A study led by Cottrill Research found that between 70-80% of business transactions are overseen by contracts.

Surprisingly, very few companies are taking full advantage of their contract clauses to maximize their negotiated deals. Another survey by KPMG revealed that companies are losing a whopping 40% of the potential value of their deals. The reason? Human error.

Contract negotiation training experts have suggested an effective solution to the human problem: artificial intelligence (AI). So, how can AI not only fix the problem but even slip in some extra perks and benefits to the contract negotiation process? Time to find out.

Optimize contract negotiations

You’ve heard the saying, “read between the lines.” What about reading the actual line?

When it comes to a negotiated contract, each line is heavy as bricks with critical data. Dates, timelines, prices, and returns are just a handful of examples of information that need to be dissected to ensure you are squeezing out every last drop of value from the negotiation. That’s a lot to think about at the same time.

Scientists from the University of Oregon have found that the average human brain is capable of processing a maximum of 4 distinct thoughts at any given time. So, analyzing the mounds of information that make up each line of the contract is arduous, to say the least. An AI system, however, can extract and process the bounds of data at the same time, making it an excellent alternative to the human element.

Avoid risk

When racing to close negotiations, being quick on your feet may sound like your best bet to reaching the finish. However, with speed, the risk of tripping up along the way is a lot higher. Errors made during the process of contract negotiations can lead to some serious losses that you will be kicking yourself over down the line.

Attending contract training classes could soften the risks and help you practice strategies that keep mistakes at bay. Still, even the most careful and fully trained employee can have a bad day, especially when the contract is long and complicated. Not to mention mundane and repetitive.

This is where AI can step in. Tasks that may bore an employee to death are not a deal breaker to the technology. Rather, AI can process the task with accuracy and proficiency from start to end. This can include analyzing any clauses that may be obsolete or no longer pass industry or legal standards.

Reduce time

The time between drafting a contract and getting it approved takes, on average, three and a half weeks. This is according to a research study by Aberdeen and Forrester.

Add revisions to the plate, and you can be waiting for over a month. DocuSign has found that most contract management experts go through a cycle of three to four revisions before getting the final thumbs up from management.

Artificial Intelligence, equipped with its automation feature, can cut the waiting time by almost 4 weeks as reported by Goldman Sachs. This can save you and your team precious time to complete other pressing tasks.

AI technology is constantly learning and improving in how it interprets even the most sophisticated patterns. With the most up-to-date information within easy reach, you can make smarter, more profitable decisions.

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• Source: Plato Data Intelligence: Platodata.ai