For decades, many organizations have been dependent on manual systems to keep all of their contracts and agreements organized but are currently experiencing a revolution.
FREMONT, CA: Contract management is the process where contract creation, execution, and analysis is done. As organizations are looking forward to reducing risk and enhance their operational efficiency, contract management has deviated from a back-office conversation to a way of gaining competitive advantage. However, due to the advances in technology, contract management software has reached a point that it is too risky and expensive for organizations not to adopt a software-based contract management system. Contract management solutions provide a compelling opportunity to automate critical processes throughout the contract lifecycle, capitalizing on innovations in contract generation, collaboration, workflow, e-signature, and analytics. Here are the top three trends to look forward to in the future.
Smart contract code automates the performance of crucial aspects of agreements based on data inputs—whether from internal or external systems. A myriad of use cases ranges from automatically applying volume discounts for purchases from critical suppliers, frequently confirming credentials or eligibility for employees and contractors, and calculating and issuing the payments based on factors like shipping needs or SLA fulfillment. The most exciting part witnessed is the growing recognition that a smart contract code does not need blockchain and can be embedded in traditional legal contracts. The advent of cloud-based “smart legal contracts” has shown that enterprises can start reaping the benefits of contract automation.
Stepping into the decade of data privacy, the CCPA became active at the beginning of the year, GDPR is into its second year, and a mixed patchwork of the US state privacy laws is emerging. Organizations realize that compliance isn’t a one-and-done effort, but an ongoing commitment to facing the inconsistent standards and a high risk of state attorney general enforcement and class actions for data privacy breaches.
Organizations have to be well aware of their agreements, whether to address data privacy, uncover capital opportunities, inform negotiations, or prepare for changing trade relationships. Contract AI that intelligently converts text into clauses and concepts that can be searched, filtered, and compared will eventually become a must. But the most promising change to rethink the contracts as modular, digital entities right from inception, informed by all that’s gone before. This represents leveraging of the lessons surfaced by contract AI to make all of an organization’s agreements and agreement processes, smarter than before.