“What is the purpose of technology in contract management?” This was my first question to the audience at the recent IACCM Middle East Conference in Kuwait. The answer? To make our job easy.
Historically, however, once a contract is signed, stakeholders don’t necessarily care too much about the sweat, blood, and tears negotiators have to put in to get the most favorable terms. Given the scarcity of resources and continuous push to do more for less, technology has the potential to transform the entire contract lifecycle by eliminating manual contract processing, and improving the accuracy and efficiency of the process.
Enter Microsoft products
Necessity is the mother of invention, and technology in contract management is no different. Although contracts have always had a strong human element at every step, the advent of contract lifecycle management (CLM) tools has enabled the industry to make the move from being people-centric to being more technology-centric.
Until just a few years ago, a number of excellent Microsoft products such as Word and Excel helped contract managers draft, negotiate, and redline contracts for SLA calculation, etc. Although key metadata – such as the terms of a contract – would often be tracked on Excel by efficient contract managers, organizations struggled to store, maintain, and manage their contracts, and there was always a gap for a secure and accessible online repository. And while SharePoint did a great job of storing contracts, the challenge remained of how to glean intelligence out of the data efficiently and effectively, especially when contracts were not stored property or in a logical manner.
The advent of workflow-based CLM tools and e-signatures
Later, we saw the introduction of more workflow-based CLM tools that enabled users to generate a first draft of the contract and route approvals through the workflow process, thereby reducing the email chain. Increased adoption of e-signature tools such as DocuSign further automated and streamlined the contracting process.
Despite these improvements, these tools failed to solve a fundamental challenge: how to manage legacy contracts still on paper and how to extract information from contracts not in the metadata. Looking for this information in a stack of contracts with the human eye is a bit like looking for a needle in a haystack.
The future is artificial intelligence and machine learning
In previous blogs I’ve written about how the future lies with artificial intelligence (AI) and machine learning (ML) tools, where information can be mined from contracts at the click of a button. In 2019, we were able to recommend and adopt some promising CLM tools for our clients that focused on insight searching, auto-redlining, and risk assessment. It’s truly amazing to see a robot in action pulling out information from thousands of documents such as clauses relating too privacy for GDPR compliance or helping to identify a lease for IFRS 16 compliance.
In 2020, I expect AI/ML-based tools to evolve even more, delivering results with more accuracy and precision, and “less teaching.” The human element will be reduced further, where machines will learn from mistakes on their own and do the work with minimal human intervention.
Who knows – as we move into 2021 perhaps we’ll see robots writing blogs about their own learning experience and evolution!
Capgemini helps Fortune 100 companies drive meaningful intelligence out of their thousands of contract documents. Learn more about how Capgemini’s Contract Compliance & Optimization (CCO) solution provides a broader and deeper solution to your compliance, cost reduction and spend protection goals, from an often-overlooked area – the written contract.
To learn how Capgemini can provide the correct contract management platform for your organization, contact: email@example.com
Mani Agarwal advises clients on commercial and contract management transformation initiatives. He helps organizations to transform their contract lifecycle and contracts portfolio by implementing the right machine learning/AI tools. He also uses his expertise in optimizing the performance of contracts to ensure maximum value through all contractual opportunities and avoid any revenue leakage. Mani is a qualified lawyer and an elected member of the prestigious IACCM Council for IT and Outsourcing Networks.