Efficiency is all about making the best use of every resource. This is why the most successful companies are constantly looking for innovative ways to maximize their workforce while keeping costs down.
But there’s an area that’s often forgotten when seeking efficiency improvements — and that’s contracts.
From product and shipping costs to a company’s workforce, it's easy to overlook the wealth of opportunity lying dormant in the details of contracts. Fortunately, the latest breakthroughs in AI and machine learning (ML) technology make it possible to extract valuable information from all your documents, saving you time and resources.
We’ll cover the importance of discovering the efficiencies you can take advantage of with the latest contract automation technology and look at how Terzo’s Contract Lifecycle Management (CLM) platform revolutionizes how you can interact with your data.
What Is the Importance of Efficient Contract Management?
According to World Commerce & Contracting, quality contract development and management has the potential to save companies an average of 9% of their total annual revenue.
Optimizing efficiency in your company is necessary to maintain an edge over your competitors. It happens all too frequently that organizations fail to see how powerful proper contract management can be. Intelligent document processing (IDP) is the key to unlocking that power.
With IDP, not only do you have the ability to extract data from documents using optical character recognition (OCR) to import data directly into your contract management platform, but once that data is extracted, IDP uses AI and machine learning (ML) to classify that data and provide valuable insights.
The Terzo Advantage
Terzo’s platform provides contract automation for tasks that used to require your team’s full attention, such as contract negotiations and renewals. CLM avoids missed opportunities by modernizing important negotiations with vendors, drafting and maintaining contracts, and making sure stakeholders adhere to contract terms.
Terzo combines all your contracts into a unified platform for absolute efficiency and visibility. IDP technology releases your workforce from manual data entry, activating the power of AI and ML for editing and analyzing your data in the digital domain. This means getting invaluable time back — and the confidence that comes with knowing AI yields accurate results every time.
How Does IDP Utilize AI and Automation?
AI can manage an extensive range of functions for businesses. This includes using ML to gather any source and interpret its meaning. This contract-oriented AI can then make recommendations on, classify, and organize data based on information it has been trained on.
AI-based automation can also be fine-tuned for processes like IDP to extract contract data, tag important clauses and terms, alert teams about important dates, and provide notifications that address whether vendors are adhering to contract terms.
The list of ways AI can help you streamline contract management is virtually limitless, leading to incredible time-saving efficiency.
What Are Some of the Key Components of IDP Contract Management?
According to Microsoft: “Data has reached a saturation point. Organizations today often have so much data that it’s difficult to decipher what’s valuable information and what’s just noise. Mining vast amounts of data for actionable insights can be costly and time-consuming. That’s where intelligent document processing, or IDP, comes into play.”
IDP provides the following functionality:
Extracting entire source documents
Identifying important terms or contract details
Classifying contracts from multiple vendors
Alerting users to deadlines, compliance issues, and other important data
Analyzing documents to provide ongoing metrics
Using metrics to provide strategic data
What Are the Benefits of Intelligent Document Processing in Contract Management?
Contract management applications can be customized to fit the specific needs of any business. But a powerful, centralized CLM platform — like Terzo’s — includes the following benefits of intelligent document processing. The following are just some of the perks that come with using IDP technology.
Streamline Contract Management
Contract automation helps organize your contract data by classifying data accurately and making it possible for you to group all of your contract intelligence data as it serves you best. Alerts and metrics give your workforce the insights they need to oversee operations and spend their time taking advantage of the opportunities that come from better data served at the click of the mouse.
Accelerate Your Contract Lifecycle Management
Your Terzo CLM platform is a centralized database encompassing every phase of your operation’s agreements. Important clauses are ready to implement as a template where you know the terms that need to be required, and deep insights are automatically calculated and provided at a glance from your dashboard.
Reduce Manual Data Entry and Potential Errors
Even the most attentive workers make mistakes. Human error is, unfortunately, an inevitable part of life. The good news is that automation can help to reduce human error while also dramatically increasing the rate of data entry. ML can improve digital accuracy by training on the specifics of your organization's unique agreements with vendors.
Enhance Compliance
General Data Protection Regulation (GDPR) is a strict international law for privacy and security, providing a good basis for the level of detail IDP should derive from extracted data. This means intelligently following specific predefined safety and security rules, formats, and standards.
IDP can maintain a perfect audit trail for compliance and accountability throughout an organization. In an age where compliance matters more than ever, it’s worth it to invest in the right tools to keep this initiative on-track.
Improve Security
Security is an area that should constantly be monitored for improvement opportunities. IDP provides you with all the central visibility and control you need, but no one can access any data they aren’t authorized for. You can customize the dashboard for departments or individuals and even share alerts or analytic reports with vendors as needed.
