X-ray your contracts to see inside

Before the discovery of X-rays, physicians had to guess on the nature of a broken bone by looking only at the visible swelling. Until recently, contract managers had no real insight into their contracts: risky clauses remained hidden and unmitigated.

For thousands of years, broken bones were a common occurrence from the relentless manual labour, risky transportation (horses, ships or boats) and outbreaks of violence that characterised pre-modern times. Even if you recovered from a fracture you were often permanently hunched and stiff for the rest of your short life.

Then everything changed: W.C. R?ntgen discovered X-rays in December 1895 and the news of this discovery immediately aroused immense interest. Physicians began as early as January 1896 to use X-rays on patients to investigate the skeleton.?Just 6 weeks after their discovery, X-rays were finding their first clinical use when a Dr Frost produced a plate of a patient's broken wrist.

You need an X-ray machine for your contracts

X-rays allow a physician to see the hidden structures inside a bone so they can locate the exact source of trouble and propose treatment. Businesses also need to look inside their contracts, to look for potentially dangerous clauses and come up with mitigation strategies. For the longest time this was hunting through filing cabinets, and more recently cumbersome searches through PDF files.

But then, just like in 1895, technology changed everything. Contract Intelligence technologies take the critical business information hidden in contracts and transform it into structured and connected data. This gives contract managers full visibility into a contract’s risks and opportunities.

Diagnose risks

X-rays are able to diagnose hairline fractures, tumours, dental problems or that nickel that your son swallowed on his second birthday. They allow a physician to see all manner of risks to your health.

It's the same with contracts: they can contain clauses that could cause real trouble in the future if they remain undiagnosed. Clauses such as automatic renewal ("evergreening") or price escalation clauses based on CPI/RPI which suddenly become a nightmare when inflation is hitting double digits. You need to see deep inside the contracts to mitigate these risks.

Create a single source of truth

We've all seen the shots of medical shows on TV (and in the photo accompanying this article) of several different specialists all looking at the same X-ray plate. They are not arguing and saying "are you sure this is the latest revision ?"

You need the same absolute confidence when looking at the contract: that this is the correct revision, the right attachments, the latest amendments. One indisputable source of truth.

Deploy Artificial Intelligence to give deeper insights

Artificial Intelligence (AI) is being increasingly used in radiography, in 2018 Stanford University researchers announced that a new AI algorithm can reliably screen chest X-rays for more than a dozen types of disease, and it does so in less time than it takes to read this sentence.

AI is also critical in making sense of your contracts. With it you can digitise all your legacy contracts to discover their attributes and metadata, so they can be managed just like “digital-native” contracts. This adds critical legacy business information to the “single source of truth” mentioned above. Then once everything is digital, the AI can get to work analysing negotiation histories, critical clauses and other data to find insights that helps reduce risk and improve margins across contractual relationships.

Just as radiography is a key part of a treatment plan, at SAP we offer Icertis Contract Intelligence that integrates with and extends SAP Ariba source-to-pay processes, to streamline procurement processes and reduce risks.