What is Contract Analysis Software?

Contract analysis software helps companies reduce contract cycle times, improve the outcome of negotiations, proactively manage risk, and ensure compliance. The best contract analytics software leverages AI technology to provide valuable insights in real time.

In popular culture, artificial intelligence is usually portrayed as having a kind of super-human consciousness, with a profound capacity for sentient thought. In the real world, most AI applications are tailored to perform specific tasks, analyzing and collating information at scale to deliver valuable insights for better, faster decisions. Unlike the business analytics of the past, AI can extract meaning from unstructured information using natural language processing (NLP), identifying salient factors and bringing those to the attention of the people who make your business run efficiently and effectively.

Advanced analytics and AI offer a range of benefits for enterprises, empowering contract managers and others throughout the organization to increase revenue, streamline operations, rein in costs, and identify new opportunities to create business value.

What is Contract Analytics?

Briefly stated, contract analytics applies technology to help organizations better understand their legal agreements, which in turn helps them to extract more value from their business relationships.

Automated contract analysis delivers high-value insights to business users throughout the organization, enabling them to improve business performance, ensure compliance, and accelerate business results. Contract analytics delivers insights that are relevant, actionable, automated and customized to the needs of each stakeholder audience. Just as importantly, it provides that valuable information in real time.

Because contract data is by nature unstructured, it has historically been difficult to analyze at scale. Most organizations continue to operate under those old rules. If they’re not using contract analytics, they have very limited access to the insights that might help them deliver better business outcomes.

Traditionally, contract reviews have been the domain of junior personnel on the legal team, tasked with poring over legal agreements and ferreting out information that might be important. That’s a tedious process that requires a keen eye for detail. It’s also fairly subjective; issues or concerns that seem important to one contract manager may be overlooked by another as being irrelevant.

Unfortunately, reviewing contracts manually can be a very labor-intensive process. Meticulous proofreading and back-and-forth emails or phone calls to clarify questions can be time-consuming, especially if it involves tracking down hard-to-reach decision makers in other departments or outside of the organization.

Most organizations pay very close attention to their legal agreements during the negotiation process, up to and shortly after the time that those contracts are executed. It’s rare, however, that a company will revisit a legal agreement after the fact unless a significant problem has come up, or if a material change occurs in one of their business relationships. Absent any major issues, the company’s rights, obligations, and enforcement provisions may not seem to merit any further attention from contract managers, who are already stretched thin as it is.

Introducing Contract Analysis Software

AI-enhanced contract management software, also known as contract lifecycle management (CLM), enables users to surface intuitive and actionable insights, gaining better visibility into a range of performance metrics across all stages of the contract lifecycle, including negotiation, approval, performance, and expiry/renewal. That, in turn, allows organizations to unlock new sources of value from their legal agreements.

Contract analysis software offers insights into cycle times, deviations, savings, risks, expiry, renewal, revenue, and spend, – all made possible with advanced AI & machine learning algorithms. The most powerful contract analysis software comes with best-practice metrics and dashboards that can be easily configured for the different contract types across the sell-side and buy-side, as well as the various types of users and functional groups that participate in the end-to-end contract lifecycle.

Contract Analysis Software Benefits

The insights derived from contract analysis software translate directly into business value. Here are just a few examples:

Identify new business opportunities

Contract management platforms do this by tracking your entire value chain to spot potential savings, revenue, and untapped performance obligations.

Decrease contract cycle times

Reduce time spent in contract review cycles by gaining a 360° view of dependencies, obligations, and deliverables, – enabling your team to reduce turnaround times for legal agreements.

Reduce costs & overruns

Contract management platforms reduce operating costs by identifying opportunities to renegotiate terms, change suppliers, or simply hold vendors accountable to their contractual obligations.

Identify and respond to risks

Reduce contract risks in real time by spotting changes, deviations, and opportunities based on user-configurable reports.

Track performance data

Track contract performance across internal departments, as well as vendor and supplier performance relative to contractual obligations.

Prevent compliance issues

Safeguard against contract noncompliance by proactively identifying contractual deviations from standard procedures or breaches of contractual standards.

With contract analytics, companies can monitor and assess contract performance and terms on a constant basis, without investing their valuable staff time in a perpetual review process. They can get real-time operational reports, access historical documents such as purchase orders or SOWs executed against a contract, monitor vendor performance against legal commitments, and track a host of other contractual metrics for legal, finance, sales, and procurement.

Role of AI in Contract Analytics

The best contract analytics software leverages AI technology that has been trained on millions of contracts to identify, structure, and catalog clauses and specific terms by type, such as obligations, discounts, or penalties. That, in turn, provides valuable insights about potential risks and opportunities.

Deep integration to other enterprise systems makes it possible to analyze data in the context of complete business processes, offering even more actionable insights. Advanced BI capabilities enable users to create interactive visualizations in the form of tables, graphs, or charts. The best contract analytics solutions even offer the ability to ask questions and perform what-if analysis using natural-language questions.

Conclusion

Icertis Contract Intelligence (ICI) is a complete contact lifecycle management (CLM) solution that stands apart from competitive products because of its distinctive approach to AI-powered contract analytics. ICI which helps enterprises to reduce cycle times, improve negotiation outcomes , and proactively identify and manage risk and compliance issues. Highly configurable, role-based reports and dashboards enable organizations to track key metrics and gain better visibility into overall business operations.

The net result is a positive impact on your both top and bottom-line metrics, delivering measurable business value for the organization. To learn more, sign up for a demo of Icertis Contract Intelligence today.