Did you know that an average Fortune 1000 corporation has over 40,000 active contracts across various levels of complexity? A significant number of these are procurement contracts, and they could run into millions of pages. So how do companies keep track of all these contracts? Today, procurement contract management is dependent on manual effort, affecting efficiency and productivity.
Why should organizations automate their current contract management processes:
A procurement contract goes through 5 main stages (See Fig.), each requiring extensive review effort. The existing manual processes cannot address four critical gaps in the procurement contract’s lifecycle.
Fig: Lifecycle of a Procurement Contract
Using an AI-powered contract management solution can help businesses optimize procurement efficiency, improve processes and regulatory compliance posture, and redirect valuable resources towards strategic business initiatives. Gartner predicts that by 2024, the manual effort for contract review will reduce by 50% from adopting AI-based contract analytics solutions.
Let’s delve into how these solutions can benefit procurement: