Artificial intelligence (AI) is driving excitement and caution in equal measure as businesses start to integrate this technology into their processes. Gisela Kruesch, Content Strategist at Icertis, recently sat down with Shannon Kirk, Director of Product Management at Icertis, to discuss how AI is transforming the way procurement manages contracts.
Talking about the amazing opportunities that AI unlocks, Shannon notes its use of natural language processing (NLP), machine learning, and data analytics that respond instantaneously to business questions. Together, these tools work to improve accuracy, surface relevant information in contracts, and automate the contract generation process, reducing time and effort required for manual review and drafting. The time and effort saved enables procurement to make more strategic decisions and respond proactively to challenges.
AI plays a vital role in assessing contract risks, with machine learning algorithms analyzing contract terms and conditions, and identifying potential risks such as non-standard terms or unfavorable clauses. This capability informs decisions during negotiations, mitigates potential issues and ensures outcomes that nurture business relationships.
Additionally, AI monitors contract compliance by comparing contract terms with actual performance data—identifying discrepancies, tracking performance, and generating alerts for non-compliance. It also enables predictive analytics, which forecasts contract renewal rates and highlight the possible impact of changing processes and different decisions as they happen—such as the impact of weather, port delays, geopolitical events, labor stoppages, and civil unrest.
As AI evolves, it holds immense potential to further revolutionize contract management—driving efficiencies and accuracy that increase the strategic value of procurement professionals within organizations.
Watch the full conversation above.
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According to the new report, “IDC MarketScape: Worldwide SaaS and Cloud-Enabled Buy-Side Contract Life-Cycle Management Applications 2023 Vendor Assessment”: “CLM applications have made significant advances in the use of innovative technology to arrive at their current state. The applications have transitioned from glorified digital contract repositories to highly automated decision support tools that integrate with procurement, sourcing, and finance platforms.”Read Now