Digitalization has brought about far-reaching changes in numerous business areas, particularly through the use of advanced technologies such as artificial intelligence (AI). In the area of contract management, AI is helping to make processes more efficient and accurate. An analysis by Goldman Sachs has shown that the use of automation in contract management can speed up negotiations by up to 50%. Thanks to AI technology, contract content can be analyzed precisely and quickly, leading to well-founded decisions and optimized use of resources.
Contract analysis is a key step in contract management. It is used to systematically record the content and details of a contract. As technology has advanced, particularly in areas such as artificial intelligence, the way in which contracts are analyzed has also evolved. AI-supported contract analysis uses technologies such as natural language processing (NLP) and machine learning to analyze and evaluate the entire contract text and break it down into its individual components. Such modern tools are able to precisely identify and categorize specific contract details - be it deadlines, obligations or other relevant aspects. The result is a quick and comprehensive insight into the most important contract information, which considerably facilitates and optimizes contract management .
While current AI tools already add significant value to contract management, the next generation of the technology is about to hit the market. It will further deepen the possibilities of data analysis and interpretation.
Future AI-based tools could revolutionize contract management by not only processing but also analyzing large amounts of data in detail. These advanced tools will be designed to recognize complex patterns in contract data. This capability will be particularly useful, as patterns can often provide insight into recurring themes or potential risks in contracts.
In addition, future AI will be able to detect unexpected anomalies. For example, it could detect unusual clauses in a contract or identify deviations from standard contract terms. Spotting such anomalies early on will be critical to identifying potential problems and taking appropriate action. The end result will be streamlined contract management, leading to faster, more accurate and more cost-effective outcomes.
In the future, AI-based contract management solutions could combine numerous functions and processes on a single platform. They would combine different tools, eliminating the need for users to switch back and forth between different applications to review or edit contracts. This results in significant time savings and increases efficiency. In addition, these future systems would provide quick access to relevant contract information and could even generate automated responses. This simplifies and speeds up the response to contract-related inquiries and requests.
AI-driven contract software could provide users with tools that ensure consistency and uniformity in contracts. A key feature could be predefined templates that are generated based on data analyzed with Natural Language Processing (NLP) to provide standardized terms and clauses. Users could use these templates to ensure consistency when creating new contracts. In addition, the software could provide a deviation detection function. If a user enters or uploads a contract that deviates from the standard wording, the software would automatically recognize these deviations and alert the user. This would allow variations in contract clauses to be tracked effectively. When deviations or potential errors are detected, the software could make automated revision suggestions. This would not only help to minimize human error, but also ensure that the contract meets company standards. This would allow companies to effectively track and standardize variations in contract clauses and minimize the risk of human error and inconsistencies.
AI-powered software easily scales with a company's growing needs compared to limited human capacity - without the cost of additional staff. Whether a company has 100 or 10,000 contracts to process, a future AI-powered solution can handle the task with ease. This gives companies the flexibility to adapt to changing business needs without investing in additional resources or training.
ContractHero uses AI technology to automatically extract essential contract data from the documents. The AI identifies and extracts specific data such as the name of the contracting party, relevant term and termination dates and financial details, such as monthly payments. Once this data has been automatically captured, it is entered directly into the corresponding fields in the system. ContractHero thus offers users a comprehensive database that they can add to as required. This saves valuable time and reduces manual effort by pre-filling most of the required information. If you are interested in the potential return on investment when implementing ContractHero, we invite you to take advantage of our ROI calculator.
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Digitalization, particularly through the use of AI, has fundamentally changed contract management. Traditional methods, which are time-consuming, error-prone and often not scalable, are being replaced by efficient, accurate and scalable AI-supported processes. AI technology not only enables contracts to be analyzed quickly and thoroughly, but also reduces human error and promotes the understanding of complex content. Solutions such as ContractHero use this technology to optimize processes around contracts through AI-based contract analysis and help companies save valuable resources. One example of this is the company hhpberlin, which was able to realize savings of EUR 100,000 in its first financial year thanks to ContractHero's contract management software.
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