To Thrive in the Age of Generative AI, Tech Companies Need to Find Use Cases That Deliver Maximum Value

Exhibit A: Contracts. 

March 15, 2024 By Samir Mehta

Innovation is paramount in the technology sector, where solutions and services move and evolve at lightning speed. Generative AI has only compounded the need and opportunity for technology companies and systems integrators to continuously strive to be more agile and resilient to stay ahead of the competition.

When you break it down, generative AI is having an impact on both what technology companies are selling and what they’re buying: Most technology organizations are simultaneously incorporating generative AI into their own product offerings (sell-side), while also onboarding new services, headcount and technology to deliver for these customers (buy-side).

In both cases, contracts play a critical role.

On the sell side, commercial models in the technology industry have always been highly complex, with indirect sales through channel partners and systems integrators. It also encompasses complicated end-user licensing agreements tied to subscription "as-a-service" cloud offerings, hardware purchases or leasing, or bundled solutions that can make the net profitability of a deal challenging to calculate and optimize. Generative AI, which typically requires more cloud processing power and often come with consumption models that aim to pass on processing charges to the end user, only add to the complexity. Sales contracts for these goods and services need to be configured on the fly using dynamic clauses, and it’s critical that they are properly written to ensure they make commercial sense.

In this environment, where sales need to be closed quickly and profitably, organizations need effective ways to draft, review and execute sales contracts that conform to the company’s profit models.

Meanwhile, rapidly changing market dynamics due to innovation and emerging business models likely requires technology companies to quickly engage new vendors and go-to-market partners—buy-side deals requiring their own contracts. Slow vendor engagement can make the difference between getting to market ahead of competitors or behind them.

Given the centrality of contracts in business processes, leading technology companies are prioritizing upgrades to their contract lifecycle management (CLM) technology in their generative AI journey. 

Contracts, whose ‘data’ is often presented in the form of written language, are particularly suited for generative AI solutions.

As Tom Orrison, Sr. Director of Legal Operations at Microsoft, recently commented
 
“Contracting is one of the avenues where we’re exploring quite heavily. Contracts are very, very word heavy. The nice thing about these generative AI models is they’re really, really good with words. Technology historically has not been.”

AI purpose-built for contracts can transform word-heavy documents into structured and connected data—accelerating contracting processes and yielding insight that supports driving better business outcomes.

Contract AI use cases are ample: 

In summary, applying generative AI to contracts unlocks speed, agility, and savings that allow technology companies to quickly and confidently evolve in a market keenly disrupted by this emerging technology.

Icertis’ Approach to Generative AI

Icertis released the market’s first generative AI offerings for enterprise contracting, and has seen a significant uptake in the market—75% of all deals in 2023 included our AI capabilities.

These deals have included several enterprise technology and system integrators turning to Icertis Copilots to enable their own shift to generative AI.

One global systems integrator is using the Icertis Interactive Insights Copilot to enable 20,000 system users to more easily access contract data and insights. With the Copilot, users can ask natural language questions about a contract (e.g., “What inflation index does this contract use”) and get an instant answer. The customer sees this as a huge win in its effort to empower everyone who works with contracts to have a hand in ensuring they are optimized before signature and fully realized after execution.

Meanwhile, a leading computer hardware manufacturer is turning to the Icertis Risk Assessment Copilot to improve risk management across its logistics operations. The Risk Assessment Copilot provides intuitive, color-coded risk scores for every clause in a contract based on company-defined criteria. In early tests, the Copilot was found to reduce contract review time by 40%. 

Overcoming Data Security Concerns

Of course, as with any new technology, data security remains front of mind as companies consider generative AI. 

In a recent survey by World Commerce & Contracting, “data privacy and security” emerged as a top barrier to generative AI adoption for large businesses.

Icertis released its first AI contracting tools five years ago—with data security and privacy at the core of our solution architecture (see more on our Ethical AI page). 

Data used in Icertis Copilot conversation remains in the Icertis subscription and is never used for training the underlying foundation models. More importantly, the models themselves get deployed in the subscription, which Icertis owns, meaning they are not even visible to anybody outside of that subscription.

This focus on privacy and security has continued through the release of generative AI solutions. 

Data used in Icertis Copilot conversation remains in the Icertis subscription and is never used for training the underlying foundation models. More importantly, the models themselves get deployed in the subscription, which Icertis owns, meaning they are not even visible to anybody outside of that subscription. Icertis also leveraged the enterprise expertise of Microsoft—including by serving as a launch partner for Microsoft Azure OpenAI.

For these reasons, some of the most data-security-conscious companies in the world are choosing Icertis to leverage the benefits of generative AI without compromising on security.

Other Icertis Benefits

Of course, the time and efficiency gains experienced by these customers come on top of the documented benefits of the core Icertis Contract Intelligence platform

Providing a single source of truth for all client, supplier, and vendor relationships, The Icertis platform allows companies to greatly reduce risks associated with missed contract obligations. The platform also ensures commercial compliance by connecting contract data—like terms and prices—to operational systems like procurement, enterprise resource planning (ERP), and customer relationship management (CRM). The platform also enables spending tracking against the contract and easy auditability for compliance reporting and Statement of Work (SOW) preparation.

The Icertis platform has helped leaders such as Microsoft, ServiceNow, and 6Sense transform their contracts into a strategic advantage. Drawing from best practices developed from Icertis' deep industry experience, Icertis for Technology specifically addresses the challenges and needs of the technology sector by delivering quicker deployment and time-to-value.

Icertis for Technology is tailored to technology companies, providing features such as: distributor and reseller risk assessment; SaaS and subscription model support; ready-to-use contract assembly and pre-built smart links for visibility; and more.

These features accelerate time-to-value by closing deals and onboarding customers and partners more quickly.

As Gen AI advances, Icertis Contract Intelligence will provide a foundation of structured and connected contract data that yields greater and greater business insights—thereby leading to better business outcomes.

Conclusion

Technology is a contract-intensive industry, and the complexity of contracts is only increasing with the shift to as-a-service, consumption-based and bundled service revenue models.

With Icertis Contract Intelligence and Copilots, you can transform your contracts into vehicles for maximizing the value of these business deals through intelligent insights that eliminate revenue leakage and power better, faster business decisions. 

For more insight into how advanced contract lifecycle management can benefit your business, visit our Icertis for Technology solution page.

Technology Industry

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Contracts define the customer, supplier and partner relationships that make technology companies tick. Drive innovation and hypergrowth with contract intelligence technology that unlocks contract data and delivers speed, revenue, and compliance.

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