How Terzo's AI-Powered IDP Transforms Contract Management
Terzo is leading the way in leveraging ML to analyze your contracts, making it possible to perfect the process of organizing data and recognizing the most valuable data points your team needs to be aware of. Here’s how we do it.
About Terzo’s AI-Based CLM
Terzo’s software platform taps into the most critical elements of AI for contract management by directing machine intelligence where it’s needed most. Because AI is able to understand source material, this CLM software can accurately manage roles that require human interpretation.
Terzo’s CLM centralizes your company’s connection to the data in your contracts through the following process.
Extracting Data
The application uses AI to gather all of your source data accurately so it can absorb, process, and interpret what your documents are about.
Classifying Data
Your company may have dozens, even hundreds, of contracts with vendors and customers. AI groups that data according to how you need to see it. This could be alphabetical, by date, by type of business, or whatever suits your needs.
Automating Data
You can search specific topics or clauses manually when needed. But information that requires ongoing intelligence is automatically reviewed, processed, interpreted, and served to your central dashboard, freeing your workforce to cover more tasks while remaining in the loop.
Analyzing Data
Your CLM platform targets the most meaningful insights for your bottom line. This can include how different vendors perform and whether they comply with what’s required in your contract, thus helping you leverage that data to negotiate the best terms when it’s time for renewal.
Terzo’s industry-leading AI uses these features to save you workforce hours to scale your company’s efficiency without missing any details.
What to Look for in an IDP Solution for Contract Management
No matter the industry or size of your workforce, customizing your contract management platform can help your organization transcend its workforce limitations and scale. Be sure to look for the following features to get the most from your IDP platform.
Customizable Templates
If you have legal terms or special clauses you know need to be used in multiple scenarios or perhaps even as a staple of every contract, you can create each of them as a template to simply add to new documents. Templates can cover any detail, from terms to timetables — whatever serves your needs. Additionally, having those templates on hand will save you time in the future.
Adaptable Rules
Fine-tune what data you need optimized, which analytics tell the story of how you can improve your operations, and what alerts your experts need to receive. If it’s renewal dates or compliance targets, you decide what tunes out the noise and dials in the actionable data.
Features You Can Integrate
If you use different platforms to manage various aspects of your data management, you need an IDP platform that can connect to other applications (i.e. DocuSign) and pull in valuable data to better analyze and process.
Secure Design
The right IDP application is very powerful. You don’t want that data to fall in the wrong hands. You also want to maximize how well data can be shared across all your departments. Look for an IDP with strong privacy and administrative features, so you can target what eyes are on what details at any given time.
The Future of Intelligent Document Processing in Contract Management
In an ever-evolving technology landscape, it’s important to have an idea of what waits on the horizon.
The future of AI and ML in contract management will likely focus on increased customization capabilities. Companies are looking for new insights specific to their operations that can help them get ahead of competition.
New Areas to Explore
AI and ML will continue to help companies identify new areas that need focus, whether that involves uncovering how they connect to vendors or gaining new perspectives on how to interpret information.
Contract Data Usage
Contracts are an incredible source of information to be used across channels. They’ve historically been viewed as a static legal binder to be referenced only when there’s a concern about whether all parties are living up to expectations or as a reminder when a contract renewal is coming.
The future points to maximizing the use of contract data so every department can take action on insights that connect to the important details in those terms of the agreement.
New Data Patterns
The sales team may better understand what vendors are connected to the largest profits, while inventory managers may find weak links in processing, shipping, or ordering. AI-based operations in the future have the power to connect separate pieces of data, formulating strategies that weren’t possible to perceive — until now.
Reduced Silos and Better Collaboration
In addition to a positive trajectory toward future benefits, AI and ML will likely lead to greater trust in automated tasks. This means the workforce will be able to better align with each other and reduce silos. Even silos between top- and lower-level employees can be reduced, resulting in better collaboration at all levels and a flatter organizational structure.
As ML continues to understand the finer details of a company, it appears that the future will be about continuously finding new ways to reduce bottlenecks, leading to maximized efficiency and dramatic cost savings.
Let Terzo Help You Optimize Every Step of Your Contract Lifecycle
It’s not often that a single platform can help you improve data accuracy and operational efficiency while you put your teams to work on less redundant tasks. But that’s the promise and power of choosing the right IDP application.
If you’re curious about what it looks like for your contract intelligence to be powered by the latest AI and ML, consider trying your free trial of Terzo’s CLM platform today.
