Artificial intelligence (AI) is already simplifying business processes in many areas of the modern economy. The use of AI-based tools is also playing an increasingly important role in contract management in order to secure competitive advantages and open up new opportunities for legal departments.
Contracts form the basis of every business relationship. However, creating, managing and analyzing them manually is often time-consuming and error-prone, which presents companies with major challenges. AI has the potential to fundamentally change and optimize these processes. From automated contract creation and intelligent analysis to risk assessment and compliance with legal regulations - AI-supported contract management software shows companies new ways to increase their efficiency, reduce costs and minimize risks. In the following blog post, we show the possible applications for AI contract management and the benefits that companies can derive from it.
Automatically check agreements for compliance
Thanks to its ability to analyze large volumes of text at the touch of a button, AI plays a crucial role in the contract negotiation phase as well as in ongoing changes to legal and compliance requirements. For example, if the legal department needs to check the entire contract portfolio for a specific clause, the AI automatically identifies deviations in the wording and missing content. This eliminates the necessity of manually searching through and comparing documents and enables even extensive contracts to be checked quickly.
Once the analysis has been completed, the system prepares the results clearly for each contract file and indicates where action is required, for example by concluding supplementary agreements. At this point, the software uses digital workflows to automatically create the required contracts and starts the specified approval and signing processes, including the direct involvement of external partners. This feature is a valuable tool for checking the entire archive for regulatory compliance with just a few mouse clicks, especially in the case of changes to legislation such as the LkSG or DORA.
Have summaries created
AI also has a number of advantages for managers and decision-makers. For example, when they receive contracts for approval or signature, they often don't have the time in their day-to-day work to carefully review these documents manually. Artificial intelligence is applied to quickly obtain a sound basis for decision-making. The AI automatically generates a summary of one or more contracts and prepares the content independently and comprehensibly. Depending on the type of contract, such as a rental, supplier or maintenance contract, the AI takes into account the different characteristics of the documents when analyzing the text. This provides a quick overview of the most important information, even in the case of extensive and complex contracts. The results are shorter processing times and faster decisions and contract conclusions.
Chat with contracts
If spontaneous questions arise about certain agreements in everyday life, the AI enables simple and quick answers using the chat function, even for complex topics. Those responsible can “chat” with one or more contracts at the same time and search through the documents on a semantic level. The wording can be in natural language, for example: “What data is processed by the contractor?” or: “What happens if the service is not provided on time?” The AI provides the right answer from the contract content in just a few seconds. This function contributes to significant time and cost savings, increases productivity and also leads to greater employee satisfaction.
Conclusion
The use of AI in contract management helps companies to optimize their processes and secure competitive advantages. Artificial intelligence makes it possible to create, analyze and manage contracts more efficiently, more precisely and with fewer errors. This not only reduces operating costs, but also minimizes legal risks. In view of the ever-increasing complexity and number of agreements, the use of AI-supported contract management software has long been more than just a technological trend - it is becoming an indispensable tool for companies of all sizes.
You can find more information on smart contract management at fabasoft.com/Contracts
