6 Ways GenAI Can Automate Your Contract Management

How AI can positively impact your contract life cycle this year.

Contract management is an important process that enables businesses to effectively manage their contract lifecycles. This involves creating, negotiating, executing, monitoring, and analysing contracts throughout their life span to ensure compliance and reduce risks. However, considering the complexity of many contracts, managing them manually can be a formidable task. This is where AI-powered contract management systems come in.  

Artificial intelligence (AI) has become a cornerstone technology in the business landscape, particularly in the area of contract management. The key reason behind this shift is the significant efficiency gains and strategic benefits it offers companies.

AI transforms contract management from a traditionally labour-intensive process into a more efficient streamlined process. By automating routine tasks such as document scanning, data extraction, and contract analysis, AI enables legal and finance teams to focus on more strategic aspects of their tasks. Not only speeding up the life cycle of contracts, but also significantly reducing human error.Don’t worry about sounding professional. Sound like you. There are over 1.5 billion websites out there, but your story is what’s going to separate this one from the rest. If you read the words back and don’t hear your own voice in your head, that’s a good sign you still have more work to do. 

What is GenAI Contract Management?

Any technology capable of automating contract management processes to generate or manage a contract counts as AI contract software. Such platforms use machine learning (generative AI or GenAI) to conduct contractual data analysis, complete risk management tasks, and automate AI contract drafting and version comparison.

But AI contracts are only as good as the way you manage them and how you leverage AI and automation to do so. When you carry AI through the entire contract lifecycle management (CLM) process, you can minimise the errors and inconveniences from historically manual contract management methods.

What GenAI Brings to The Table

Generative AI-powered contract management systems leverage the power of artificial intelligence and machine learning to streamline the contract management process. These systems can automate repetitive tasks, reduce errors, and provide insights that can help businesses make informed decisions better and faster.

The AI platform accelerates core tasks so you’re free to be productive. Import legacy contracts rapidly, onboard third-party contracts wisely, train algorithms to find just what you need, and introduce GenAI to your contracting workflow with not a hint of programming needed.

Many companies have already started to integrate AI into their contract processes. While the potential and capabilities of generative AI have proven to be the most effective, they still need to go beyond the experimental stage in most companies. The following is an overview of the key AI benefits that are currently making the biggest impact within the contract management landscape.

6 Ways GenAI Can Automate Contract Management

Contract lifecycle management incorporates the entire contracting process, from initial draft to completing that last obligation, GenAI can support as well as enhance this process. 

We live in a time where agility and rapid decision-making are decisive competitive advantages, making the role of GenAI in contract management not only relevant but a business essential.

Properly trained contract-specific data helps GenAI with: 

• First draft contract or template setup

• Identifying risks and discrepancies 

• Legal review and initial redlining of content

• Tracking the performance of contracts as well as ensuring deliverables and deadlines are met  

• Simplifying difficult contract language

With machine learning and GenAI we start to see trained contract data that can evaluate, and present information based on the contracting data it reviews. This creates a more organised and timely process free from human-errors.

Here are the 6 Key Benefits of AI Contract Management for Procurement and Legal Teams:

1.      Automated Contract Drafting or Setup

Generative AI accelerates contract creation by generating initial drafts using templates, historical data, and predefined clauses. This ensures consistency, reduces manual effort, and minimises errors.

2.     Enhanced Efficiency and Speed   

AI contract management solutions automate repetitive tasks and workflows. This added efficiency helps reduce the time teams need to dedicate to the legal review process and lets human reviewers focus on more strategic tasks.

3.     Enhanced Risk Identification and Mitigation

AI analyses contracts to flag non-standard terms, deviations from templates, or potential legal risks. By comparing clauses against historical data and compliance standards, it proactively highlights issues, reducing exposure to disputes or liabilities.

4.     Streamlined Negotiations

Generative AI suggests context-aware edits or alternative language during negotiations, drawing from past agreements and industry norms. This speeds up consensus, reduces bottlenecks, and maintains alignment with organizational policies.

5.     Continuous Compliance Assurance

AI automatically verifies contracts against evolving legal, regulatory, and internal standards. It updates clauses in real-time as laws change, ensuring adherence and reducing the risk of non-compliance penalties.

6.     Advanced Analytics and Insights

By extracting key terms (e.g., deadlines, obligations) and analysing contract data, AI provides actionable insights. Organisations can track performance metrics, anticipate renewals, and optimise terms for future agreements, driving data-driven decision-making. 

These benefits collectively enhance efficiency, reduce cycle times, lower costs, and improve scalability, positioning GenAI as a critical tool in modern CLM.

It has become clear that the adoption of AI, and in particular generative AI (GenAI), is not just a trend, but an important shift that is reshaping the way legal departments operate. From enhancing efficiency to enabling strategic decision-making, GenAI is proving to be a game-changer.

The advanced analytics capabilities of GenAI systems provide deep insights into contract performance, vendor relationships, and compliance risks. This intelligence enables companies to make well-grounded decisions to mitigate risks and to optimize supplier performance. These strategic benefits will over time result in significant cost savings by avoiding unnecessary spending, negotiating better terms, and improving operational efficiency.

Have questions or want to know how you can benefit from GenAi? Contact us to request a demo or visit www.adaptivedynamics.co.za to learn more.