Contract Repository Management: How To Transform Your Strategy
Companies often make the common mistake of storing contracts in emails, offline file servers, and other enterprise IT systems. This prevents them from gaining the visibility they need. With AI, companies can digitize, store, and mine contracts for intelligence, enabling them to always stay on top of their commercial relationships.
Read on to learn how you can transform your contract repository management strategy!
What is a contract and how do you manage it?
A contract is defined as a promise, protected by law. History has witnessed many a contract signed upon, amended, adhered to, and even broken. Every organization across the globe signs myriad contracts, with several players in the mix, such as vendors, employees, contractors, manufacturers, service providers, suppliers, clients, and so on.
Contract management is not an easy task. Nearly a decade ago, the International Association for Contract & Commercial Management (now World Commerce & Contracting) analyzed that businesses lost over 9% of their bottom line due to poor contract management. This is a significant number for any business. With new technologies emerging each day, the leap from management to automation necessitates a strong and robust contract management system, with the capability to create, manage, and measure contracts.
Contract repository management: The first step in CLM
In an ideal world, contracts are a collaborative process in an organization. However, in the real world, contracts are authored manually in silos, and often negotiated with very little insight into past performance and risk metrics. Once a contract is signed, storage becomes the next important step. A common mistake companies often make is to store them among emails, offline file servers, and other enterprise IT systems, with little to no access to contract managers or other stakeholders.
Once they are signed, contracts turn into static repositories of mission-critical data, which are difficult to retrieve or interrogate on demand and edit in bulk. In the absence of a single source of truth for templates, clauses, variations, business rules, and associated artifacts, it could become increasingly difficult to control risk and maintain a single standard for contracting across the enterprise. Contracts cannot be stored in a suitcase with the key thrown away; they are live documents that need nurturing and monitoring.
Give your contract management a strategic edge with AI
While contracts are the cornerstone of every commercial relationship, they sometimes aren’t mined enough to draw insights for business goals. Why does this happen? When contracts are tucked away in a repository, the organization may not have the tools to mine for insights. Your repository may be sophisticated, but manual searches are time-consuming and costly, especially if the data is needed to support time-bound negotiation strategies, assess portfolio risk, or generate the insights needed to draw up stronger contracts.
Through Sirion, you can bring your offline contracts online, digitize and mine them for intelligence to de-risk your existing portfolio, and sign smarter agreements. The platform has a wide range of out-of-the-box connectors that integrate with your enterprise IT environment and pull in legacy contracts stored in these silos.
And that’s not all!
Sirion’s Artificial Intelligence (AI) engine automatically digitizes them and extracts key information such as contract metadata, clauses, obligations, service levels, and rate cards, which are then stored in a cloud-based centralized repository to enable on-the-go access and deep analytics. The Machine Learning (ML) engine, armed with new knowledge with each contract, assimilates the contract structure and taxonomy, further enhancing the platform’s analytical capabilities.
With AI at your core, Sirion CLM gives you deep insights into your performance and the risk parameters. This becomes the foundation that empowers you to author and negotiate smarter contracts in the future. ML models can be trained to recognize and extract custom-defined fields, in multiple languages and from across industry domain-specific documents, enhancing the extraction capabilities with each new contract.
Contracts are an essential tool to build growth and resiliency for your organization. Contracts span across several stakeholders and are critical across business lines. When the organization understands its contracts well, and derives insights that facilitate business, the value derived from the contracts will be multiplied.