Have you ever encountered the phrase "conversational AI" and wondered why everyone's buzzing about it?
Let’s begin with Artificial Intelligence (AI). In an Icertis commissioned survey of 500 CEOs worldwide representing some of the largest enterprises, 56% believe AI will spur greater business competition by minimizing gaps between competitors, and 80% of executives expect AI to impact their bottom line within the next five years. And 55% of these companies plan to train their workers on AI in 2024.
Companies worldwide are already harnessing its power to streamline their contract lifecycle management. They're automating tedious tasks, getting instant legal insights, and closing deals faster than ever. So, how can you take advantage of the AI revolution and give your organization a competitive edge?
In this article, we will demystify conversational AI and the difference between it and generative AI, explore how businesses are using conversational AI, and how you can harness its strengths.
What is conversational AI?
Conversational AI (CAI) is artificial intelligence technology that enables computers to understand, process, and respond to human language in a natural, conversational manner. These technologies use machine learning to understand, answer, and even learn from our chats. Hallmarks of conversational AI include:
The Ability to Understand Human Language: It interprets user inputs, which can be spoken words or written text. Natural Language Processing techniques are used to analyze the structure and meaning of the language. In other words, it can turn what we say (or type) into information the computer can grasp.
Contextual Processing: Conversational AI remembers and understands the context from previous chats. This simulates an essential part of human dialog: maintaining a coherent back-and-forth conversation.
Generating Responses: Once an input is understood, conversational AI generates an appropriate response. It selects or generates language relevant to the user's input and the ongoing conversation. To put it another way, conversational AI picks the words that best fit what you say, and what you've said before.
Learning and Adaptation: Many conversational AI systems are designed to learn from interactions, improving their understanding and accuracy of response. This learning can be supervised, where it is explicitly corrected and trained by a human, or unsupervised, where it learns from patterns in data.
Voice and Speech Recognition: Conversational AI converts spoken words into text and speech synthesis, which converts text responses into spoken words. This represents an additional layer of complexity involving speech recognition.
Emotion and Sentiment Analysis: Advanced AI systems may also attempt to detect and respond to the emotional sentiment of the user's language to provide more empathetic, or contextually appropriate, responses.
Where can you find conversational AI? Today, it is used in various tools like chatbots, virtual assistants (like Siri, Alexa, and Google Assistant), and customer service tools. It aims to make interactions with machines as natural and easy as interacting with a human.
What’s the difference between conversational AI and generative AI?
The difference between generative AI (GenAI) and conversational AI (CAI) is that generative AI produces original content and creations when prompted, while conversational AI specializes in holding authentic and useful two-way interactions with humans by understanding and responding in text or speech. Simply put, GenAI creates new content, and CAI has interactive conversations with humans. Both AI technologies are used in business to help maximize operational efficiencies and enhance decision-making.
Want to learn more about how generative AI is used in contract management? Check out this article for a closer look.
How is conversational AI used in business?
Conversational AI is increasingly used in various business sectors, significantly transforming how companies interact with customers, streamline internal processes, and gain insights from data.
It has made inroads into crucial business functions and industries. Some examples include:
Customer Service and Support: One of the most common uses of conversational AI is in customer service. Chatbots and virtual assistants handle a wide range of customer queries, from simple FAQs to more complex issues—improving the efficiency of customer support and enhancing customer satisfaction by providing quick and accurate responses.
Sales and Marketing: Conversational AI assists in sales and marketing by engaging potential customers through personalized interactions—recommending products, providing detailed product information, and even guiding customers through the purchasing process. When it comes to marketing, it collects customer data, understands preferences, and delivers targeted marketing messages.
Human Resources: In HR, conversational AI streamlines the recruitment process by automating initial candidate screening, scheduling interviews, and answering frequently asked questions. It also facilitates employee onboarding and training and provides employees with quick answers to HR-related queries.
Supply Chain and Operations: Conversational AI monitors supply chains, provides updates, and alerts users to disruptions or delays. This helps businesses in optimizing supply chain management and increases operational efficiency.
Healthcare: In healthcare, conversational AI assists with patient triage, schedules appointments, provides health information, and even offers basic medical advice—improving patient care and operational efficiency.
What are the benefits of using conversational AI to manage contracts?
Conversational AI is poised to revolutionize contract management. Imagine having a tireless assistant who can analyze contracts in seconds, flag potential risks, and even negotiate contractual terms. It understands legal jargon like a seasoned lawyer, but speaks your language, distilling complex clauses into plain English. Need specific information? Just ask! It can search and extract vital details, saving you hours of tedious hunting. And the best part? It learns from every interaction, improving its accuracy—becoming a personalized legal consigliere. Conversational AI manages contracts in a smooth and conversational format that helps users make informed decisions, mitigate risks, and close deals with confidence.
