Contract management continues to evolve as the technology and tools involved improve and new features are introduced. One recent change that has already had a tremendous impact on legal teams is the introduction of artificial intelligence, which offers the ability to immediately extract actionable data from corporate agreements, among other benefits.

AI contract management is most likely to benefit industries with highly routine, template-based contracts such as healthcare, government, and manufacturing -- but as the technology continues to evolve, many other sectors will also benefit.

Most businesses wisely invest a great deal of time and effort negotiating contracts they believe will best mitigate their contractual risks. According to benchmarking data from the International Association of Contract and Commercial Management, the investment of time and resources for negotiating and reviewing simple contracts averages $5000, while high-complexity agreements, which can involve extensive back and forth negotiations, cost $40,000 on the low end and $200,000 on the high end.

While this may seem like a steep up-front investment, it’s a smart one. From delayed deliveries that can slow or even derail important projects to compliance violations and resulting fines, important business arrangements can be rife with risk – and the legally-binding framework of a contract is an important tool for proactively reducing risk exposure.

At ContractWorks, our employees come from a variety of experiences and backgrounds, each with a unique set of skills and talents that align with our overall mission of providing simple, smart document management solutions.

We’re proud of the team we’ve assembled, and we think it’s about time you get to know the people that are innovative, agile, and committed to fulfilling the needs of our customers.

This month we’re catching up with Curtis Worden, a Sales Development Representative at ContractWorks. With previous experience in sales and teaching abroad, Curtis brings a unique skillset to the ContractWorks team.

Spend a little time reading up on contract management and you’ll undoubtedly come across this stat: good contract management can improve corporate profitability by nine percent of annual revenues. Flipped the other way, this figure, as reported by the International Association for Contract and Commercial Management, shows that poor contract management is costing companies significantly every year.

How can poor contract management erode company revenues and profits? There are numerous things that can occur throughout the contract lifecycle that can reduce value in big ways and small:

When it comes to implementing new technology, it’s often tempting to ignore the practical applications of the technology or determine if it actually addresses relevant challenges and focus only on the bells and whistles. Rather than asking, “What is our AI strategy?”, legal departments evaluating the potential upside of AI-based tools should consider the core challenges their legal teams face when managing the lifecycle of corporate contracts. 

There are certainly plenty of ways that AI tools can benefit your contract management process, especially for businesses dealing with a large volume of contracts, but it’s always best to evaluate your challenges and identify areas of opportunity before investing too much time into new technology.

There are a host of consequences when a construction project doesn’t go as planned. A single delayed shipment of supplies can cause further work interruptions, resulting in cost overruns and other issues, while compliance failures can create a slew of other problems. But because all of the relationships within construction projects are guided by contracts, effective contract management can be an important tool for making sure everything happens the way it’s supposed to.

Contract management is an organized and systemic approach to ensuring that all aspects of a contract, from deliverables and delivery dates to part and supply specifications, are adhered to during the contract term. In construction, careful contract management can help to ensure that every aspect of a build goes according to plan, and also help to reveal potential problems before they run the risk of derailing a project altogether. It is also key to keeping costs in check.

Though the terms ‘contract management’ and ‘contract administration’ are often used interchangeably, they are not exactly the same thing. Contract management refers to the full spectrum of contract-related activities that occur within your organization, encompassing everything from the earliest stages of planning your approach to contracts in general, to drafting and negotiating agreements, to finally winding down and evaluating the performance of individual contracts after they have concluded. Contract administration, meanwhile, refers to a very specific phase within a contract’s lifecycle, kicking in during the post-award phase of your contract. More specifically, contract administration refers to the processes and procedures that must occur in order for business units to implement and manage a specific agreement after it has been finalized.

While contracts are an important tool for ensuring that you achieve the desired outcomes from your business agreements, the document itself is only half the equation. Getting the full value out of your contracts requires more than just a well-crafted agreement that clearly spells out deliverables and/or services and related terms and conditions and that has been signed by all parties. A strong, properly-executed contract is essential – but equally so is a contract monitoring plan that ensures that all obligations are met as specified.

Have you ever wound down a deal with a customer and wondered if you had inadvertently left any money on the table? There’s a good chance you have: research from the International Association for Contract and Commercial Management (IACCM) found that on average, businesses could improve revenues by nearly 10 percent simply by strengthening contract management practices.

It’s no secret that Artificial Intelligence (AI) is making a huge impact on a variety of industries and disciplines, and contract management is no exception. Contract management has historically been a very manual process, but software has been able to automate much of that manual work in recent years. The addition of AI is now making contract management simpler and more efficient than ever, which is paying significant dividends for legal teams of all sizes.