With Analytics and contract management that can benefit firms of all sizes to handle contracts more productively, some businesses are still unwilling to give a solution a deep look. According to Gartner, firms using advanced contract analytics and contract management analytics technologies will reduce their human contract review work by half by 2024.
Some companies are hesitant to employ analytics over contracts due to a few widespread misconceptions about them.
A few contract analytics myths may be standing in the way if you’re having trouble managing your contracts efficiently. Here are some common misconceptions about using contract analytics right from contract signing along with the actuality to help you revise your viewpoint.
Myths
Contract Analytics suits only for voluminous contract maintenance
MS Word, emails, shared drives, spreadsheets, and other manual solutions might initially seem to be enough for maintaining contracts with small businesses. But these solutions still face compromises in terms of security, accountability, and compliance.
According to the American Bar Association, “By the finding of the Institute for Supply Management, a typical Fortune 1000 company manages between 20,000 and 40,000 active contracts at any given time, of which at least 10% are lost, hard to discover, or otherwise mishandled or forgotten”.
Organizations will benefit from investing in contract analytics which will enhance workflows, lower costs, free up time, and boost ROI. Be the firm maintains manageable contracts or voluminous documents, it will be beneficial for them to include analytics over their contracts for managing them.
Contract management with AI is expensive
Many still believe that incorporating any new technology into their business is expensive. But a firm with clear requirements and needs can cut down costs largely by having this preplanned workflow.
If you are clear on your requirements and budget, there are numerous ways to decrease the costs such as partnering with offshore vendors, using a step-by-step process to implement AI..etc.
With many niche technologies implemented by firms, many have benefited from using AI. AI is a preferred technology by many firms because rather than the initial deployment charges it provides them with several benefits.
Firms may quickly go through and analyze the valuable data present in enormous repositories through an AI-powered Contract LifeCycle Management platform. Contract intelligence which is Contract Analytics combined with AI delivers insights at incredible speeds. Businesses can gain a variety of advantages by switching from managing contracts to analyzing contracts, from finding hidden cost-saving opportunities through Contract Analytics.According to an HBR Study, effective AI programs can assist in increasing contracting efficiency, reduce annual income, and prevent transactions from losing up to 40% of their value.
Monitoring contracts is challenging
Though managing limited contracts can be made easy by human power, it could be cumbersome if contracts are huge in volume.
Firms can deploy several employees for tracking and managing contracts. But rather than using human efforts, firms can simplify managing contracts with the help of Analytics. Contract business analysis repository, version tracking, audit tracking, and logging, vendor compliance tracking help in easier monitoring of contracts. The mentioned features aid in securing and easier managing contracts.
Different types of contracts can’t be brought under a single storage
Companies turn to less effective contract management systems when there isn’t a centralized repository. For instance, filing cabinets, binders, or folders are frequently used by firms as a basic contract repository. Others may decide to use digital storage choices that weren’t created with repository needs in mind such as Digital PDFs, email attachments, Microsoft Excel, and Google Sheets.
Contract repositories that provide cutting-edge capabilities for managing the contract portfolio are a feature of modern contract management solutions. You have a vast repository of information to consult whenever you need it by collecting all of your contracts, past, and present, in one location.
A company’s contracts may be instantly searched with Google-like searches from any computer with an internet connection by keeping all documents in one central location.
The organization’s contract management procedures can be significantly impacted by a centralized contract repository. Contract repositories are successful in increasing productivity and lowering the amount of time businesses spend looking for contracts. Additionally, firms may completely manage who has access to the contracts. The technology allows for an unlimited number of users, but the organization can decide who gets permission. Finally, additional security is offered.
Searching for specific clauses is not possible
With several ways to manage contracts, many fail to note that there are also methods to grasp and easily search for particular phrases in a contract. Many firms still have a notion that searching for a specific phrase in a voluminous contract can take time. But the reality isn’t so…
Through the use of optical character recognition (OCR), text from any document, including JPG and PDF files, can be analyzed and converted into a format that can be used by a computer or other machine. OCR technology enables computers (or other machines) to read and export data so that users can locate it without having to actively search making it easy for them.
Thus firms can do intensive and advanced searches and filtering of their contracts easily with niche technologies.
Conclusion
It is time for you to improve the management of your contracts using effective solutions now that common misconceptions about contract analytics have been dispelled. For any of your Contract Analytics deployment needs and to know more on this, reach out to [email protected].