How Ai-Powered Contract Management Is Becoming An Industry Benchmark
Industry Benchmark: The digital contracting space is experiencing a major renaissance, buoyed by several factors.
Among these factors are improved operational efficiency, a comprehensive audit trail & the creation of a single source of truth. Businesses of any size & occupying any segment all extensively rely on contracts for their day-to-day operations. Contracts, in this sense, are the cornerstones on which business relationships are built.
Despite the importance of contracts, most businesses still rely on paper-based documentation – surveys indicate that more than 90% of business information still exists on paper. This leads to severe drawbacks.
According to further research, nearly 20% of business documents stored in paper form are lost or misplaced, and paper documents account for 83% of total productivity loss among workers. Additionally, knowledge workers spend almost half their time simply searching for documents & take 5-10 days to see a contract through to completion.
Smart contract management software offers a quick fix for these problems by enabling businesses to draft contracts instantly using templates, negotiate clauses online, sign contracts remotely via eSignatures & store all contracts centrally for easy search & retrieval.
Apart from these features, several trends have come together to turn smart contract lifecycle management (CLM) into a benchmark for enterprises.
6 Trends Pushing Smart Contracts Into The Mainstream
1. AI Is Enabling Businesses To Gain Critical Insights From Contracts
Intelligent contract software integrates with Artificial Intelligence (AI) techniques to enable decision-makers to glean key insights from contracts & contract metrics. Top-of-the-shelf contract software examines several contract aspects, including clauses used, time for execution & associated risk, to provide essential insights.
Smart contract software can also suggest clauses using Natural Language Processing (NLP) capabilities, estimate turnaround times & contract risk using data analytics, and enable overall risk mitigation. 68% of legal teams say that analyzing contracts has been the most significant advantage afforded by CLM software.
2. Digital Contracts Are Improving Customer Experience
Smart CLM enables all stakeholders, including executives, employees, customers, or vendors, to easily view, sign & download contracts. Reverting to paper-based contracts is often a source of friction, as printing out & physically signing contracts can be frustrating.
Streamlining customer journeys using smart contracts allows businesses to provide customers with a simple & accessible way to do business with them.
3. Centralized Knowledge Is Improving Decision Making
Leveraging paper-based documentation usually means that knowledge is siloed, disparate & difficult to access. Storing knowledge this way hobbles the ability of executives to make decisions based on this knowledge, as information stored in paper form is not amenable to analytics or easy re-organization.
By centralizing all knowledge using CLM software, businesses can easily access critical data to improve their decision-making abilities. Additionally, having a single source of knowledge enables businesses to learn from data holistically, thereby improving the quality of actionable insights gained.
4. Green Business Thinking Is Driving Interest In Paper-Free Tech
According to reports, nearly 73% of companies confirmed board-level oversight of climate risk. 215 of the world’s largest corporations have also recognized climate change as a serious threat to business.
Businesses are starting to think green & smart contracts are enabling massive reductions in carbon footprints. Smart CLM digitizes contracts & contract lifecycles, enabling businesses to carry out operations with zero paper. If a business used digital contracts for two decades, it could save 2 billion trees in the process.
5. End-To-End Automation Is Improving Business Efficiency
Due to the sheer number of manual activities involved in the contract lifecycle, modern CLM software no longer stops at automating mere steps in the contracting process.
Contract lifecycles are now automated from end-to-end using a blend of AI & digital techniques. Such a CLM system enables the digital transfer of bulk data to create the appropriate contract clauses, easy integration with record-keeping systems, hassle-free collaboration & significant lowering of risk due to more robust security protocols.
This end-to-end automation is enabling businesses more out of their CLM systems.
6. Digital Transformation Is Accelerating
Finally, digital transformation has sped up due to several factors, chief of which is an increased emphasis on socially-distanced digital technology due to the COVID-19 pandemic.
eSignatures are more popular than ever before, and CLM software similarly is experiencing renewed interest due to the improved efficiency it affords for businesses while maintaining the new digital status quo.
How Businesses Can Leverage Smart Contract Management
Smart CLM software can be leveraged by businesses to complete every step of the contract lifecycle digitally.
Contract drafting is completed via templates or AI-assisted clause suggestions, negotiations are concluded online using comments & suggestions, and contracts are approved at multiple levels digitally.
Following these steps, eStamp integrations enable instant contract legalization, and eSignatures are used to execute contracts remotely.
Finally, contracts are stored in a central repository for easy retrieval, and intelligent algorithms get to work analyzing contract performance & content to provide critical insights for future contracts.
What Businesses Can Expect From Smart Contracts
Smart CLM software leverages several cutting-edge techniques to provide businesses with numerous benefits & competitive advantages.
- Significantly lower contract expenses – According to estimates, businesses save between 60-85% of expenses by taking their contracts digital.
- Faster contract execution & improved efficiency – Smart CLM enables businesses to execute contracts within 30-37 minutes instead of the ten days it takes to get signatures on a paper contract.
- Fewer misplaced documents & easy searches – Smart contracts improve error rates by 92% & result in 90% fewer lost documents; search times are also slashed by a whopping 99.8%.
- Improved audit efficiency & strong compliance – Leveraging smart CLM software improves audit efficiency by up to 60%, enabling easy compliance with regulations.
- Increased customer loyalty & lower carbon footprint – Businesses stand to increase customer loyalty by nearly 500% by providing customers with digital contract journeys. The green benefits of CLM are also massive, as previously mentioned.
Smart contract management offers businesses a wealth of valuable and now necessary features and enables enterprises to go paper-free.
The current trends responsible for bringing CLM software into the limelight are holding firm, making CLM an industry benchmark by driving operational efficiency, lowering documentation costs, and shifting towards a digital business ecosystem.
About the Author
Krupesh Bhat (Founder of SignDesk)
About the Company
SignDesk is a workflow automation and documentation product aimed at assisting businesses in digitizing and automating their documentation processes.
Tech Trends in Education
Tech Trends in Education: Whether you’re learning online or not, technology is a critical component of the modern education process….
Everything You Need To Know To Unlock A Disabled Iphone!
Introduction Unlock A Disabled Iphone: A disabled iPhone could be a real pain. Especially when you need to carry out…