The Top 5 AI Use Cases Emerging for Contracting

Findings from WorldCC’s “2024 AI in Contracting” report

It’s no secret that there’s a lot of excitement about generative AI and contracts.

At Icertis, we are already seeing customers adopt and deploy this next-generation technology across their contract portfolios and we expect the trend only to become more pronounced as business leaders come to understand the clear benefits these solutions offer.

Yet even the most enthusiastic early adopters of contract AI must address a fundamental question: Of all the contracting tasks AI can assist with, where will the biggest impact be? And therefore, where should they focus our time?

Recently, World Commerce & Contracting surveyed legal and procurement professionals across 513 organizations globally on where they see AI having the biggest impact. 

The top 5 expected benefits of AI in contract lifecycle management

The survey found there was no lack of enthusiasm from contracting professionals about AI—76% of respondents said they are personally enthusiastic about its capabilities. This is up from 36% just six months before in June 2023.

The top five areas respondents expect to see benefits are:

1. Contract risk assessment

2. Contract negotiations

3. Generate contracts

4. Free up time for strategic work

5. Scale with the business

 
The top use case identified by respondents focused on risk and compliance – 94% expect AI to assist in analyzing risk and compliance in their contracts. Again, this finding aligns to what Icertis has heard from our customers. Based on user feedback, Icertis released its Risk Assessment Copilot, which compares contract language to a company’s approved language to surface risky deviations.

Risk management is hardly the only area where contract managers expect impact. “Assist in contract negotiations” and “generate contracts” were both areas in which more than 85% of respondents see AI assisting them in the near term. 

Rounding out the top expected use cases are: “Free up time for more strategic work” and “scale as the business grows.”

How contract AI is being used today

These large numbers are all the more striking when considering how AI is being used.

The survey found that only 30% of respondents currently use AI in their contract management programs; only 7% use AI to manage risk.

While the delta between what is expected in the future and what is happening on the ground might, in some contexts, be a sign of a technology being overhyped, in the case of generative AI, it is more likely an effect of how fast it is evolving.

Overcoming barriers to implementation

That said, the survey reveals some serious barriers to adopting AI for contracting—in particular organizational attitudes toward AI deployment.

The same respondents who reported being largely enthusiastic about AI suggested their organizers were less so: only 37% said their organizations were “enthusiastic” about AI. Privacy and security were reported to be the top barriers to implementation – with 57% citing concerns. Data output quality and “general lack of trust” are also concerns. 

The good news for contracting professionals is that these barriers can be overcome.

With the right AI partner, data security can be addressed; as for accuracy of AI outputs, customers report that they are seeing the best results when applying AI to centralized, structured contract data.

“Where we’ve found the most success with AI is where we’ve seen real digital transformation occur,” Tom Orrison, Sr. Director of Legal Operations at Microsoft, noted recently. “Where we have standardized processes that yield standard structured data outputs, that’s very easy to layer artificial intelligence on top of.” 

Conclusion

As the landscape of generative AI continues to shift, contracting processes are emerging as a prime area for transformative impact. This evolution is characterized not just by the technological advancements but also by a growing readiness among industry professionals to integrate these tools into their daily operations. The swift pace of change reflects an increasing recognition of the benefits that AI can bring, particularly in areas like risk assessment and compliance, contract creation, and negotiation facilitation. 

As contracting professionals increasingly look to AI solutions to address their needs, the role of trusted partners in ensuring the security and effectiveness of these technologies becomes crucial.

To learn more about how Icertis is approaching generative AI to ensure data security while also maximizing its impact, visit our generative AI page.

Want to read the full WorldCC AI report? Access your copy here.