If you own a smartphone, shop online, or chat via messenger with a customer service rep — congratulations, you are a user of artificial intelligence software! Voice recognition and search assistants (like Siri or Alexa) are available on 3.9 billion Apple, Android, and Windows devices being used worldwide. Over 4 billion people globally are using messaging apps.
The White House released a report in 2016 on the current state of AI and its potential to help address major challenges society faces. For example, the report mentions how the Department of Veterans Affairs is using artificial intelligence software at Walter Reed Medical Center to make more accurate predictions of medical complications and improve the way combat wounds are treated, improving patient outcomes. Other applications noted by the White House report include the use of AI to improve urban traffic management, tracking of animal migration, and reduce the number of school dropouts. There is virtually no aspect of society that isn’t being influenced by AI. The way we live, connect and search on a daily basis is completely transforming- and it’s just the beginning.
Into the Future
Changing the way we use technology on a personal basis also means enhancing the way we do business. Integrating artificial intelligence into the workplace holds untold potential to increasing efficiency, certainty, and productivity in our work. We’re already seeing the advantages of AI in customer service, for example. While human interaction is still required to a certain extent to ensure that customer service sounds and feels human, there are plenty of cases in which customers can get the answers they need by interacting with bots. Automated systems can provide instant answers to common questions, and intuitively determine what customers will need and solve problems.
What Does Artificial Intelligence Mean for Contracts Professionals?
We’re already seeing artificial intelligence software improving a wide range of business functions in two key ways: Automating certain repetitive tasks and enhancing human capabilities. While automation is often associated with manufacturing, and the use of “robots” to manage basic repetitive tasks, in the realm of contracting, contract management software with AI functionality streamlines the process of drawing up contracts.
The Exari platform includes an intuitive interviewing function that presents relevant clauses based on answers provided by the user. The smart software automatically evaluates answers and selected clauses, and alerts to potential issues and conflicts. Not only does this make the contract drafting process faster, it also removes some of the guesswork and potential for human error that could cause potential problems down the road.
For example, when using an AI-enabled contract lifecycle management tool to develop a contract with a company outside of the U.S., the program will automatically inform the author that the contract needs a currency fluctuation clause. This information is based on the context of the contract; not only does the context of this contract dictate the appropriate clause, but future contracts with similar characteristics will also receive the same recommendations.
Even further, users can help expand the knowledge base of the tool to make it more effective going forward. Case in point? While CLM AI might notice the name of a foreign city (like Paris, Texas or Athens, Georgia) in your contract and recommend clauses for foreign contracts, the user can correct the error and “teach” the machine to recognize the difference between the two locations for future contracts.
However, AI doesn’t only streamline the contract development process. We are also seeing it rise up in the contract management space, making data extraction painless for legacy contracts and providing faster and better insights into contractual data. Data extraction technology uses advanced algorithms to turn contracts into data, providing unparalleled insights into your existing contracts — and predictions for future contracting. Rather than spending weeks or months analyzing existing contracts to glean insights that may be skewed at best (and inaccurate at worst), contract management AI can quickly extract relevant data, letting your team spend more of their valuable time on analysis, and less on investigation.
Better Management of Contracts
Last, but certainly not least, AI supports better management of contracts. Contract management is often a stumbling block for companies: deadlines are missed, terms aren’t met, or renewals are forgotten or automated. Poor management has the potential to cost companies millions of dollars annually, but as the number of contracts increases, so does the complexity of managing all of them.
AI-equipped CLM software can help monitor compliance and trigger specific actions based on the treatment of contractual obligations. For example, if a customer fails to make an agreed upon number of purchases before a deadline, the platform can automatically assess a penalty. If a contract is up for renewal, CLM will automatically notify both parties. However, where AI really comes into play is in the realm of risk management.
By evaluating the data collected on contract performance, machine learning-capable CLM software can develop better algorithms. It will learn from contract performance, both positive and negative, and create better risk profiling tools based on real-world performance — all without human interaction. Some predict that eventually these tools will even be able to glean insight from other factors, including social media sentiment, to develop better risk profiles and improve contract negotiations. In short, AI is going to change the way contracts professionals work on a day-to-day basis, ultimately affecting both their business and their career.
So, what are you doing to get ready for AI? The time is now to develop a plan to take advantage of this game-changing technology, with AI-based contract lifecycle management technology. Stop by our booth at the 6th Annual Operational Excellence in Insurance to hear more about our AI technology is being leveraged by some of the top insurance companies globally to streamline and manage their policy generation.