What is your company’s main focus for the future?
Commonly adopted business strategies like improving cost-efficiency, reducing risk, or optimising operational efficiency are limited by manual processes.
Processing contracts manually can take a lot of time and, due to human nature, are likely to encounter man-made errors. These could be errors within the contract write-up, which could jeopardise the company’s position within that contract, or important topics of negotiation could be missed.
The average Fortune 1000 company is likely to have around 40,000 active contracts processing at any given time, which will require proposals, reviews, negotiations, and approvals to take place for each contract. Managing these processes manually is no longer an option for global supply chains, as their contract procedures need to move as fast as they do.
Implementing AI into contract management
As artificial intelligence (AI) cements its place in everyday life, it is becoming more popular for its use in contract management. From the initial contact between businesses to signing on the dotted line, AI is soon to become embedded into all procurement processes.
Managing time efficiency
The capabilities of AI in procurement are changing daily. While businesses can leverage technology for menial tasks, it can also be utilised for authoring contracts, analysing their success through data analytics and mapping out further contract proposals. AI can scrub through thousands of documents in a matter of seconds and select all of the relevant information required in the final agreement.
Following the point of signature, eProcurement platforms will analyse the success of the agreement, which can generate time savings of around 30 - 50% per contract, allowing teams to focus on sourcing new suppliers and taking further actions towards their procurement strategies. According to Simon Thompson, Sales Director at JAGGAER, ‘one company working with JAGGAER and Edgeverve saved time equating to over 1.5 full-time employees, allowing them to instead dedicate that human power to more strategic efforts and push the organisation forward’.
For a risk management strategy
It’s important to consider the risks involved in all stages of contract management. Investing in AI provides faster analysis of the language used in a contract and cross-referencing that with similar contracts to predict how successful the contract will be. Thanks to machine learning, the datasets that technology consumes are growing faster than ever as new information can be absorbed instantaneously.
‘This is where the value of better decision-making becomes a reality. The platform can digest more information about your suppliers and contracts than humans possibly could. It then provides your team with recommendations to minimise your risk more than you could on your own. This drives tangible bottom-line results, with an average of 3-18% risk reduction for those who adopt an AI-driven contract analysis tool’, says Thompson.
AI has certainly proven its worth in the supply chain industry. To gain more insights into JAGGAER’s procurement and supply chain applications, catch Simon Thompson at Procurement and Supply Chain LIVE!
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To find out more about JAGGAER’s contract management solution, click here.