To realize the benefits which exist after the contract has been signed, it’s necessary to not only understand the terms and provisions contained in your contract, but to capture these for ongoing management.
When a contract is signed, most organizations do a good job of tracking the contract’s basic operational requirements (e.g. renewal dates), but the same can’t be said for a contract’s legal components (e.g. indemnification). In addition, the attributes organizations tracked years ago may not be what they need to know today.
As contracts carry crucial information with legal and regulatory bindings any missing or incorrect information can trigger penalties and other legal consequences. Failing in capturing a payment date can attract more interest on payment or even a termination or an incorrect renewal date can result in loss of revenue.
Though extraction technology has come a long way, no machine can get 100% of the data accurate. Typically, you can expect 40 – 70% of the data to be abstracted through automation. In this regard, it certainly does the heavy lifting, but the results are less than stellar and insufficient to populate your CLM. Most software commits a high level of accuracy but when actually looked down, the data is not relevant to use it. To overcome this problem the best solution is to use a combination of technology and human intelligence. Advanced engines with the help of algorithms and logic can do the heavy lifting which should be then vetted by law professionals for accuracy.