Contract Management Trends 2023

According to Goldman Sachs, contract lifecycle management solutions minimise erroneous payments by 75-90% and operating and processing expenses by 10-30%. The growing demand for AI-enabled contract management software is being driven by rising demand for agile contract management, rapid acceptance of AI/ML technologies, and an increased need for contract compliance.?

You look back at the contract management trends of 2022, you'll notice that the year saw the introduction of even more complex solutions. Let's take a look at the most amazing trends to watch in CLM in 2023.

1. AI's Growing Role in Contract Analytics : - According to World Commerce & Contracting, AI-based contract interpretation and summary for distribution to concerned staff are 98% correct against 92% for human-based analysis. It emphasises the critical importance of intelligent contract analytics and visual dashboards that deliver fast and actionable data. Interestingly, according to Deloitte, organisations may reduce contract management costs by 60% by adopting intelligent contract analytics.
2. The Expanding Role of Natural Language Processing in Simplifying Complex Contract Data :- According to a PwC survey, Fortune 1,000 businesses often manage anything from 20,000 to 40,000 current contracts. Contract management teams are increasingly turning to AI and NLP-powered technologies to help them understand the precise nature of contracts and conduct human-like interpretation of dense legal jargon. AI and natural language processing (NLP) can quickly extract and classify crucial contractual metadata while delivering correct insights/analysis on confusing or difficult-to-understand words. Legal terminology is not universal. It differs from one country to the next and from one industry to the other. NLP, on the other hand, may extract clauses from your own standard contract template and assist you in creating a repository of clauses to be utilised when analysing future contracts or drafting new contracts.
3. More Disciplined Data Exchange / Urgency and Data Privacy Awareness :- As the year advances, organisations should prioritise preventing data breaches and ensuring compliance with evolving legislation. Because regulatory and policy compliance is critical for consumer/client trust, manually managing the evolving legal landscape is a hard undertaking for compliance and legal teams, and many firms are increasingly looking to contract management software to provide an effective answer.
4. Increased Compliance Management Visibility : - Contract managers are looking for ways to use AI to track contractual performance and increase predictability. CLM solutions that can detect deviations from agreed-upon agreements and obligations will be in high demand. AI-enabled contract compliance management is expected to improve renewal management and foster more robust and effective communication among stakeholders.
5. Intelligent Audit Trails and Activity Logs :- Centralised contract storage combined with smart clause retrieval can increase contract monitoring efficiency by 90% and audit efficiency by approximately 60%.?Contract compliance audits can assist your organization's numerous areas, from procurement to finance to legal. This can be easily accomplished by centralising your contract document management system.?Furthermore, it speeds up the entire contract review process and executes contract reviews more correctly than manual reviews, reducing a company's risk exposure significantly.

Contract automation and analytics, along with superior AI, may deliver us more success than ever before in 2023. If your organisation wants to stay ahead of the curve, keep alert and integrate a comprehensive contract management software.