KEY HIGHLIGHTS
- A quick read will help you understand how Generative AI transforms Contract Lifecycle Management (CLM) by automating tasks, identifying risks, and fostering collaboration.
- Integrating Generative AI with your existing system helps you to streamline processes, reducing costs, and enhancing compliance.
- This article also talks about Key features of implementing GenAI for all your contract related activities.
How Generative AI Is Changing Contract Lifecycle Management across industry:
- Automation and Efficiency: Contract management is one of the areas where generative AI is performing a significant role as it can do simple work like contract examination, contract analysis, and contract preparation. This automation makes the work faster and reduces instances where there can be mistakes made by hand, reducing the processing time for contracts.
- Enhanced Insights and Risk Mitigation: Generative AI focuses on the large data that can be ingested into the system to find out the possible risks and futures that are hidden in contractual terms. In this way, AI analysis helps to make the correct decisions, anticipate potential threats, and adjust contractual provisions to meet the company’s objectives.
- Improved Collaboration: Many stakeholders are usually involved in contract formation and implementation, and thus there is a need to ensure proper coordination of the activities of all stakeholders involved. GenAI includes real time track changes, versioning, and approval process management features to help keep everything on the same page throughout the contract’s life span.
- Intelligent Contract Summarization: One more thing that is unique to GenAI in Contract Lifecycle Management (CLM) is its capability to generate summaries of contracts and insights from them. This is of special importance for the in-house counsel and other decision-makers who require an overview of the essentials without having to go through numerous agreements’ legal language.
- Continuous Learning and Adaptation: Thus, GenAI platforms are designed in such a way that they should be capable of evolving with the passage of time. The steps involved in the processing of the contracts enhance their ability to make appropriate predictions and recommendations as they work through the contracts. This continuous learning ensures that the contract management processes remain as up to date as is possible
5 Reasons to have Generative AI in Your Existing Contract Lifecycle Management?
- Scalability: Like the size of the businesses, the number of contracts handled by the firms also increases with time. Generative AI also readily escalates to deal with ever-growing volumes of contracts within a considerably short time without compromising on quality. This scalability helps in making sure that the Contract Lifecycle Management (CLM) system that you put in place will be able to grow with the business.
- Cost Efficiency: Implementation of GenAI in your CLM can drastically reduce operation costs. The time used to complete intensive labor tasks can be spent on other more important activities that need human intervention thus lowering the level of intervention for manual activities.
- Enhanced Compliance: This is an aspect that cannot be underestimated since it plays a vital role in every business that aims to deliver its products and services legally. GenAI keeps compliance risks at bay, and this has a way of reducing legal and regulatory compliance risks and hitches.
- Competitive Advantage: In today’s rapidly evolving business world, the CLM system developed by GenAI gives a competitive advantage. This frees up time and resources allowing for quick and efficient response to issues revolving around the contracts, placing your business ahead of the competition in terms of contract management.
- Future-Proofing Your Business: Technology in the business world changes with time as well as business practices. Implementing GenAI in the Contract Lifecycle Management (CLM) also improves today’s operations of a firm to meet future technological advancements hence improving the luck factor.
Top 5 Generative AI Use Cases in Contract Lifecycle Management
- Multi-Document Comparison and Summarization: When dealing with multiple contracts or versions, Generative AI can compare and summarize documents, identifying discrepancies and ensuring consistency. This simplifies the review process and aligns all stakeholders.
- Intelligent Q&A Against Documents: GenAI allows intelligent querying of contract documents, enabling users to ask specific questions and receive precise answers. This functionality helps legal teams locate information quickly within extensive contracts.
- Risk Identification and Mitigation Recommendations: One of GenAI’s powerful applications in CLM is its ability to identify potential risks and provide actionable recommendations for mitigation. This proactive approach is crucial for avoiding costly legal disputes.
- Negotiation Tips and Collaboration Tools:GenAI can offer negotiation tips based on historical data and current market conditions, helping businesses secure better contract terms. Additionally, it facilitates stakeholder collaboration through version management and automated workflow processes.
- Contract Renewal and Expiration Alerts: Renewal is managed through Generative AI to notify the concerned parties on when contracting parties’ contracts are due for renewal. This helps one avoid any slips and make sure that every subscription is renewed on time.
