ContractPodAi is a Business Reporter client.
As companies navigate today's rapidly evolving business landscape, a familiar saying comes to mind: innovate or stagnate. Artificial intelligence (AI) has emerged as a transformative force, with 64 percent of companies express optimism. on its role in boosting productivity. This statistic serves as a barometer of the growing trust that companies are placing in AI.
Generative AI, in particular, is emerging as a practical and invaluable tool to optimize contract management and directly impact business performance. Here are three ways Gen AI in recruiting can improve your results:
Provide greater productivity
Respondents to a survey of legal departments across industries reported that implementing a CLM with generative AI capabilities can lead to significant increase in efficiency, and that technology can reduce delays in signing contracts caused by staff shortages and heavy workloads. Additionally, internal delays are mitigated by almost 10 percent, demonstrating the immediate impact on productivity. Gen AI brings a revolutionary approach to contract creation, review and analysis. By leveraging AI-based templates and recommendations, these tools streamline and accelerate these complex processes.
A key feature of Gen AI is the use of AI-based contract templates. These templates are not static, but rather evolve based on real-time data, adapting to legal nuances and industry-specific requirements. Additionally, Gen AI goes beyond simple template creation and offers intelligent recommendations during the review and analysis stages. Its algorithms analyze vast data sets to provide insights and suggestions, improving the decision-making process of legal professionals. This innovative integration of AI not only accelerates contract-related processes but also improves their quality and accuracy, marking a significant advancement in the field of legal technology.
Building efficiency and cost reduction.
It is crucial to explore the financial ramifications of integrating Gen AI technology into contract operations. According to findings of McKinsey and company, large corporations may face a projected 2 percent loss due to unmet commitments. For a company with annual spending of $2 billion, this equates to a cumulative annual loss of $40 million. Compounding this problem, teams without automated agreement methods are 75 percent more likely to breach their contractual obligations. Fortunately, these challenges can be resolved as Gen AI automates routine tasks, accelerates signing time, and provides better management of contractual obligations.
Incorporating Gen AI into contractual processes contributes to healthier outcomes by automating routine tasks. This allows employees to redirect their attention toward strategic initiatives, driving the business forward rather than being bogged down by administrative work. Additionally, this improved efficiency has a positive ripple effect, creating a less stressful experience for customers and suppliers.
Leveraging Gen AI during the contract process facilitates faster signing time, fostering better client relationships and simplifying the negotiation process for all parties involved. Additionally, Gen AI's ability to reference previous contract terms ensures consistency across agreements, further speeding up the overall process. This feature not only reduces the likelihood of errors, but also contributes to the speed and reliability of the negotiation process and helps improve relationships with suppliers and customers, reinforcing Gen AI's role as a valuable asset in optimizing contractual processes.
If the contractual obligations of customers, suppliers or your own business are poorly managed, it can result in a significant loss of resources. It is important for companies to ensure that they do not overpay or underpay. AI generation can extract clauses that can be linked to automated tasks and key dates for tracking and management (such as renewals or price increases). These tasks, dates, and tables within the system can be used to track many different types of contractual obligations.
Providing a competitive advantage
According Forbes Advisor, 64 percent of business owners are optimistic about the transformative potential of AI to strengthen customer relationships. This perspective underscores the growing recognition of AI as a powerful tool for improving customer experiences.
In a market where a single negative service encounter prompts 61 percent of customers to consider switching to a competitor, companies are forced to prioritize simplicity and convenience of processes, especially in critical areas such as contract management. . The prevailing sentiment is clear: in a competitive landscape, businesses cannot afford to underestimate the critical role of AI in fostering positive customer interactions.
Technological advances are reshaping industries, and companies without the integration of Gen AI technologies risk falling behind their competitors. The generation of AI is not simply a trend; It is a disruptive force that has the potential to redefine markets and reshape consumer expectations. Failure to adopt and integrate Generation AI into business processes can result in missed opportunities, inefficiencies, and ultimately a lag in competitiveness. As the business landscape evolves, Gen AI stands as a critical differentiator that can propel organizations forward or leave them struggling to catch up.
Thinking in the future
Artificial intelligence is poised to transform numerous sectors, projecting a substantial annual growth rate of 37 percent between 2023 and 2030, according to findings from Grand View Research. This rapid expansion underscores the growing influence of Gen AI technologies.
The rise of Gen AI means that companies can immediately reap the competitive benefits of a more efficient, cost-effective and competitive contract process. Gen AI provides an immediate solution to problematic manual processes while strategically paving the way for a more robust CLM system, should your business needs require such a transition.
Despite the apprehensions surrounding the use of AI, most customers maintain trust in companies that integrate AI technology. When companies use AI responsibly and transparently, they not only maintain consumer trust but also harness the potential of AI to improve customer experiences.
Investing in Gen AI-assisted contract operations offers immediate value for startups, scaling and established businesses alike, proving to be a worthwhile expense.
