Contract Management Software is being implemented by businesses at ever-increasing rates, as the benefits of automation within a Contract Management system become clear. A growing emphasis on globalised markets, combined with fluctuations in world economics, accentuates the need for scalability as well as increased efficiency. It is now more important than ever to ensure your operation has the resources to pull ahead of your competitors and maximise the value of your contract collection. This is because your contract collection is the goldmine of your business, containing everything your enterprise needs to streamline your day-to-day processes and expand your profit margin.
The reason Contract Management Software is now such a widely accepted solution, is because it uses elements of Artificial Intelligence to achieve its goals. Contract Management Software platforms, including Symfact, succeed because they provide a high degree of automation. These processes are the jewels in the Contract Management crown, as they allow for both increased speed of approvals, and effective risk mitigation through reduced reliance on human input. Workflows, reporting, and notifications systems all function through automated processes, made possible by the field of Artificial Intelligence.
With such technological advancements already successfully embedded in our business operations, it is important to look ahead to how further innovation may impact our Contract Management systems. The field of Artificial Intelligence is broad and encompasses everything from self-driving vehicles to voice-activated virtual assistants, in homes and digital devices. All of these varied applications are designed to eliminate or reduce the burden of manual tasks on humans, and use different approaches to achieve this, including probability, statistics, and language processing. For the purposes of Contract Management in business, the area of Artificial Intelligence that is most relevant is Machine Learning.
What is Machine Learning, and how does it relate to Contract Management?
Machine Learning is a particular type of Artificial Intelligence that creates new algorithms, which can then improve automatically through experience. That means, the more data the system is given, the more it refines its processes. This type of Artificial Intelligence is ideal for the management of a business contract collection, because such a library is essentially a large data set that is consistently expanded with the addition of new data, from new contracts.
While Machine Learning is itself a division of Artificial Intelligence, it can be further sub-divided into three distinct categories, characterised by the nature of the data being processed.
- Supervised Learning – Humans map, label and input all data, from which the computer learns as it processes.
- Semi-supervised Learning – Humans map, label and input some data, while other data is analysed and classified by the computer.
- Unsupervised Learning – The data is processed by the computer only, including mapping and classification.
When we first implement Contract Management Software, we create a centralised Contract Repository, and the entire contract library of the business is stored within this single location. The purpose of this is to transform an otherwise scattered, disparate collection of legal documentation and agreements into an actionable data set, that can be searched, analysed, and reported from to a granular level. This type of data storage, analysis, and use allows for Supervised Learning, with the information from new contracts added to the system by humans, ready to be processed by the computer in a way that allows it to refine that information over time.
That Supervised Learning already helps businesses move toward greater efficiency, simply by gathering all contract data together. But, Contract Management Software platforms also provide a facility for the creation of a library of standardised contract templates, clauses, and languages, which takes the system a little closer to incorporating Semi-Supervised Learning. Pre-approved items can be automatically included in the contract, according to the type of agreement being made, and metadata, labels, and classifications can be automatically assigned as necessary – learned from the templates previously created and stored. Efficiency and speed are further enhanced.
Looking deeper, Contract Management Software also uses the Machine Learning aspect of Data mining in its customisable reporting feature – enabling businesses to identify patterns within the large data set of the Contract Library. This is also incorporated in the use of predictive analytics, as the system combines data mining, modelling and Machine Learning to perform analysis of current and historical data, for the purpose of making predictions. This is an effective risk management strategy, as it applies information learned from data analysis to determine the level of risk associated with a contract or third party.
Preparing for future innovation
By examining the features of Contract Management Software in the context of Machine Learning in this way, we can see that technological innovation has already, over time, extended the application of this division of Artificial Intelligence to a number of vital features within the platform. This makes the implementation of Contract Management Software the very best preparation any business can make for future innovation.
With such a platform already in use, the expansion of Machine Learning features becomes a much smoother process. We can expect such expansions to favourably impact contract review processes in particular, improving the ways in which Contract Management Software draws correlations between clauses, terms and conditions, and the way in which it recommends optimised language for inclusion in new contracts.
It is vital, therefore, to maximise the opportunities presented to your business by Contract Management Software, such as Symfact, in order to be fully prepared for the inevitable expansion of Artificial Intelligence and, most specifically, Machine Learning. This can be achieved through the careful management and expansion of metadata throughout your Contract Library, and the further expansion of your standardised Contract Template Library. Having a comprehensive, well managed, efficient Contract Repository is the key to fully and quickly embracing innovations in Machine Learning as and when they arise, and therefore is the key to pulling ahead of your competitors and expanding your profit margin. Contact Symfact today to discuss your Machine Learning readiness, and book your free software demonstration.