In today's fast-paced business environment, efficient contract management is more critical than ever. Effective contracts management is a key to ensuring compliance, operational continuity, and risk mitigation. However, managing these contracts, can be complex and time-consuming. Generative AI (GenAI) is emerging as a game-changer, automating tasks, mitigating risks, and offering valuable insights that enable companies to manage agreements more efficiently.
The Dawn of Generative AI in Contract Management
GenAI is transforming how contracts are created and managed over the entire lifecycle. By analyzing vast datasets of existing agreements, GenAI can generate a summary view of a contract’s history, enabling any new person to quickly familiarize themselves with the entire lifecycle of that contract. It can generate legally compliant and customized contract drafts in minutes, significantly reducing errors and ensuring compliance. It can even streamline contract creation, automate contract reviews, and enhance accuracy in the contracting activities.
Through its proprietary GenAI engines, Evalueserve can quickly identify risks in non-compliant clauses, suggest alternatives, and analyze past agreements to provide negotiators with valuable insights for faster resolutions and favourable terms. This GenAI tool accelerates contract review cycles by flagging non-compliant clauses intelligently. Moreover, it improves contract compliance and quality by minimizing errors and risks, ensuring alignment with the parties' goals and expectations.
GenAI doesn't stop at creation and review; it also excels at risk detection and compliance. Once integrated with the Client’s CLM, Evalueserve’s GenAI suit swiftly scans agreements to identify hidden risks, ambiguous clauses, and potential non-compliance issues, allowing companies to address these proactively. By flagging deviations, and allowing redlining within the CLM system, it improves the practitioners productivity significantly, providing 50-80% faster turnaround times with equal or better accuracy. By unlocking hidden trends and patterns through the analysis of vast contract data, GenAI suite also provides valuable insights that enable informed decision-making and optimized agreements. The result is enhanced risk management, where potential pitfalls are identified early, preventing disputes and maintaining regulatory compliance. Across different use cases, the GenAI engine for contract management is able to render an average preliminary efficiency gains of over 6,000 hours annually per key region for a typical global F500 organization.
Agentic AI: Scaling and Empowering Contract Management
While GenAI focuses on content creation and analysis, Agentic AI takes a more autonomous role, managing business processes and handling complex tasks independently. Agentic AI services enable teams to scale operations and achieve quicker turnaround times.
Agentic AI in contract management can be used in several ways, as listed below:
- Custom AI Stacks: These involve building tailored AI solutions to meet an organization's specific needs, offering high flexibility but demanding significant technical expertise.
- AI Point Solutions: Standalone AI tools address specific aspects of contract management, easily integrating into existing workflows and requiring less technical expertise.
- Comprehensive Platforms: These offer streamlined solutions by leveraging diverse generative AI models to automate tasks and provide actionable insights across the entire contract lifecycle.
By deploying these Agentic AI solutions, businesses can enhance the output quality and accuracy in contracts management, while reducing the need for manual labor, leading to significant cost savings.
For instance, Evalueserve’s agentic negotiation toolkit enables the users to evaluate should-cost of any products/ services in a matter of minutes, further allowing them to identify negotiation levers, and execute data backed negotiation with suppliers.
Continuous enhancements in Agentic AI is set to further revolutionize contracts management space as the GenAI models are becoming increasingly adept at understanding and generating complex legal/ contracting language with unparalleled accuracy. Moreover, the potential for hyper-personalized contracts tailored to individual needs and circumstances is on the horizon. These trends are likely to evolve into newer possibilities in the contracts management, through:
- Predictive Contract Performance and Risk Assessment: Agentic AI tools can enable analysis of massive datasets to predict potential outcomes, allowing businesses to mitigate risks and optimize their contract portfolio proactively.
- AI-Powered Contract Lifecycle Management (CLM): The complete contract lifecycle gets streamlined including version control, flagging of changes in subsequent versions, by Agentic AI-powered CLM platforms, resulting in faster turnaround times and greater efficiency.
- Integration with Other Business Systems: Agentic AI can seamlessly function integrating with other business systems, creating a holistic view of contract and operations data and enabling informed business decision making.
Agentic AI has started transforming contract management, offering organizations unprecedented opportunities to improve efficiency, mitigate risks, and enhance overall business performance. Several organizations have begun experimenting with Agentic AI. Such companies are set to be ahead of the curve, and reap significant benefits through streamlined processes, and efficient and leaner ways of working.
