AI and Contract Management – Pierre Mitchell Explains

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There have been some really good articles on our colleagues’ Spend Matters US site recently. They are not all written by the Spend Matters team however, for instance, if like me you are trying to keep abreast of what blockchain is all about, you might want to read Thomas Cherian of GEP commenting on how it might affect procurement.

But much of the good material does come from the team, and Pierre Mitchell excelled himself with a four-part series looking at what AI (artificial intelligence) and machine learning techniques might mean for the world of contract management (and contract management software of course).

Artificial Intelligence in Contract Lifecycle Management was the title and in part 1 Mitchell introduced the topic .

In case you haven't noticed, artificial intelligence (AI) is becoming a very big deal in business. And there is perhaps no area where the impact of AI systems (i.e., systems that exhibit intelligent behavior) will be felt more than in legal departments and, more broadly, in the area of managing contracts. Consider the enormity of collective knowledge that makes up commercial law and amount of money spent translating the semi-structured “legalese” that enshrouds what should be logical business constructs that sit at the core.

In that part 1, he explains what you should be doing even if you are not ready to embrace fully the AI opportunity. Then in part 2nd he gets into the concept of knowledge representation which discusses the importance of building a contract domain knowledge model in the form of a rich repository of contract clauses and related data (e.g., risks) and metadata – not just contract document artifacts.

In part 3 here he looks at how AI will convert its reasoning and analysis into useful actions that can help practitioners – for example, “guided contracting” which presents end users with automated questionnaires that help flexibly configure a ‘standard’ contract from atomic-level clauses in a clause library.

The finally in part 4 here he looks at natural language processing and machine learning, which happens when computers “learn” from the data they process rather than relying on rules-based procedures programmed into them by humans.

His overall conclusion and final thought?

“Get smart and procure proper CLM capabilities before you start using “smart CLM.” Before you supervise any learning and start training the machine in any area, it’s good to get smart on the topic of AI to help you along ... I encourage all procurement practitioners to keep learning, experimenting and sharing your results. We’d love to hear your thoughts, experiences and opinions in this area”.

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