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5 Ways Contract Analytics Can Unlock Insights for Businesses

Leverage AI-powered contract analytics in your contract lifecycle management process to unlock hidden insights and enable data-driven business decisions.

Author

Sreyesh Sarma

25/07/2023

4 min read

Contract Analytics

Picture an enterprise handling thousands of contracts and countless opportunities. At the helm of this enterprise, three leaders, Victoria, Ethan, and Alex, had the power to maximize their contract lifecycle management process with real-time insights.    

Meet Victoria, the General Counsel, who is responsible for safeguarding the organization's interests. Her team waded through a sea of contracts, but amidst the overwhelming paperwork, critical insights often slipped through the cracks. Compliance lapses, unnoticed risks, and missed renewal deadlines haunted her team's efficiency.    

Ethan, the Director of Procurement, is tasked with securing the best suppliers for the company's needs. He faced countless vendor contracts, each with unique terms and pricing structures. But without a comprehensive view of vendor performance and market trends, his team struggled to negotiate optimal deals and identify hidden savings opportunities.  

The ambitious Sales Manager Alex led a dynamic team focused on closing deals and cultivating long-term customer relationships. Yet, with a growing customer base and an array of contracts to manage, the Sales team grappled with understanding customer preferences, tracking renewals, and optimizing upsell opportunities.  

However, their fortunes are about to change as they discover the potential of contract analytics in CLM.   

What is contract analytics?        

Contract analytics is a progressive approach to extracting, analyzing, and interpreting actionable data from contracts.  

When Victoria reviews an MSA, it might be a challenge to find critical clauses, milestones, and obligations hidden inside those lengthy paragraphs of text.    

However, the sophistication of Artificial Intelligence (AI) has made contract analytics easier.  With NLP-powered search capabilities, metadata extraction, and clause-level recommendations, contract analytics software enables organizations to gain valuable insights, improve contract management, mitigate risks, and make proactive business decisions.   

According to Gartner, organizations leveraging contract analytics reduced contract review times by 60% and improved compliance by 70%. 

What are the challenges in manual contract analytics? 

Manual contract analytics poses several challenges that can impede organizations from harnessing the full potential of their contract data. Here are the key challenges: 

Insufficient Insights: Manual contract analytics often falls short in providing comprehensive insights and valuable data trends due to the lack of advanced analytics capabilities. 

Compliance Risks: Without sophisticated analytics, identifying and addressing compliance issues in contracts becomes harder, exposing the organization to regulatory and legal risks. 

Unstructured Data Challenges: Many contracts contain unstructured data, such as handwritten clauses or scanned documents, making it difficult to extract and analyze relevant information manually. 

Limited Reporting: Manual contract analytics may lack comprehensive reporting capabilities, hindering the ability to track contract performance and make data-driven decisions. 

Missed Opportunities: Inefficient manual analytics may result in missed opportunities, such as renegotiating favorable terms, identifying cost-saving measures, or capitalizing on upsell opportunities. 

How Our AI-powered Contract Analytics Can Help?  

Custom Dashboards: Visualizing Contract Data with Precision  

Contract analytics empowers Victoria, Ethan, and Alex to create custom dashboards tailored to their specific needs.  

Tracking upcoming contract expirations, monitoring compliance metrics, or assessing contract performance are just some of the benefits. These dashboards offer an intuitive, bird's-eye view of the data that matters most.  

Take Victoria, for instance, working on a multitude of contracts simultaneously. With a well-designed dashboard, she can track contract value, renewal dates, and key clauses effortlessly.  

Ethan, on the other hand, might create a dashboard that tracks supplier performance, contract spending, and risk exposure. 

Contract analytics tools equipped with advanced reporting and analytics capabilities provide organizations with a comprehensive view of their contract lifecycle.  

They enable the extraction of critical data points related to contract velocity, facilitating performance comparisons, trend analysis, and identification of process improvement opportunities. Armed with these insights, organizations can enhance their contract management practices, accelerate business processes, and gain a competitive advantage in the market. 

Milestone Tracking: Staying Ahead of Key Events 

Contract analytics software can help you ensure that contracts are executed on time and that all parties are meeting their obligations.  

For example, Alex might use contract analytics to track the following: 

  • Status of all deals by stage, date, and value 
  • Key milestones in all deals to ensure he’s meeting the deadlines and to identify any potential risks 
  • Performance of his team members to identify top performers and manage resource allocation better 

Clause Intelligence: Unleashing the Power of Precise Language 

Here is an example of how Victoria could use clause intelligence to prevent her company from litigations. She could track: 

The frequency of certain clauses in the contracts to identify the most critical ones 

The changes made to clauses over time to identify any potential risks and to ensure the contracts are always up-to-date 

The performance of different clauses to identify which clauses are most effective and to make changes to those if required 

Consumption Reports: Gauging Contract Performance at a Glance 

Contracts hold a wealth of data that can significantly impact Sales strategies.  

Alex can analyze contract performance, customer behavior, and sales trends. By leveraging these insights, his team can identify cross-selling opportunities, predict customer preferences, and tailor their approach to meet client demands proactively.    

On the other hand, Ethan’s team might use consumption reports to track the quantity of a certain product being used by each department.                        

This would help them identify which departments are using the most product and to ensure that they are getting the best possible value for their money. 

Ethan could also track the usage of each product over time to identify any trends and to make changes to their procurement strategy accordingly.  

Customer & Vendor Insights: Paving the Way for Strategic Partnerships  

Beyond legal obligations, contracts provide valuable information about customer and vendor behavior. Contract analytics software unlocks Customer & Vendor Insights that empower Procurement teams to make data-driven decisions.  

These insights enable Ethan and his team to assess vendor performance, negotiate better terms, and optimize procurement processes.  

Alex can leverage contract analytics to track customer satisfaction, customer spending, and identify opportunities to upsell or cross-sell.   

Choose SimpliContract to Uncover Contract Insights  

Contract analytics goes beyond the boundaries of legal teams. With critical data at stake, business functions including Procurement and Sales can convert static contracts into dynamic sources of revenue growth.  

SimpliContract can help you with enterprise-wide CLM implementation and uncover critical insights to drive proactive business decisions and boost revenue.  

Discover how SimpliContract’s AI-powered contract analytics can help your business.