Introduction to Contract Analytics: Essential Guidelines

Enterprise contracts today are stored across multiple clouds and local systems which hinders the extraction of valuable and actionable insights from data, leading to inconsistency and non-standardization throughout the contract life cycle process. This lack of centralized visibility results in inconsistent commercial terms, difficulty in tracking contract performance, and challenges in detecting and negotiating exceptions. And this is the problem that Contract Analytics seeks to resolve.

Contract Analytics is a powerful GenAI-enabled solution that empowers enterprises to extract and analyze data from their contracts to derive valuable insights accurately, thereby helping in their decision-making process while preventing risks and revenue losses. Its contribution to streamlining CLM processes and mitigating risks cannot be understated.

Why Contract Analytics

Legacy CLMs are time-consuming, leading to cumbersome processes. The legacy model involves a legal team reviewing thousands of pages and making updates, adding annotations, and marking inconsistencies before emailing contracts to the concerned parties. The challenge here is the entire process entails repetitive tasks, viz. comparing obligations & liabilities, checking consistency and identifying specific clauses, waiting for contracts’ approval, sending/resending emails, etc., and prone to errors.  

Gen AI-powered contract analytics helps in addressing these issues effortlessly and efficiently. The analytics tool does the identification and categorization of agreements by specific type, extracts the exact provisions, and processes them in seconds with accuracy. Contract Analytics helps users drive intelligence across the contracting process, and gain actionable insights from the mountain of contracts they have, but otherwise, no way to figure out what those contracts contain. Thus, contract analytics facilitates time saving and cost- saving opportunities for stakeholders across the contract lifecycle.

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Contract Analytics: Must-Have Features

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Contract Analytics means driving intelligence throughout the contract lifecycle by extracting key data at each stage, e.g. review, analysis, and management. Contract analytics enables organizations to gain valuable insights into specific contractual terms, obligations, and risks. SimpliContract’s GenAI-capabled assistant, SimpliAssist, an advanced conversational data discovery tool, can help you get instant answers to all your contract questions in a comfortable, natural language expressly tailored towards the user’s persona.

These are some of the must-have features that a CLM with contract analytics should have:

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Centralized Repository

•       Unified storage for all contracts, accessible from a single platform.

•       Integration capabilities with various cloud and local systems.

Automated Data Extraction

•       AI-powered extraction of key terms, metadata, clauses, and obligations.

•       OCR (Optical Character Recognition) for scanning and digitizing contracts.

•       Generating reports.

•       Providing visibility on metrics, for instance, top 5 vendors, a number of amendments in a business unit, etc.

Managing Risks and Compliances

•       Risk analysis and redline suggestion.

•       Regulatory compliance checks to ensure adherence to industry standards and laws.

Analyzing Performance

•       Sell-side or buy-side, analytics helps in performance analysis against predefined KPIs for all contracts.

•       Insights into contract utilization and fulfillment.

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Version Control and Audit Trails

•       Maintenance of version histories for all contracts.

•       Comprehensive audit trails to track changes, access, and user activities.

Exception Management

•       Detection of deviations from standard terms and automatic notification for review.

•       Tools for negotiating and managing exceptions effectively.

Key Insights

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•       The CLM software market is estimated to reach US$ 3276.5 million by the year 2029.

•       The US holds the largest market share of 37% in CLM software including analytics.

          (LinkedIn/Absolute Research)

Contract Analytics:  Process

A good contract analytics has these processes in-built within it:

Step#1. Data Capture: Involves ingesting data from various sources including cloud and local systems.

Step#2. Data processing: The analytics tool helps extract data from large volumes of structured/unstructured data related to specific contracts, and eventually organize them accurately.

Step#3. Data Storing: Involves the storing of the processed data.

Step#4. Data Analysis: Involves leveraging of data points such as contract terms & conditions, clauses, etc. to analyze and extract valuable insights from them with greater accuracy and efficiency.

Core Benefits of Contract Analytics

Enhancing Contract Process

•       AI-powered contract analytics extracts data and derives valuable insights that help in the decision-making process across the contract lifecycle.

•       Insights can identify challenges in agreements, what terms could pose hurdles in negotiating, and so on.

•       This deep analysis of data and extracting information to speed up your decisions leads to enhanced contract outcomes and processes.

Seamless Data Analysis

•       AI-enabled contract analytics helps locate specific clauses, terms, and just any data required, accurately an efficiently.

•       Instantly recognizes patterns and uncovers deviations, if any.

•       Offers you recommendations, and suggestions for your productivity. Upon seconds, the analytics can fetch you with desired results.

Preventing Revenue Leakages

•       Contract analytics allows standardization across the contract lifecycle of all contracts.

•        It flags off variations occurring in terms, phrasing, and terminology by sending alerts to legal teams regarding potential risks.

•       Facilitates a smooth negotiation process leading to closing deals faster.

Analytics Above Par: SimpliContract’s AI-Contract Analytics

SimpliContract provides an advanced AI-powered No-Code contract analytics platform that can seamlessly integrate with your existing applications like SAP Ariba, Coupa, Adobe Sign, ServiceNow, etc. It provides highly intelligent, actionable insights for your smooth contract operations across the lifecycle.

SimpliContract’s AI-intelligence-powered contract analytics analyses your contracts uncovering critical data, providing actionable insights across:

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Commercial terms, such as, payment terms, volume commitments, price indexations.
Legal terms, such as indemnity, data privacy, and liability.
Performance metrics, such as KPIs, obligations, and SLAs.

SimpliContract’s AI-powered Contract Analytics platform is the One-Stop Solution to your problems. The highly capable advanced AI engines, personalized AI models are specifically meant for myriad use cases across industries.

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AI-Powered Data Extraction & Analysis Enables-

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1. Metadata, obligation, and clause extraction:

•  Gain visual insights across vendor & customer data to identify and standardize terms

•  Be proactive as you get timely notifications, reminders

•  Drive control, compliance in downstream PO, invoicing systems

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2. Risk Analysis:

•  Amend risk clauses and alleviate risk exposure

•  Negotiate better terms upon renewal

The Risk Analyzer Tool: How it works

The Risk Analyzer starts by reviewing each document line by line, identifying clauses that do not align with the company’s best practices. It then compares these clauses against a clause playbook or benchmarked terms.  

Upon completion, the Risk Analyzer presents a scorecard view that displays risk values for each clause. It also goes one step ahead and offers redline suggestions and AI-generated insights to mitigate the risk found in those clauses, which are particularly useful for upcoming renewal events or amendments.

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3. SimpliAssist, the Next Gen-AI Data Discovery Assistant: 

Ask SimpliAssist anything within and connected to your contracts in conversational language. Get instant, accurate answers based on context with citations. For example, ask about:

•  Prevailing terms

•  Legal precedence

•  Clause comparisons across terms

•  Incorporating references

•  Follow-ups, etc.

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Bottomline

The GenAI-enabled contract analytics helps with actionable insights and streamlines operations from pre-signature to post-signature phases in the CLM journey. Contract analytics can save your enterprise from revenue leakages and maximize growth opportunities. What more, you can seamlessly integrate contract analytics to your existing CLM repositories (Ariba, Coupa) and other applications. Our dedicated CLM expert can guide you from scratch. Contact us and leverage Contract Analytics to the full potential enhancing your CLM journey.