The technological affluence of the past is now the standard of today. In the past, the concept of digital contract management was seen as an unusual newcomer in the tech stack for certain. In the eyes of some, it was thought to be a risky move. Clouds were viewed as insecure and ephemeral. Many were reluctant to sign digital documents because the authenticity of signatures was a cause for worry; in addition, they wanted to safeguard themselves against identity theft.
Nowadays, with the help of platforms like contractsafe.com the majority of modern companies’ employ contract management in one way or another. They realize that their data is more protected by Amazon’s defenses that are more military-grade than the server they have located in the basement of their business. They also know they are legal in nearly every industrialized country globally and are more difficult to alter than the physical ink scrawls. The contract management using digital signatures is now the standard.
Here are top trends in contract management you should see in 2021 and beyond.
Digital Transformation
Many organizations have probably implemented the CLM (Contract Lifecycle Management) solution to simplify the current contracting process. However, they were CLM solutions geared towards specific departments like sales, procurement, legal, etc. This fragmented approach often resulted in inefficient process workflows and the deployment of several Contract Lifecycle Management tools, creating users’ frustration.
This problem can be resolved by using ECM software to handle all contracts using the same technology.
AI (Artificial Intelligence) In CLM
AI is becoming increasingly believed as the dominant technology for contract lifecycle management. Automation will significantly increase security, decrease risk, and speed up processes. CLM software that can use AI is expected to evolve from a basic repository to one in operation and ensure contracts are properly created and executed efficiently.
According to various analytic studies, CLM is estimated to increase by three times in the next six years, and AI will be the main element in this trend. Artificial Intelligence-driven CLM systems are revolutionizing how companies accomplish more work in less time and with better quality.
Contract Automation
Artificial intelligence is likely to be a significant factor in controlling contracts into the near future, but we’re still far from being there. Although AI is utilized and leveraged to some extent in contract analysis, basic automation is still far more effective in the present situation.
Automations can aid organizations to be more efficient when it comes to contracts and perform repetitive manual tasks more quickly. They can make contracting procedures more efficient and help to reduce risks to the law. Although there is much hype about the benefits of AI, the integrations and simple automations tend to be more efficient and less expensive to create when compared to the benefits they provide. The majority of what is marketed as AI is, in reality, only simple automations. What appears to be an AI trend is probably an automated trend.
Although AI faces some resistance because of its science fiction-based reputation and worry that it could replace jobs performed by humans, it appears to be gaining momentum without hesitation. There is no discussion of humans as a factor when it comes to automation. Everyone seems to be in agreement that automation technologies can be used to enhance the work of professionals. This means they will use the time they spent to manage manual contracts to identify potential benefits in the contract and put more effort into creating better relationships with business allies.
Data Privacy
It’s been almost three years since the GDPR was implemented in Europe. Since then, the extraterritorial nature of the regulation has made it mandatory for non-European countries to implement similar standards across the globe. Data privacy isn’t just essential to remain in line with the law and adhere to the regulations. It’s also a necessity to keep and grow trust among consumers. Data ethics are becoming more crucial to most consumers, as the growing scrutiny of security breaches has forced businesses to adopt a more focused approach to risk.
On the one hand, this implies that more businesses are using contract lifecycle management software that collects and organizes information at the expense of email systems that allow data to be not structured. On the other hand, it can also make some hesitate to use contracts management programs unless it meets the highest security standards.
Smart Contracts
Smart contract code is a way to automate the execution of the critical elements of contracts based on inputs from data sources, whether external or internal systems. The possibilities of using it include automating the application of volume discounts for purchases made with key suppliers to regularly verify that employees are eligible for a certain level of credentials and contractors and calculating and issuing payment based on the condition of a factor such as shipping demands and SLA fulfillment. The fascinating thing as we move towards 2022 is the increasing acceptance that smart contract software doesn’t require blockchain and can be incorporated into traditional legal contracts. The popularity of cloud-based “smart legal contracts” means that businesses can begin reaping the benefits of automation of contracts now.
Final Words
There is a growing trend in the use of contract management software. Everybody seems to be contemplating how they can use data and leverage it to generate value and prepare for the future when artificial intelligence likely replaces the manual processes that are commonplace in the present. While the basic functionality of digital signature has become mandatory, present trends favor advanced systems that can support all phases of the contract.
