No matter how big or small your company is, contract risk is always a concern. In order to mitigate the risks associated with contractual agreements, it’s important to have a comprehensive risk management strategy in place.
There are a number of ways to reduce contract risks, but automation and workflow technology is one of the most effective. By automating contract processes and workflows, you can ensure that all contractual agreements are managed in a consistent and compliant manner. This not only reduces the risks associated with each individual contract but also helps to mitigate the overall risk to your company.
How Decision Engines Help Reduce Errors by up to 90%
Decision Engines partnered with a Multinational Telecommunications Company (MTC) to help them automate their contract management processes. The goal was to reduce the number of errors in their contract lifecycle and to improve compliance with their internal policies and procedures.
MTC receives hundreds of procurement contracts on a monthly basis. Contract evaluation, which identifies the inherent risk in a signed or about-to-be-signed agreement, is time-consuming and is rarely done thoroughly, resulting in revenue loss.
Decision Engines integrates with MTC’s contract management system (CMS) and uses machine learning algorithms to analyze each contract. Here’s the step-by-step process:
- The contract is uploaded into Decision Engines where it is analyzed and converted into a digital format.
- Data from the contract is extracted and processed using natural language processing (NLP) and machine learning algorithms.
- A report is generated that outlines the risks associated with the contract, as well as recommendations on how to mitigate those risks.
The report generated by Decision Engines is clear, concise, and easy to understand. It provides MTC with the information they need to make informed decisions about their contracts, and mitigate the risks associated with them. As a result of using Decision Engines, MTC has been able to reduce the number of errors in their contract lifecycle by up to 90%.
In addition, Decision Engines were able to improve MTC’s team productivity by 80% and increase compliance with internal policies and procedures.
The MTC case study is just one example of how Decision engines can help to reduce contract risks. If you’re looking for a way to automate your contract management processes, and to improve compliance and team productivity, then a decision engine may be the right solution for you.
Contract Risk Resources
What Are The Risks of a Contract?
The four most common types of contract risk are financial, legal, security, and brand risk.
- Financial risk is the possibility that a contract will have a negative impact on your company’s financial performance. For example, if you’re paying too much for goods or services, or if you’re not getting paid on time, then this can impact your bottom line.
- Legal risk is the possibility that a contract will violate laws or regulations. For example, if you’re not complying with data privacy laws, or if you’re using unfair contract terms, then you could be at risk of legal action.
- Security risk is the possibility that a contract will expose your company to security threats. For example, if you’re sharing confidential information with a supplier, or if you’re using unsecured payment methods, then you could be putting your company’s data at risk.
- Brand risk is the possibility that a contract will damage your company’s reputation. For example, if you’re working with a supplier who has a history of unethical behavior, or if you’re using terms and conditions that are unfair to customers, then this could reflect badly on your brand.
How to Mitigate Contract Risk
There are a few steps you can take to mitigate contract risk:
- Review your contracts regularly. This will help you to identify risks early on, and to take action to mitigate them.
- Train your team members on how to identify and manage contract risk.
- Use contract management software to automate risk assessment and alerts.
- Work with a contract lawyer to review high-risk contracts.
What Are The Benefits of Automating Your Contract Management Process?
There are a number of benefits of automating your contract management process, including:
Improved compliance with internal policies and procedures.
- Reduced risk of human error.
- Faster contract turnaround times.
- Improved team productivity.