11 Signs Your Business Needs AI For Smarter Contracts

"If you change the way you look at things, the things you look at change."

This famous quote by Wayne Dyer holds true in contract management.

Oftentimes, the things that we can see the least are probably the ones that need to be looked at and changed. What is the contract management process used by your company? At each phase of a contract's lifespan, how are you maximizing value?

Both the client's expectations and the way in which the work is completed are evolving. In an increasingly automated world, there is a greater need than ever to adapt in order to survive.  

According to a research institute, poor contract management can cause an organization to lose almost 9% of its annual revenue on average. So, how can you prevent these losses and determine whether your contract management is up to par?   

Let us have a look at the indicators that show your company needs to change its approach to contract management:  

Content

1. Missing or buried contracts
2. Stalled contracts and slow execution
3. Challenges in contract compliance
4. Inconsistent Language
5. Errors in the contracting process
6. Little to no insights into contracts
7. Not using a unified system
8. Your business is growing quickly
9. Your business is seeking funding
10. Complying with new laws and regulations
11. Missed deadline blues
12. Conclusion

Missing or buried contracts  

It is discouraging to discover that you have misplaced an important contract in the disorganized drive after spending hours searching through filing cabinets and hundreds of emails. This is considered a red flag in contract management, and you are not alone. In many enterprise organizations, misplaced or inaccessible contract documents are a common concern.  

An AI enabled contract management system can save your day by empowering you to manage your contracts with confidence.  

It offers a wealth of benefits such as enhanced collaboration, meticulously organized, easily searchable, and accessibility for individuals with authorization. Set automated alerts, reminders on renewals, key obligation reminders, and no more multiple versions floating around.  

Stalled Contracts and Slow Execution  

Imagine that after closing a deal with a new supplier and winning everyone over, your company is being held back by the slow contracting procedure.  

Understanding every phase of your contract's lifespan is important. How soon after you receive a contract request does the requestor get access to the first draft? How long does it take for the contract to be signed?  

Been in this scenario before? If yes, this is a clear indicator that you need a contract management system. A contract management system tracks the progress of every contract in real time, automates workflow, offers a centralized repository, and gives valuable insights.  

Challenges in contract compliance  

One of the biggest concerns is always making sure that industry standards and the constantly shifting regulatory landscape are met. It could have expensive consequences and negatively impact your reputation.  

It is important to be up to date on the most recent laws and regulations. Ensuring that your contracts are updated in accordance with these changes will help to ensure compliance.  

However, keeping up is not easy and is a common concern in enterprises. Leveraging an enterprise contract management system helps you automatically scan contracts for any specific clauses.  

Inconsistent Language  

Reviewing contracts repeatedly can be time-consuming for your legal teams. This happens because there are multiple teams handling contracts and would use their own terms causing inconsistent legal language throughout the contract document. Although this is common, it causes confusion and affects all the other related processes such as approvals.  

A contract management system ensures clear and consistent language is used throughout the contract document. AI-powered features of Dock 365 offer clause extraction, clause comparison, and contract summary helping legal teams to keep the contracts consistent and compliant.  

Even if other teams introduce new terminology in the future, the legal team will be able to quickly review them.  

Errors in the contracting process  

Even with the strongest legal counsel team on the project, errors can still occur during a contract's lifetime. Let's say, if your company manages hundreds of contracts, there's a very good probability that some of them will have errors.  

Typographical errors in critical terms or overlooked clauses are common. Again, undetected errors in the pricing section could result in financial issues for your business.   

With the help of a digitized AI-powered contract management system, you can maintain well drafted, and automated contracts. Your legal teams can create contract templates which can be used by other teams in your organization.  

Little to no insights into contracts  

Having a clear understanding of the risks associated with the contracts in your organization is important. But do you find it easy to identify particular terms or clauses within a contract that could pose a threat?   

What if there is confusion around some of the crucial contracts which you are not so sure about? This is a clear indicator that you need a contract management solution to help you foresee any hidden risks and get important insights into your contracts.  

Your legal team's laborious process to analyze contracts for any specific information can be time-consuming and oftentimes expensive. With a centralized contract management system, you get real-time AI-driven insights into contract data.  

Not using a unified system  

In a contract's lifecycle, there are multiple teams involved from your sales team to legal and finance who have their own system or way of handling a contract. This is common in most businesses where in different departments, they use disconnected solutions for managing their contracts leading to ineffective contract management.  

They could be using a CRM platform to enter the data, or some teams might be using other tracking systems or maintaining a spreadsheet which increases the chances of errors. A contract management solution with AI capabilities provides your team with an integrated platform that you can connect with the systems you have now.  

Your business is growing quickly  

As your business grows, you are serving more people and businesses.   

Naturally the complexity of the contracts that your organization manages increases thereby increasing the business risks and missed opportunities.  

If you consider starting with managing contracts with unsustainable means like emails, spreadsheets, or physical storage, you may find that these approaches are not long-term viable.  

A solid framework for managing your expanding client contracts empowers your contract management process. Using an AI-powered document management system such as Dock 365 takes the burden of handling your ever-growing contract requirements and lets you focus on what matters the most to your business.  

Your business is seeking funding  

Why is it important for a business that has secured funding or is seeking funds from an investor to have a robust contract management process?   

A potential investor would want to have a look at the detailed picture of the company's current partnerships, returns, and a summary of existing contracts.  

Investors want more than just ideas and the perspective revolves around the idea that they would want to see how strong the foundation of the business is and how well-managed the contracts are.  

Implementing a contract management system signal to potential investors that you have data backed insights into business deals and future growth plans as well.  

Complying with new laws and regulations  

Keeping up with the changing laws and legislation can be difficult at times and could lead to uncertainty for businesses especially when you have to review every contract and modify the recently passed legislation.   

New regulations and legislation add another layer of complexity to your contracts, making it challenging for the legal teams. 

You can make sure all of your contracts are always compatible with the constantly shifting legal landscape by putting in place a contract management system that can automate compliance and is routinely reviewed.  

Missed deadline blues  

It is up to the parties to decide whether to continue the business relationship, and contract renewal is the final step in this process.   

However, firms sometimes miss the contract renewal date, which can be costly. This is the result of poor contract management practices, which could put your company at risk for problems like legal issues and lost renegotiation opportunities.  

You'll never again miss a contract renewal due to an AI-powered contract management solution. While your CMS keeps track of all your contracts in one location, automated alerts notify you of upcoming renewals in advance.  

This gives you the opportunity and time to plan and renegotiate.  

Conclusion  

In the ever-evolving business landscape, it is important to take control of your contracts.  

A contract management system is more than just a digital filing cabinet that streamlines the way contracts are created, executed, and managed.  

The AI-powered Dock 365 CMS takes you to a new era of contract management where your processes are streamlined, risks are monitored and mitigated, and opportunities are maximized.  

With its intuitive UI and integrated e-signatures, Dock 365 offers real-time insights, minimizes errors, and saves you time.  

Get in touch with our professionals to find out more about our solution or schedule a free demo to learn more.