Artificial intelligence makes contractual processes fast, self-reliant, and organized, making AI a valuable part of contract management processes. According to a 2022 World Commerce & Contracting report, 50% of organizations are positive about AI’s contributions to improving contract efficiency in the coming 2-3 years.
Deploying AI for contract management helps automate redundant and laborious parts of the contract lifecycle management process, leaving legal staff with more time to focus on what matters.
This blog provides detailed information on AI contract management. Get detailed information on leveraging artificial intelligence and machine learning technologies to streamline CLM processes. Let’s begin.
What is AI-based contract management?
AI-driven contract management refers to utilizing artificial intelligence technology to automate parts of the contractual process. This is possible through AI contract management software—digital platforms powered by OCR technology and extractive AI capabilities.
These solutions are enriched with features for different phases of the contract lifecycle, the core ones being drafting, review, negotiation, signing, storage, and tracking. AI contracting software replaces traditional CLM tools through maximized automation and minimal contractual effort.
The scope and potential of AI technology in contracting processes are clear. However, what are the benefits of using AI for managing contracts? Let’s find out.
6 Benefits of using AI for managing contracts
AI contract management systems help accelerate the efficiency of legal, sales, HR, finance, purchase, and all other departments dealing with business contracts. Here are 6 key benefits of using AI for contract management:
1. Improves CLM efficiency
According to a report by the University of Texas at San Antonio, executing a non-standard agreement with high risk can take as much as 3 to 4 months. This duration encompasses the time it takes from contract request generation to final signing.
AI-based CLM tools help shrink the contract TAT from months to days. Strategic and automated workflows self-orchestrate contract journeys, ensuring that contracts move automatically across your organization without any bottlenecks or delays.
2. Automates repetitive tasks
Contract management involves many repetitive activities such as creation, review, approvals, redlining, and tracking. Legal teams spend time extensively on these processes, reducing their efficiency and productivity.
AI contract management solutions help automate monotonous tasks throughout the contract lifecycle. With AI, business teams can automatically generate contracts, track contract status, redline contract clauses, and get approvals. This gives legal staff more bandwidth for other, more important activities.
3. Helps save contract admin costs
According to Salary.com, the cost of hiring a contract administrator can range from USD 58,008 to USD 76,511. The contract administrator manages the contractual processes to ensure all contracts flow smoothly.
Using AI for contract management helps reduce contract admin costs by automating routine contract tasks. With AI-powered contract management software, all contractual processes can be automatically administered with minimal human intervention, saving contract admin time and costs.
4. Streamlines contract compliance
Legal compliance and risk management are important for effective contract administration. Regarding contract management, compliance means adhering to the agreed terms and commitments such as payment dates, payout amounts, and milestones. Manual tracking often results in contract negligence and non-compliance.
Using AI for contract management helps streamline compliance by automating contract obligation tracking. AI-based contract management solutions help ensure that all your contract obligations are tracked, reported, and visible to avoid non-compliance-related penalties.
5. Reduces human errors
Manual contract management is prone to human errors. Mismanaged contract requests, negligence in redlining, missed signatures, and unorganized contracts are a few instances where manual errors result in chaotic contract management.
Using an AI contract management system helps eliminate human errors in the contract lifecycle. Artificial intelligence models like HyperStart CLM work with 99% accuracy, balancing efficiency and precision.
6. Increases contract visibility
Contract visibility is crucial for contracting professionals to understand and manage CLM performance. Visibility helps locate contracts, track agreements, streamline legal strategies, and nurture strong contract analytics for data-driven decisions.
AI-driven contract management processes help increase contract visibility by automatically processing large datasets into legal insights. Legal teams can leverage AI to track contracts throughout the organization and gain data-driven insights.
Drive Contract Success With AI
Create, find, and agree contracts 80% faster with HyperStart CLM. Our 99% accurate AI model helps streamline every stage of the contract lifecycle to help you focus on real business opportunities, not routine drafts.
