Contract Lifecycle Management (CLM)

Seamlessly manage contracts from creation to execution with AI.

AI-driven Contract Lifecycle Management (CLM) encompasses the entire process of contract handling, from initial drafting and negotiation to execution, compliance tracking, and renewal. This holistic approach uses AI to automate contract generation, identify key terms, monitor obligations, and alert users of upcoming deadlines. CLM reduces the administrative burden on legal teams and ensures that contracts are managed efficiently and in alignment with corporate policies.

How:

1. Evaluate Current Contract Management Systems: Determine which stages of the contract lifecycle are most in need of optimization.
2. Select a Comprehensive CLM Platform: Choose a platform that integrates AI with features such as automated drafting, e-signatures, and performance tracking.
3. Configure for Custom Workflows: Customize the CLM tool to align with the organization’s contract policies and workflow requirements.
4. Data Migration: Import existing contract data and documents into the CLM system.
5. Automate Contract Templates: Create standard templates for common contract types, embedding AI for clause selection.
6. Integrate with Third-Party Tools: Ensure the CLM system links to ERP, CRM, and other enterprise software.
7. User Training: Conduct comprehensive training for legal, sales, and procurement teams.
8. Launch and Monitor: Deploy the system and establish feedback loops for continuous improvement.
9. Ongoing Review and Optimization: Periodically review system performance and update the AI to adapt to new contract types and legal changes.

Benefits:

• Streamlines contract creation and reduces manual errors.
• Enhances collaboration between different teams and stakeholders.
• Increases contract visibility and compliance tracking.
• Saves time and resources by automating routine processes.
• Minimizes missed deadlines and improves renewal management.

Risks and Pitfalls:

• Initial integration may disrupt existing workflows.
• Potential data migration challenges, especially with legacy contracts.
• Requires continuous updates to adapt to changes in contract law and business needs.
• User resistance due to the learning curve associated with new technology.

Case Study: Retail Chain Transforms Contract Management with AI A major retail chain with operations in over 15 countries implemented an AI-powered CLM system to manage vendor contracts. The new system automated the generation of contracts, tracked obligations, and flagged upcoming renewals, resulting in a 50% reduction in contract processing time. The chain also saw an improvement in compliance rates, avoiding penalties related to missed deadlines.

Remember! AI-powered CLM is an effective way to manage contracts at scale, ensuring process efficiency and compliance. While the implementation may require significant initial effort, the long-term benefits outweigh the costs.

Next Steps:

1. Map out your current contract processes and identify automation opportunities.
2. Engage with CLM solution providers to explore customizable features.
3. Develop a robust onboarding plan to minimize user disruption.
4. Regularly review the tool’s performance and refine processes to maximize efficiency.

Note: For more Use Cases in Legal and Compliance, please visit https://www.kognition.info/functional_use_cases/legal-and-compliance-ai-use-cases/

For AI Use Cases spanning Sector/Industry Use Cases visit https://www.kognition.info/sector-industry-ai-use-cases/