of not having any contract management system or an inefficient contract management process that does not use the power of Artificial intelligence and Machine learning, we can help you bridge the gap and improve the overall efficiency and speed of contract management