Boosting efficiency Ask the AI anything about your contract, and it'll find the answer in seconds, with instant summaries of lengthy contracts. It turns long, and complex documents into a format that’s quick and easy to understand, handling repetitive tasks like reminders and data extraction,freeing you and your team for strategic work. Drafting contracts is effortless, with the AI suggesting clauses and terms based on your business needs, contract type, and past deals.
Risk management and the cost savings derived are another advantage. The AI catches legal errors and inconsistencies, saving businesses from costly disputes. It flags potential compliance issues, reducing fines and legal fees. When it comes to negotiations, the AI analyzes similar contracts to help secure the best possible terms. But the benefits go beyond saving time and money.
Conversational AI unlocks valuable insights hidden within contract data. It reveals patterns, trends, and risks that would otherwise take hundreds of person-hours to unearth. It intelligently guides users toward informed decisions and proactive strategies. Knowledge becomes centralized, giving everyone in the organization a clear and holistic view of contracts. Employee satisfaction rises, and customer experiences improve, thanks to faster turnaround times.
How is conversational AI used in contract management?
Companies that embrace the AI revolution to manage their contracts may be poised to leapfrog over their competition. Gone are the days when their contract managers manually pored over lengthy contracts line-by-line, searching for crucial information to help them analyze contracts, negotiate terms, and flag potential risks. With conversational AI, you can chat your way to a smarter, smoother, and more profitable contract management system.
While specific features may vary by software provider, here's a breakdown of how conversational AI can be used in contract management:
Automated Contract Queries: CAI answers questions in plain English, saving time and the frustration of a document hunt. A conversational AI system can quickly provide answers to common queries, saving time and reducing the need for manual searching through documents.
Contract Creation and Customization: AI suggests clauses and terms based on the type of agreement and past contracts. Customize them with a quick chat to refine these suggestions, and within seconds, your contract is ready.
Negotiation Assistance: AI suggests negotiation tactics based on its analyses of similar contracts and outcomes. It can guide users through negotiation points and offer optimal terms—helping contract managers negotiate optimal terms with confidence.
Reminders and Alerts: Never miss a deadline again; conversational AI tracks key contract dates and milestones, such as renewal dates, payment deadlines, or delivery schedules—proactively reminding relevant parties of important dates to encourage timely action.
Compliance Checks: The AI checks contracts for compliance with laws, regulations, and company policies—alerting users to potential risks before they become legal problems.
Version Control: AI can assists in tracking contract redlines, maintaining version control, and providing clear audit trails of changes made and and by whom.
Integration with Other Systems: Conversational AI can be integrated with other systems already in use— such as CRM, ERP, or project management tools— providing a holistic view of your contracts in the context of other business activities. In short, chat with the AI to get a bigger picture of your contracts across different systems, without jumping between apps.
Data Analysis and Insights: The AI analyzes contract data to show you trends, risks, and hidden opportunities. Find the most negotiated clauses, common compliance issues, and spot patterns in the contract lifecycle.
Language Translation and Localization: For businesses working with international contracts, AI assists in translating contract terms and adjusting them to be appropriate for different legal jurisdictions and cultural contexts. This helps contract managers ensure that the contract complies with laws and regulations in every jurisdiction.
Accessible Language: Conversational AI makes contract management more accessible for all employees, regardless of their level of legal expertise, by providing easy-to-understand summaries and guidance.
Essentially, conversational AI turns contracts from static, siloed documents into a strategic advantage by helping users work smarter, save time, and make better deals. It's a legal superpower in your pocket – ready to chat whenever needed!
Where can I get a tool like that?
Two contract lifecycle management tools that give you all the capabilities mentioned above are the Icertis Copilots. They cut through lengthy, hard-to-understand legal documents—delivering insights, accelerating contract reviews, and more to drive your business forward. Built on the Icertis ExploreAI Service, Icertis Copilots keep your valuable contract data safe and secure. Opt for one, or both AI copilot companions to help you manage your contracts:
The Icertis Interactive Insights Copilot Engage directly and rapidly uncover insights via pre-defined, hierarchical prompts and free-form prompts that highlight key provisions and identify related contract information. With role-based summaries based on a unique combination of secure data sources, Interactive Insights Copilot helps increase the speed and effectiveness of negotiations while providing instant answers to critical business questions.
The Icertis Risk Assessment Copilot Automate high-volume contract reviews by comparing contract attributes against your specific risk criteria to ensure required clauses and approved language are present in every agreement. Risk Assessment Copilot earmarks agreements that don’t require further review and identifies and helps you address missing or noncompliant attributes, so you can focus on growing your business.
Ready to start using conversational AI to manage your contracts? Request your free demo of Icertis Copilots today to learn more.