Contracting forms one of the core competencies of any firm or organisation, but surprisingly given its significance, it rarely gets the importance due to it. As a result, at conservative estimates, firms often lose up to 40% of value on certain deals due to inefficient and ineffectual contracting procedures. A silver lining to this issue now is the advent of AI (Artificial Intelligence) that has helped businesses get over many of the hurdles to contracting, taking it to an altogether new level.
What is the key challenge that firms face when it comes to contracting?
It is the sheer numbers of contracts generated which have to be kept track of from conception to the end of their life cycle. Hence it is a very hard task to manage, organise and update contracts which are made more difficult by the fact that there are no standard benchmarks on which contracts are based.
Every contract is unique in its own way and hence a lot of trained manpower is needed to oversee the contracting process meticulously as well as draft and execute them. For example, a firm might have a clutch of vendor contracts with varying terms and clauses. Monitoring each individually to make sure that no opportunities …