With the number of organizations implementing contract lifecycle management tools increasing, there are still some major concerns and hesitations related to ROI, business impact, and user adoption. Different factors like user experience, preliminary analysis, lack of manual effort, etc., contribute to this fear.
However, Artificial Intelligence has played an active role in the next-gen CLM software, thus helping organizations overcome the hurdles. So what impact does Artificial Intelligence (AI) have on contract lifecycle management?
AI Speeds up the Tagging Process
Handling and uploading hundreds of legal documents to a contract management system can be a tedious task. Tagging each clause in a document manually before processing a contract can be a course quite demanding. However, CLM software powered by AI and machine learning algorithms can make the process easier by identifying the name of the clauses based on the content.
This trained model can automatically apply tags to the documents once you upload them to the contract lifecycle management software.
Large Datasets and Their Optimization
Large datasets are one of the prime areas where AI makes a big impact in contract lifecycle management. Using machine learning and AI to analyze the big data will be efficient compared to humans manually attempting the same tasks.
When it comes to large datasets, machine learning can adeptly recognize patterns, identify anomalies, and optimize the process. Even though humans may go by the power of instincts to recognize patterns and correlations, computers can interrogate each dataset without any preset notions and derive the objective relationships.
This helps uncover unexpected issues and correlations, and you can also keep an eye on the patterns over time to identify mishaps and optimize them.
AI’s Impact on Contract Authoring
AI-powered CLM software helps with intelligent contract creation. The software does this by automatically recognizing the contracts and arranging them in the contract library. The historical contracts are used to identify the patterns, which are then approved into suitable preset key terms and contract clauses. And all this is possible only because of machine learning algorithms.
With AI’s impact on contract authoring, the contract lifecycle management process can get more efficient and facile.
Reduces Compliance Risks
Managing risk is one of the significant objectives of contract lifecycle management systems. The main terms of risk management are ensuring that you and the contracted parties abide by all signed terms all through the contract lifecycle.
Identifying every information and data that you need to screen for each contract on the deck can be an uphill battle by itself. Especially if the related dates you are looking for are not tracked or unknown, the task can be much more challenging, and there are chances of you even missing the deadline.
However, AI’s contribution to the CLM solutions in automated tagging helps reduce this burden. Eventually, any risk of deviating from compliance policies continues to remain out of the picture.
In the last six years alone, AI has been in continuous action and the center of attention across a plethora of fields and industries. CLM is one such process that has been benefitting widely because of AI’s power. Get the right tool now to bask in its features.