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Top CLM trends 2024
A5 |
April 22, 2024 |

 1,923 total views

Eight ways to improve legal and compliance risk management

In the professional services industry, companies often grapple with a common set of challenges that affect their growth and operational efficiency. These issues transcend geographical boundaries, impacting firms across various locations and sectors. In this case study, we focus on a specific case to shed light on how a company in Florida addressed these universal challenges and successfully bridged the gap with innovative solutions.

1. Harnessing the Power of AI and Automation Integration

According to a recent Gartner study, “by 2026, AI models for organizations that operationalize AI transparency, trust and security will achieve a 50% improvement in terms of adoption, business goals, and user acceptance.” Generative AI-driven platforms are increasingly popular to help organizations overcome traditional contracting challenges. These platforms robustly manage contracts with unparalleled precision and speed, covering tasks from contract analysis to execution and renewals, tracking contract performance, and adhering to compliance and government regulations.

2. The Growing Influence of NLP in Simplifying Complex Contract Language

As per a PwC study, Fortune 1,000 companies handle a substantial load of active contracts, ranging from 20,000 to 40,000. Crafting and reviewing a single contract can be arduous, with attorneys typically spending over two hours per contract. Managing such a bulk of contracts throughout their lifecycle becomes a monumental challenge. Despite the promise of increased revenue with more contracts, the need for efficient management is undeniable.

Contract management teams increasingly turn to AI and NLP-powered solutions to tackle these challenges. These technologies enable a nuanced understanding of contract details and a human-like comprehension of intricate legal language. AI and NLP efficiently extract and categorize vital contractual metadata, providing precise insights and analyses on terms that may be ambiguous or challenging to interpret. This strategic adoption of AI and NLP streamlines contract management processes and ensures adaptability to diverse industry landscapes.

3. Blockchain: The Cornerstone of Smart Contracts

Blockchain technology is taking center stage in CLM trends, offering transparency, security, and traceability to contract management processes. The decentralized nature of blockchain ensures a tamper-proof record, instilling confidence in the integrity of contracts. Additionally, blockchain’s cryptographic mechanisms ensure the security of smart contracts, safeguarding them against unauthorized access and ensuring data integrity. Smart contracts on the blockchain also benefit from automated and self-executing capabilities. The decentralized consensus mechanism of blockchain enables the execution of smart contract terms without intermediaries, reducing the risk of errors and delays. Integrating blockchain technology into Salesforce fortifies the security and transparency of smart contracts. It streamlines their execution, offering a more robust and efficient solution for contract management within the Salesforce ecosystem.

4. Transitioning to Cloud-Based CLM Solutions

Organizations are experiencing a prevailing trend in transitioning to cloud-based Contract Lifecycle Management (CLM) solutions, indicating a significant paradigm shift in their approach to contract management. This trend involves organizations departing from traditional on-premise systems to embrace more dynamic, flexible, and scalable cloud platforms. Cloud-based CLM solutions empower organizations by providing access to contract data anytime and anywhere, enabling seamless collaboration among teams across diverse locations. Adopting these solutions enhances flexibility and facilitates efficient contract lifecycle management through features such as real-time updates, version control, and collaborative editing. The scalability offered by cloud-based CLM allows organizations to adapt to changing business needs, ensuring that the contract management infrastructure grows in tandem with the company’s expanding requirements. Overall, this trend reflects a strategic move towards modernizing and optimizing contract management processes, aligning with the evolving landscape of cloud technology and the demand for agile, collaborative, and scalable solutions. 

5. Unlocking Insights with Advanced Analytics, Reporting and Data Privacy

Gartner states, “AI-based contract analytics solutions will reduce the manual effort needed for contract review by 50%.” The emphasis on advanced analytics within CLM platforms is unlocking unprecedented insights into contract performance, compliance, and risk management. Organizations can now make informed decisions, mitigating risks and optimizing contractual outcomes. Advanced analytic solutions resting on the AI-based platforms can speed up the contract review process by 5X or more and also derisk the contract negotiation process to build a more comprehensive AI trust, risk, security, management (TRiSM) program that enhances governance upfront, and proactively ensures safe and reliant AI systems with data privacy. CLM systems are evolving to integrate features that assist in ensuring regulatory compliance, especially in industries with complex compliance requirements. This development ensures that organizations navigate regulatory landscapes with confidence and precision.

6. Empowering On-the-Go Management with Mobile Accessibility

Mobile accessibility is a pivotal CLM trend, allowing users to manage contracts on the go, fostering collaboration irrespective of physical location. It will enable real-time contract updates, immediate approval processes, and instant communication. This adaptability ensures that the boundaries of a traditional office setting do not confine contracts. Whether you’re remotely working across continents or in a physical space, on-the-go contract management with mobile accessibility is a game changer that businesses are increasingly adopting after the COVID-19 pandemic. 

7. Seamless Integration with ERP and CRM Systems

Streamlining business operations has become paramount, and one pivotal trend in achieving this is the seamless integration with Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM) systems. This enhanced integration catalyzes a harmonious flow of information across diverse business processes within an organization. By knitting together the functionalities of ERP and CRM, companies can achieve a holistic view of their operations, from financial transactions to customer interactions. This interconnectedness not only eliminates data silos but also optimizes the efficiency of various departments, fostering a collaborative environment. With integrated systems, critical data seamlessly moves between ERP and CRM, empowering organizations to make data-driven decisions, enhance customer experiences, and achieve a more streamlined and responsive approach to business activities. This strategic fusion of technologies is not merely an upgrade; it’s a transformative step toward organizational synergy and heightened operational effectiveness.

8. User-Friendly Interfaces: Navigating with Ease

In the dynamic landscape of Contract Lifecycle Management (CLM), there is a growing emphasis on creating user-friendly interfaces within CLM platforms. This strategic focus aims to prioritize user experience, fostering enhanced user adoption and simplifying the overall navigation process. CLM platforms, designed with a user-centric approach, ensure that individuals at various organizational levels can effortlessly navigate the intricacies of contract management. These user-friendly interfaces are crafted with simplicity and intuitiveness in mind, allowing users, irrespective of their technical expertise, to seamlessly interact with and harness the full capabilities of CLM systems. This intentional design reduces the learning curve associated with CLM adoption. It contributes to heightened productivity as users can swiftly and confidently engage with the platform, promoting a more efficient and inclusive contract management experience.

Embracing the Future of CLM

As we embrace these trends, it’s evident that CLM is undergoing a transformative phase. Organizations that align with these trends are optimizing their contract management processes and setting the stage for sustained revenue growth. In the dynamic business world, adapting to these trends is not just a choice but a strategic imperative.

Author: A5

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