Original article was published by Ganesh_oscar on Artificial Intelligence on Medium
Gain contract visibility with AI-powered contract analytics
It is understood that across the world around 60% of the medium to large-scale enterprises are handling contracts manually using word templates or excel spreadsheets. Word templates are basically used to draft the contracts including necessary clause redlining and commenting and once authored these contracts are scanned and stored in various repositories across the organization. Depending on the nature of the organization and their business model sometimes these contracts are consolidated and stored in a centralized repository like SharePoint where different department users have access depending on their privileges
Having all these executed contracts in one central repository does enable quick access to contracts but it will not help in tracking the important metadata stored in these contracts as all these scanned contracts are inherently non-searchable. The only way to keep track of the important information within the contracts like renewal notice period, payment terms, force majeure, penalties, and damages, etc is to maintain an excel spreadsheet and keep updating with this metadata across the contracts.
So, unless someone proactively looks for the information within the excel spreadsheet there is otherwise no visibility of key information and this can prove highly futile to organizations
What are the major concerns with contract management if there is a lack of visibility?
Poor Contact management by adopting to manual contract processes and using Excel to store key metadata from the contracts can trigger risk and compliance issues. Here are some of the major concern’s organization would need to deal with if they do not have contract visibility
Locating the right contract
When you are storing thousands of signed contracts in distributed repositories and depending on excel to find key metadata, there are possibilities where multiple versions of a particular contract are existing across the organization network, and even if you are able to locate the metadata of the contract you are looking for from the excel sheet it is not an easy task to unearth the actual contract document associated with this metadata. It is possible that you are getting your hands on a contract that is not the most recently updated and using the information from that contract can pose unnecessary challenges
Understanding contract deviations
When manual contract management processes are adopted it is not possible to know if all the signed contracts have strictly followed the organization’s standard legally vetted templates and if there were any changes made to the clauses before signing with a particular party. Though it is not common to change the clause languages it is quite possible to agree to a certain amount of changed language in some of the clauses as per the other party’s request to make business possible. However, once contracts are signed and stored no one keeps a track of these custom agreed terms and gets into the mode of “out of sight = out of mind”. This can result in organizational risk
Different teams within an organization must deal with contract compliance. People from procurement often need to work on decreasing or limiting unnecessary spending, validate, and filter suppliers, and track performance metrics. On the other hand, your legal teams want to ensure that all company-wide contracts are as per the regulatory needs. The sales department on the other hand has the need to use the latest and approved language in their contracts. Unless you have the mechanism to identify the deviations in your contracts it will be difficult to comply with regulatory requirements.
For more information visit now: https://blogs.docskiff.ai/gain-contract-visibility-with-ai-powered-contract-analytics/