Businesses willing to propel their CLM solutions towards a system of intelligence, are making a wise investment. It is important to acknowledge that the rise in Artificial Intelligence initiatives is a worthy move to improve business outcomes.
Though traditional Contract Lifecycle Management systems have served a valuable purpose, it is well understood that these traditional systems often struggle to meet the dynamic needs of modern businesses.
The evolution of CLM necessitates a re-evaluation of existing solutions due to the following shortcomings:
- Integration Bottlenecks
- Contract Language Inconsistencies
- Missed Renewal Opportunities
- Hidden Liabilities
- Limited Customization
- Restricted Collaboration Features
This blog provides insights into the value of an easy-to-use AI-powered CLM. We will explore the concept of self-serve, third party upload functionalities, and ROI of AI-enabled CLM.
AI-driven CLM as a Self-Serve Superhero
Every contract sustains supplier and customer relationships while reflecting current obligations and opportunities. Traditionally, contracts are complex and require extensive training, but now businesses can use Artificial Intelligence to simplify the entire process.
AI-powered CLM introduces a game-changer— self-serve features. These features empower users to complete tasks independently, streamlining workflows, boosting overall efficiency and significantly increasing the ease of use of contract lifecycle management solutions.
How AI-enabled Features Simplify Tasks
AI-powered CLM systems offer several self-serve features that enhance the user experience and improve efficiency. Here are some key points:
- Automated Contract Creation: AI-powered CLM systems can automate the contract creation process by suggesting pre-defined templates and clauses, reducing the need for manual drafting, and minimizing errors.
- Clause Identification and Auto-Completion: AI can also identify specific clauses and assist in the redlining process, suggesting improvements to existing clauses to better articulate the intended message.
- Intuitive Navigation: Such tools include intuitive navigation features like interactive dashboards, visualizations, and clear headings.
- Enhanced User Experience: AI-powered contract management tools can provide an enhanced user experience by offering features like real-time collaboration, automated workflows, and customizable reporting.
- Reduced Errors, Ambiguity and Delays: The use of AI can reduce errors and ambiguity by providing clear and concise language, eliminating jargon and legalese. This in turn reduces delays caused by the need to clarify unclear language with counterparties.
- Increased Efficiency: They can automate repetitive tasks, such as contract review, redline tracking, analysis, and negotiation.
- Improved Compliance: They can ensure compliance with regulatory requirements and internal policies by automating the review and analysis of contracts.
- Predictive Actions: AI can predict next steps in approval workflows, recommend actions, and even auto-generate renewal drafts, streamlining the contract lifecycle process.
- Risk Identification and Insight Generation: AI can identify conflicts within contract language, including variations between the main contract and its addenda, providing valuable insights for better decision-making.
- Cost-Efficiency and Reduced Labor Costs: AI-powered CLM systems reduce operational costs by automating routine tasks, minimizing the need for human intervention, and reducing labor costs.
Third-Party Uploads: Simplifying Collaboration with External Contracts
Managing contracts from external sources is a significant pain point for many organizations. Inconsistent formatting and language across these documents make locating crucial information a tedious task. Manual reviews, prone to human error, increase the risk of missed obligations and costly disputes.
Furthermore, the lack of a centralized system limits visibility into contractual commitments, hindering proactive risk management. Collaborating on these external contracts also involves time-consuming back-and-forth communication, slowing down the entire process.
However, AI-powered Contract Lifecycle Management (CLM) systems with third-party upload functionalities revolutionize the handling of external agreements. These advanced systems automatically extract metadata information regardless of format, identify and compare clauses for consistency, and provide a central platform for real-time collaboration.
This transformation boosts efficiency and minimizes risk, making AI-enhanced CLM a wise investment for modern businesses.
The ROI of a User-Friendly AI-Powered CLM: Measuring the Impact of Increased Adoption
The success of an AI-powered Contract Lifecycle Management system depends on user adoption. When employees readily embrace and utilize the technology, organizations can realize significant benefits that drive a strong return on investment (ROI).
Quantifying the Impact of User Adoption
Improved Contract Turnaround Times: An easy-to-use AI-powered CLM system allows employees to quickly learn and navigate the platform, leading to faster contract drafting, review, and approval processes.
A Forrester study found that CLM solutions can reduce the time required by legal teams to draft and review contracts by up to 80%.
Reduced Risk of Errors: AI-powered features like clause identification, auto-completion, and intuitive navigation minimize the risk of human errors in contract management.
A study by EY found that the average cost to create a basic contract is nearly $7,000, while complex contracts can cost up to $50,000.
Improved Team Productivity: When employees adopt the AI-powered CLM system, they can focus on higher-value tasks instead of manual, time-consuming contract processing.
According to the Association of Corporate Counsel, 80.8% of in-house lawyers participate in contract management by reviewing and drafting documents.
Enhanced Collaboration and Visibility: User-friendly AI-powered CLM systems facilitate seamless collaboration among stakeholders by providing centralized access to contract information.
Unveiling the ROI of User-Friendly AI-Powered CLM
To quantify the ROI of a user-friendly AI-powered CLM system, organizations should consider the following factors:
| Benefit | Description |
|---|---|
| Cost Savings | Reduced contract turnaround times, decreased risk of errors, and improved team productivity can lead to cost savings of up to 30%. |
| Revenue Growth | Faster contract cycles, enhanced collaboration, and improved visibility enable organizations to seize more business opportunities and drive revenue growth. |
| Compliance and Risk Reduction | Minimizing the risk of contract disputes and penalties protects the organization’s reputation and saves up to $100,000 annually in potential legal costs. |
| Improved Customer Satisfaction | Streamlined contract management enhances customer experiences by 25%, fostering loyalty and repeat business. |
By focusing on these quantifiable benefits and aligning the AI-powered CLM system with business goals, leaders can show a clear return on investment and justify the spending on user-friendly technology.
Explore Gainfront AI-powered CLM Solution
By selecting a CLM that enhances efficiency, manages risks effectively, and gives you a competitive edge, you can ensure you are making a smart choice.
We would love to show you how Gainfront can help. Please contact us to schedule a demo!
Rahul Asthana has a PhD in Operations Management from the Anderson School at UCLA. He has 25 years of experience in supply chain management, starting his career in IBM working in supply chain operations. He then moved into product management and product marketing of supply chain software while at SAP and Oracle. He manages product strategy and product management at Gainfront. In terms of hobbies outside of work, he really enjoys tennis. Follow Rahul Asthana on Linkedin!
