Generative AI is rapidly changing how companies look at contracts — and the value they can get out of them. The latest evidence is in the Gartner® Magic Quadrant™ for Contract Life Cycle Management 2023 report.
In the report, the authors write: “With the signiﬁcant hype generated in 2022 around generative AI, Gartner has observed a spike in demand around AI in contract solutions. Customers are more open to and exploring investment in AI use cases than any preceding year.”
This observation aligns with Icertis’ own experience in recent months.
Since we released the market’s first generative AI copilots for enterprise contracting, the response has been overwhelming. The enthusiasm and excitement for what these Copilots can deliver to customers is palpable at demos, events, and workshops.
The excitement is not surprising; contracts are, in fact, a perfect generative AI use case.
Contracts are universal across industries, geographies, and businesses of all sizes, and imperative to any and all commerce. However, contract data has historically been locked in dense legal language that had to be parsed manually by humans—and then only when a dispute arose. At many organizations, the “digital transformation” of contracts has amounted to storing PDFs in shared drives.
Under this paradigm, contract obligations go unfulfilled and contract value goes unrealized: According to the most recent estimates by World Commerce & Contracting, missed contract obligations lead to 8.4% value erosion on contracts.
Since our founding, Icertis has recognized that so much more is possible with contracts, and we’ve pursued a vision of enterprise-wide contract intelligence that helps organizations ensure the intent of every contract is correctly memorialized in the contract and fully realized in practice. Since 2018, we have been building AI capabilities that can recognize intent and opportunities in contracts so organizations can save time and make better business decisions.
These capabilities have delivered significant value to our customers. Now, the general availability of large language models (LLMs) like the one used by ChatGPT has turbocharged customer interest in what AI can do with their contracts. We’re committed to meeting that interest with rapidly evolving generative AI capabilities that build off our established track record as a pioneer in contract AI.
Our Copilots provide assistive, generative, natural language capabilities that cut through legal-ese to deliver insights from contracts and the enterprise systems they touch. Accessing contract information related to revenue generation, savings opportunities, and risk mitigation becomes as easy as prompting the system with a natural language question.
We’ve also developed this technology with the understanding that contract data is as sensitive as it is powerful. Recent surveys show that nearly 70% of IT leaders expect generative AI to introduce new risks to their data, and to address this concern our Copilots are backed by the enterprise data security of Microsoft Azure OpenAI Service.
In the latest Gartner® Magic Quadrant™ report, Icertis is named a Leader and positioned furthest for Completeness of Vision. We believe this can be attributed, in part, to our vision for AI-powered enterprise contracting.
Our own research shows that business leaders expect generative AI to have an immediate impact on their bottom lines. In a recent survey commissioned by Icertis of 500 c-level executives in the US and UK, nearly half of respondents said AI will impact their bottom line in 2024, and an additional 36% believe it will impact their bottom line in the next 2 to 5 years. More than half also said AI would increase competition between companies, as generative AI enables smaller organizations to rapidly scale up and compete.
Contracts are the foundation of commerce. The application of generative to this foundation goes far beyond legal use cases and deep into the business across sales, procurement, compliance and risk management. With so much potential to deliver business value, contract intelligence must be a critical piece of the plan for any organization looking to compete in a business landscape being reshaped by generative AI.
For more insights into the contract lifecycle management market, access a complimentary copy of the Gartner Magic Quadrant for CLM 2023 here.
Gartner, Magic Quadrant for Contract Life Cycle Management, 18 October 2023, Kaitlynn Sommers Et Al.
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