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One quick look at tech news makes one thing clear: artificial intelligence is the topic of the year - maybe the topic of the decade. And for good reason, as Gartner predicts the business value created by AI will reach $3.9T in 2022. That’s ‘T’ as in trillion.
The business world is investing heavily in AI and machine learning technology so they will be able to keep pace with their machine-enabled competitors. AI is poised to fundamentally change marketing and sales as well as more central commercial processes like contract management, procurement, supplier management, and more.
Agiloft CEO Colin Earl recently wrote an article in Information Management titled “AI and automation bring dramatic changes to contract negotiations, management.” After reading that article we’d like to highlight four ways AI is changing contract management.
1. Voice Activated Technology
With Alexa entering the enterprise, we will begin to see voice assistants as the primary interface for business software. This starts with routine tasks like asking Alexa to list all active contracts up for renewal in the next three months. This will lead to more complex tasks like asking Alexa to explain the differences between your NDA and that of a potential partner. While data security and the nuances of business language are clear challenges, we have seen this technology jump in leaps and bounds over the last five years. As it continues to mature, voice assistants will likely be commonplace in offices five years from now.
2. AI Contract Negotiation
By AI contract negotiation we don’t mean computers negotiating contracts without human involvement. But right now, AI can analyze contracts and make sure company policies are being followed as well as point out any discrepancies that need attention. With trained machine learning and AI models, businesses can even automate pricing negotiations based on supply and demand. The availability of airplane seats is a great example of this and we’ll likely see more of it in retail and procurement.
3. AI Contract Generation
Today’s contract lifecycle management (CLM) systems store standard clauses for use in assembling contracts. With the application of AI, contract creation can be completely automated when a contract manager flags an email. The AI then uses natural language processing to pull the language from the email, interpret its context and meaning, and then populate the contract with appropriate contract clauses. The contract manager would then review and send the contract on to its final approver.
4. AI Risk Scoring
Even now, CLM systems can scan contracts and flag language that may pose risks to the organization. With AI risk scoring, it will go a step further to suggest alternative clauses that reduce the risk score and safeguard the organization. This can save a legal team or contract manager value time in reviewing and editing sensitive contracts, giving them the time to focus on more complex tasks and negotiations.
The immediate benefits of AI in contract management are streamlined operations and greater efficiency, but when paired with a highly configurable no-code platform like Agiloft, businesses can quickly adapt their software as business needs change as well as expand their system to include other key commercial processes.