Contract Lifecycle Management (CLM) has transformed operational record-keeping-focused systems, primarily used for legal audit intents, to an enterprise-level core system devised to govern expense control and business risks to improve income optimization.
As per Gartner Reports, the performance of contract tracking software can reduce administrative overhead by 25%-30%, halve contract lifecycle time, and improve adherence by 55%.
The high ratios of agile contract management adoptions, the need for contract compliance, and the swift shift to AI/ML technologies drive the market for contract management software incorporated with artificial intelligence.
Top Contract Management Trends in 2024
In past years, conventional contract management practices have changed, now, companies prefer high-end software that makes tedious work easy. Since 2024 is going to be the year of technological revolutions, we have curated the top contract management trends that enterprises can capitalize on in upcoming years, so let’s dive in.
Trend #1: AI Influence in Improving Contract Visibility
We all know how AI is influencing every aspect of the digital world, and as per the World Commerce & Contracting survey, AI-powered interpretation of contracts has a high accuracy of 98% as compared to human-based contract analysis, which was 92%.
Conventionally, companies store contracts after finalizing them in platforms such as OneDrive, Gmail, or other dedicated repositories. All manual work has higher chances of errors and mishaps, and whenever any user or party wants to review it becomes a tedious and time-intensive task. The practice can result in overlooked critical milestones, leading to revenue loss or strained relationships with clients. So, there is a dire need for automated contract management with accessible analytics and visual dashboards that offer timely and actionable insights. Notably, Deloitte highlights that companies using AI-powered contract analytics experience a significant 60% reduction in contract management costs.
Trend #2: Using NLP to Make Contracts Easier
Writing and reviewing just one contract can take a lawyer over two hours. Imagine dealing with 20,000 or more contracts over time – it’s a lot to handle. While more contracts mean more money, it also means more work.
To simplify this, contract management teams are turning to AI and NLP. These technologies help understand contracts and make sense of the complex legal language, doing it quickly. AI and NLP can pick out crucial client details and give clear insights on tricky terms.
Legal language isn’t the same everywhere; it changes from country to country and industry to industry. But NLP can take clauses from standard contracts and create a collection for future use when checking or creating new contracts.
Trend #3: Contract Automation
Poorly written contract clauses can cause trouble in the future that necessitates proper agreement management from start to end. Standard clauses across all company contracts help control them efficiently and prevent most compliance issues. Automation is the technology that assists in speedy and accurate contract management, making all tedious tasks a matter of minutes. So, in the year 2024, contract automation will be among the top contracting trends.
Trend #4: Customized CLM Solutions
Multiple startups and businesses often struggle when managing contracts manually. The reason for this grind is the use of diverse systems to manage different components of agreements which results in a mess. Thanks to personalized contract management, users can avail themselves of customized features and integration. Therefore, in 2024, the business industry expects highly efficient contract management trends.
Trend #5: Data Security
Many enterprises are uncertain about employing contract management software because of data security concerns. And in the highly digital world, data privacy is one of the major concerns. Fortunately, advanced contract management has overcome this issue and offers a highly secure environment for contract lifecycle management. So, all types and sizes of businesses can trust high-end, secure contract management software. In upcoming years, owing to technological advancements, contracts need to be more secure and proficient as these advancements can cause increased cyber-attacks as well.
Trend #6: Easy Tracking and Audits
If we have one central repository to keep contracts it will make their tracking and access feasible. It is a good news for startups and developed enterprises that they can incorporate modern contract lifecycle management software and leverage technology in true means. In 2024, the coolest trend in contract management will be automated contract tracking and audits so users can access and edit them easily and reduce the chances of mistakes or mishaps.
The Bottom Line
It is a fact that everything in the business sphere is changing with technological advancements. In this evolving phase, every business wants more feasible and profitable solutions for contracting. Fortunately, technologies like Artificial Intelligence, automation, and Natural Language Processing (NLP) are being incorporated into contract management software to ensure a more secure, faster, and hassle-free future. From all these trends, it seems that 2024 will be the year of the tech revolution, that will entirely change conventional business practices.
Author Bio:
Qurat-ul-Ain Ghazali, aka Annie, is the growth manager at Contractbook and looks after all the organic channels. She has been with tech startups and scaleups for a couple of years with a B2B focus. You can find her socializing, traveling, indulging in extreme sports, and enjoying the local desserts when she is not working.
