Contracts contain more than fine print – they hold the details that can make or break deals and partnerships. Yet many organizations still rely on outdated tools and manual methods to navigate contracts, leading to costly missteps, compliance issues, and missed opportunities. The solution, according to the people at ISG, lies in intelligent contract management platforms that harness artificial intelligence, data extraction, and automation to streamline the process, unlocking the full potential of contracts to drive business performance.

What Traditional Contract Management Misses

Legacy contract management approaches mean teams slog through onerous administrative tasks and spend countless hours negotiating contract specifics. But this is merely looking at the basic obligations within the fine print. Organizations can gain deeper insight and value from contracts by taking an intelligent approach. Nonetheless, legacy methods, reliant on humans reviewing hard copies, miss critical details hidden in endless pages of legalese and reams of data. Simply put, traditional methods provide a superficial look rather than exploiting contracts as vital business tools.

The Pitfalls of Manual Review

No company has the time or resources for employees to fully comb through every word, clause, and obligation across tens of thousands of pages of contracts. With human review alone, companies experience a myriad of problems stemming from contracts:

• Financial obligations go unmonitored due to lacking visibility into expiration dates, automatic renewals, and fee changes. This leads to missed revenue opportunities or unexpected budget surprises.
• Companies fail to mitigate risk because they don’t see the terms that enable audits, adjustments, or even early termination.
• Organizations miscalculate the total costs of contracts because of laborious manual processes. They lack an overarching assessment of long-term commitments versus potential rewards.

The Power Within Intelligent Contract Management

To overcome the roadblocks of manual methods, leading companies now turn to intelligent contract management solutions powered by artificial intelligence, machine learning, and natural language processing. These platforms use advanced technologies to:

• Extract thousands of data points from any contract document or template to create structure from pages of dense legalese.
• Identify risks and obligations so companies can take proactive steps to protect themselves.
• Provide real-time visibility into contract health with dashboards and reports.
• Automate mundane tasks like filing and routing, allowing teams to focus on higher priorities.

Intelligent contract platforms unlock previously hidden insights to optimize negotiation strategies, ensure compliance, and manage portfolios holistically. But technology alone isn’t the only key that unlocks a contract’s full potential.

Winning with an AI-Human Partnership

Intelligent technology rapidly and thoroughly digests contract data at scale, but the context, nuance, and relationships within deals still necessitate human involvement. An AI platform provides comprehensive information, but legal experts add crucial qualifications based on precedent and business leaders make executive decisions aligned to corporate goals. Together, humans supported by technology achieve heightened efficiency, deeper wisdom and minimizing risk.

With an intelligent contract management solution, the AI-human team can:

• Categorize contracts based on detailed analysis of obligations, rights, terms and more rather than solely relying on legal team memory.
• Determine optimal prices during renewal negotiations by evaluating previous iterations plus current market rates.
• Receive recommendations for adding or modifying clauses based on learnings extracted across the contract library.
• Stay on top of milestones like renewals and expiration dates, even as portfolios scale into the tens of thousands.

Conclusion

Contracts build the foundations of business partnerships and deals. Yet legacy management practices reduce these vital documents to administrative burdens filled with restrictive fine print. Smart contract systems use the latest AI to find important information that helps teams negotiate better, follow rules, and assess their projects. With humans and artificial intelligence working symbiotically, companies maximize contract potential.