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Contracts have always been at the heart of every business. Every organisation requires contracts of one type or another to reduce risks associated with the running of the business. The smooth working and growth of any business depends, to a large extent, on the comprehensiveness and proper management of contracts. The Contract Lifecycle Management (CLM) tool has become an inevitable part of any enterprise IT landscape and enabled organisations to reduce the effort and risk associated with manual contract management.

However, an orthodox CLM tool can only partially provide the benefits of all of the available technology advancements. Businesses are now deploying disruptive AI (Artificial Intelligence) based smart CLM solutions to further eliminate risks and improve outcomes to drive business growth.

In this article, we explore how an Artificial Intelligent (AI) infused CLM can disrupt the Contract Management process for businesses and drastically reduce associated risks:

Clause Recommendations & Missing Clause Risk Mitigation

Clauses are an integral part of all business contracts as they provide the most important building blocks. Missing clauses can have a catastrophic impact on a business, carrying both financial and reputational risks. AI algorithms can ensure that certain clauses are made mandatory, while other clauses are recommended based on historical and other relevant data. To better understand the potential of AI in this scenario, consider an IT product company creating a contract with an IT service provider that is their Implementation Partner. AI can ensure that the contract must contain an IP (Intellectual Property) clause to protect from the misuse of exposed code base.

Prescriptive Analysis for Contract Lifecycle

AI based Prescriptive Analytics can help sales reps and legal teams to prescribe courses of action which should be taken in order to avoid contract management delays, re-negotiations and the risk of losing contracts. As an example, based on market and historical data, the CLM system could prescribe that the legal team take prior approval of contract from the finance team, retaining any red-lining in the contract and attaching any additional collateral along with the main contract when it is sent to the customer. With the introduction of these kind of prescriptive suggestions, contracts can be executed and managed in a much more effective and efficient way.

Predictive Analysis for Improved Efficiency

AI brings the concept of predictive analysis whereby, based on various data, a rating can be assigned for the % chance of a contract being won or rejected. This saves a great deal of time, enabling reps to target efforts towards those contracts and deals which have the highest chances of converting to the next stage. For example, having considered historical and demographic data, AI can deduce that a particular customer would prefer to award a contract only to government approved local vendors, making the probability of winning this contract quite low. Again, this enables organisations and their teams to focus on those deals and contracts which have a higher probability of closing, avoiding spending time and effort working on deals which are less probable.

Automatic Data Ingestion & Other Manual Tasks

As shown on the graphic below, sales reps spend a considerable % of their time in data entry, a low value manual task which can be automated through AI. To use a simple example; while digitalising a hard paper copy contract provided by a customer, a sales rep would typically need to manually enter significant data into the system which creates the contracts. Utilising AI based tools enables sales reps to scan and extract exactly the right set of data from hard copies, auto-filling the record in the system. This saves time which can be used far more effectively on much more productive work.

This doesn’t only apply to data entry; a variety of AI based applications and tools can be used to automate other tasks which sales reps may currently do manually through the contracting process. For example, sending the finalised contract for electronic signature or pushing the activated contracts to a document repository.


AI certainly has huge potential to change the way your Contract Lifecycle Management application works. Be prepared to take your contract process to the next level by leveraging AI capabilities.