Agiloft Introduces AI-Enhanced Contract Lifecycle Management for Obligation Tracking

Contextual Overview of AI in Contract Management

The recent introduction of Agiloft’s Obligation Management feature marks a significant advancement in the realm of contract lifecycle management. This innovative tool leverages artificial intelligence to facilitate the automatic extraction and monitoring of commitments embedded within contracts. A persistent challenge confronted by organizations has been the oversight of critical obligations post-signing, which can substantially impair operational efficiency and financial performance. Research from PwC indicates that inadequate obligation management can lead to revenue losses ranging from 5-9% annually, underscoring the importance of monitoring key commitments and deliverables.

Objectives of Obligation Management

The primary goal of Agiloft’s Obligation Management feature is to transform static contract language into actionable data. By utilizing AI to identify various types of commitments—ranging from service-level agreements to compliance requirements—the platform allows organizations to automate the tracking of obligations throughout the contract lifecycle. This systematic approach aims to mitigate risks associated with overlooked commitments and drive accountability across teams by enabling task assignments, deadline settings, and progress tracking.

Advantages of AI-Powered Obligation Management

• Automated Extraction: The platform’s Screens Run Action (SRA) capability performs automated analyses of uploaded contracts, accurately identifying obligations and providing essential information for review. This not only streamlines the contract review process but also enhances data accuracy.
• Categorization of Obligations: A pre-built library categorizes obligations pertinent to legal and procurement teams, facilitating efficient management of commitments. Categories include Financial, Delivery, Service Levels, and Compliance, among others.
• Customizability: Organizations can tailor the obligation tracking system to their specific needs by creating custom obligation categories, thereby adapting the tool to fit unique operational requirements.
• Integration Capabilities: Users can integrate obligation data with other enterprise systems, allowing for a seamless flow of information across platforms, which enhances organizational coherence and efficiency.
• Automated Reminders and Escalations: The system’s ability to send automated reminders and escalate overdue tasks ensures that no commitment is overlooked, thus reducing the risk of penalties or compliance failures.

Challenges and Limitations

While the Obligation Management feature introduces numerous advantages, organizations should remain cognizant of potential limitations. The effectiveness of AI in obligation management is contingent upon the quality and comprehensiveness of the underlying contract data. Additionally, customization options, while beneficial, may require significant investment in training and adaptation to realize their full potential.

Future Implications of AI in LegalTech

The deployment of AI in contract management signifies only the beginning of a broader transformation within the LegalTech landscape. As Agiloft’s Chief Product Officer, Andy Wishart, emphasizes, this launch represents a pivotal step towards a future wherein AI actively collaborates and reasons across the contract lifecycle. This trajectory points towards increasingly intelligent systems capable of processing contracts in a manner that not only enhances efficiency but also augments the decision-making capabilities of legal professionals. Future advancements may lead to AI technologies that not only assist in compliance and obligation management but also provide predictive analytics to foresee potential challenges and opportunities within contractual agreements.