Among the many ways in which artificial intelligence (AI) technologies are enhancing business functions, the inefficiencies and labor-intensive organizational aspects of the contracting process present many fertile opportunities for improvement through the application of AI. A recent article in the Harvard Business Review discusses the contracting challenges current AI technology can help to alleviate and the contracting process changes required to adapt to AI contracting tools, as well as understanding the limits of AI.
Dealing with Contract Volume Using AI
As the article notes, one of the most significant contracting challenges facing organizations is managing a high volume of agreements. Even with a centralized database for contract documents, organizations often have no efficient way to extract data from those contracts or see, for example, how a warranty clause is worded across a number of different customer agreements. AI software tools can extract that data from contract documents and clarify and organize content, which can help organizations contract more efficiently and manage existing contracts more effectively.
Tracking and Enforcing Contracting Language Standards
Another significant challenge in the contracting process, especially for high-volume customer or vendor contracts based on standard templates, is ensuring conformity to template language and efficiently tracking deviations from form language. For instance, if an organization is seeking to impose uniform contract terms around the use of company trademarks and trade names, AI software tools can help track that language across divisions and could be configured to recognize keywords that indicate the trademark usage language is needed in a contract.