Whether you are dealing with long-term contracts or short-term contracts, the goal of your services is to maintain your client’s data and keep track of all important dates that matter! Contract management software helps you compile complex data into one centralized solution. However, remembering every client’s data can be hectic and not actually workable for long-term business goals.
The main functions of contract management include simplifying documentation, contract renewal reminders, contract monitoring, contract submission, and more. What if you do not remember that a client’s contract will end after 6 years and requires a contract renewal this year? Feeling stuck? Not yet if AI is here.
The evolution of AI and the rise of AI implementation in every field have turned business operations from manual to automated. Similarly, implementing AI in contract management software shifts manual functions into automated ones via modern technologies, including generative AI, machine learning, predictive analysis, etc.
If you want to know how AI contract management shapes the industry, this blog is for you! Let’s look in-depth at the AI transformation in contract management software.
What is AI Contract Management Software?
AI contract management software allows users to manage client contract data in one centralized software. You can automate contract documentation editing, contract renewal reminders, identify risk, predict contract due dates, and other tasks related to clients’ contract attributes.
AI plays a vital role in managing manual tasks with its advanced capabilities, such as sending reminders, making edits in documentation, contract executions, and providing insightful data visualization.
However, contract management consists of 5 major areas that require detailed attention, or your client can bear the hefty cost of contract discontinuation.
- Drafting: This phase refers to the creation of terms and conditions, defining the work of scope by keeping standards and compliance regularities in mind.
- Execution: Create a final draft, review it, endorse it, and then send it to the relevant parties to execute the contract.
- Monitoring: It helps to analyze the contract progress, identify risks, and settle the dispute if it occurs by taking corrective measures.
- Contract Renewal: This is the time when a contract needs to be revived, extended, and amended. If necessary, the contract can be terminated for specific terms and conditions.
AI & Contract Management Software From The Core
AI has changed the contract management process by automating data corrections, providing real-time information, sending automated notifications, and more. Let’s study how all these happen with AI.
AI and authoring is the best combination we have ever seen after the launch of ChatGPT. Artificial Intelligence is performing outstanding when it comes to providing in-depth information to write contract clauses and the latest updates. It ultimately reduces human errors. Using predictive analysis and generative AI, users can create creative contract agreements and modify the existing ones with the latest information.
Natural language processing (NLP) can identify specific clauses related to renewal and termination. Moreover, it can integrate with the latest technology, i.e., GPT, to automate contract agreement creation. The pre-built template with identical writing tones and different styles can also help consume less time and resources. Contract authoring can also harness the power of AI by educating it on the suitable terms and conditions clauses. With this, users just need to input their desired contract attributes to get an instant written contract.
Contract analysis enables us to build transparency throughout the contract management process. Moreover, it infuses AI and data analytics into contract data to make a perfect picture of areas of improvement. Contract analytics also enable us to streamline the flow of a large volume of data to pin down trends and necessary information to make informed decisions.
In contract analytics, AI works in different aspects, such as data extraction that allows users to fetch data from the contract by tagging them with other metatags like contract type, expiration date, basic details, and payment terms. These extracted data can easily be exported and visualized in simplified dashboards or in the form of downloadable reports.
In fact, AI can assess the financial, legal, and operational risks of contract building or renewal. Moreover, contract analytics allows you to track contract performance by monitoring contract details, scrutinizing contract value, and extending the recommence and reviving contract renewal process.
Contract Renewal & Terminations
Leveraging AI for contract renewal and terminations streamlines the contract management process, offering enhanced efficiency, accuracy, and strategic decision-making. Furthermore, AI-driven systems can automatically extract and analyze contract data, send timely renewal notifications, and provide insights into the best course of action based on historical and predefined criteria.
They simplify contract termination procedures, ensure compliance with legal obligations, and facilitate risk assessment. Additionally, AI-powered analytics and automation reduce administrative burdens, improving overall contract management efficiency while minimizing the risk of errors and missed deadlines.
Integrations with ERP and CRM systems further enhance data flow and support strategic decision-making. Overall, AI revolutionizes contract renewal and termination processes, making them more cost-effective and allowing organizations to make informed, data-driven choices.
How Can AI Solely Reliable For Contract Renewal Process?
Using AI for contract renewal and terminations can significantly streamline and improve these processes, making them more efficient, accurate, and cost-effective. Here’s how AI can be applied to contract management software in the context of renewal and termination:
AI can automatically extract and analyze data from existing contracts, including key terms, deadlines, and obligations.
AI can monitor contract expiration dates and send automated notifications to the relevant parties before the renewal deadline. It can suggest whether to renew or terminate a contract based on predefined criteria and historical data.
AI can help identify termination clauses and conditions in contracts. It can guide the steps and requirements for contract termination, ensuring compliance with legal and contractual obligations.
Contract Review and Compliance
AI can assist in reviewing contracts to ensure that renewal and termination terms are adhered to. In fact, it can flag any deviations from the agreed-upon procedures or conditions.
AI-powered contract management software can support the negotiation of renewal terms by suggesting favorable changes based on historical data and industry benchmarks. In addition, they can provide insights into alternative clauses and terms that could be negotiated.
AI can analyze historical contract data to identify trends and patterns. It helps organizations make data-driven decisions regarding contract renewals and terminations. However, it can assist in predicting the likely outcomes of different actions.
AI can automate routine tasks associated with contract renewal and termination. It includes generating renewal agreements, sending notifications, and updating records. This reduces the need for manual data entry and administrative work.
AI can assess the financial, legal, and operational risks of contract termination or renewal.
It can provide risk mitigation strategies and recommendations.
AI can organize and categorize contract documents, making it easier to access and retrieve information when needed for renewal or termination.
Audit Trail and Compliance Reporting
AI can maintain an audit trail of all contract-related activities and changes. It can generate compliance reports for internal and external stakeholders.
The fastest-growing sensation of AI in contract management software is highly appreciated in multiple industries like law and ordinance, real estate, healthcare, etc. Companies like MMC Global provide high-end contract renewal and contract management software using modern technologies like AI and its subsets like predictive analysis, GPT, generative AI, machine learning, etc.
However, if you want to build custom AI contract renewal software, you are at the right place. We at MMC Global own exceptional AI engineers to develop AI-based software efficiently. Let’s build a one-in-all contract management solution that centralizes your business operations effectively.