Our 3 picks for AI contract management solutions
The SaaS market offers a wide range of AI-powered contract management software. However, not all software is created equal. Each platform has unique AI capabilities. Here are the top AI contract management solution options: HyperStart CLM, Ironclad, and Juro. Let’s take a look.
| HyperStart CLM | Ironclad | Juro |
99% accurate AI model 1 bn. + documents handled 80% less contract admin time 5x faster review and signing | Generative AI assistant Automated property detection for 194+ terms AI-powered playbooks | AI-powered drafting, reviewing, and summarization Turn contracts 90% faster |
| Know More | Know More | Know More |
HyperStart CLM’s AI capabilities in contract management
As an end-to-end contract lifecycle management tool, HyperStart CLM offers features for every stage. The fine-tuned AI model used in this CLM helps automate every function and streamline legal processes.
1. Extract contract metadata with 99% accuracy
Analyze and extract contact data points automatically with 99% accuracy using HyperStart CLM’s metadata extraction feature. After you import your legacy contracts from sources like Salesforce, Gmail, Google Drive, OneDrive, etc., the AI will automatically analyze them to identify and extract key terms for better visibility and tracking.
2. Never miss a renewal again
Hyperstart CLM leverages AI to help contract managers stay ahead of renewal deadlines. The platform tracks contract expiration and renewal dates through automated contract analysis. Renewal reminders help prepare for contract renewals to ensure you never miss them again.
3. Generate new contracts in 2 minutes
Streamline your contract creation process through AI and draft contracts within 2 minutes. Leverage HyperStart CLM’s features like smart intake forms and dynamic templates to convert contract requests into legally sound agreements. Use standardized templates to empower non-legal professionals to self-serve contracts.
4. Get to yes faster with redlining automation
With AI-driven legal review and redlining, accelerate the contract review process by 10x and reduce negotiation time by 75%. HyperStart CLM helps organizations improve contract negotiation and streamline their contract process through automation.
5. Track all contractual obligations effortlessly
Identify hidden risks, drive valuable insights, and ensure legal compliance with AI. HyperStart CLM helps track contract obligations throughout the entire contracting process. Generate alters for important obligations and avoid violation-related conflicts and penalties with counterparties.
These are a few ways in which HyperStart CLM leverages AI for contract management. However, despite AI’s vast potential and scope, a few factors must be considered when implementing AI contract management software. Let’s find out about these factors.
Contract AI You Can Trust
Automate and streamline contractual processes with HyperStart CLM’s smart AI. Realize revenue 75% faster.
Factors to consider when implementing AI in contract lifecycle management
Using AI for contract management certainly has its benefits. However, there are a few factors to consider when automating your contracting process. These factors are:
Output accuracy: Using untrained or less-trained natural language processing models may result in inaccurate output. Moreover, non-contract AI models often lack the contextual understanding of contracts and legal processes.
Data privacy and security: Using AI to manage contracts without proper cybersecurity mechanisms can compromise data security. The leakage of critical contract data increases business risk and is an important consideration.
Integration: AI contract management features work well when integrated with external systems like CRMs, HRMs, finance systems, etc. Consider your AI contract management solution’s configurability with other systems for holistic CLM efficiency.
Implementation: Implementing CLM software for managing complex contract workflows requires customizing the AI model. Standardized contracts, on the other hand, require less implementation effort.
These considerations help ensure the smooth implementation of AI technology in contract management processes. Now that you have all the information on AI-driven contract management, you can implement a CLM tool offering an automated solution for contract management.
Automate contractual processes with HyperStart CLM’s AI
Implementing AI in contract management requires choosing the right vendor with an advanced AI model. HyperStart CLM offers end-to-end solutions for automated, streamlined, and optimized contract management.
With a 99% accurate AI model and a record of handling over 1 billion contracts, HyperStart CLM is the right solution for all your contract management requirements. Book a demo today to learn more about how HyperStart’s CLM can help you streamline contract management.
