Automated extraction solutions bear the promise of freeing up subject matter experts from tedious and error-prone manual review tasks. AI software can easily extract agreement terms or clauses, expiration dates, and more. If their results are accurate, these solutions will add strategic value to the organization by improving efficacy, reducing risk exposure and generating new opportunities.
To maximize their benefits, one needs however to select carefully. Here is a short list of the top 5 criteria to consider when evaluating a contract review tool:
- Can the system identify terms and clauses with a high level of accuracy?
An automated contract review tool should be able to reliably extract key information from thousands of complex contracts containing disparate and diverse terminology. It should be able to extract terms and clauses without relying on specific keywords. It is also important that the system is capable of understanding the meaning of sentences, paragraphs, and longer text. This is a prerequisite to solving the problems of language ambiguity and vocabulary mismatch which reduce the accuracy of many systems.
- How easily and quickly can the solution be trained to meet company-specific requirements?
Some systems that come with pre-defined extraction models are almost immediately usable. Larger companies with a variety of use cases involving different types of agreements will need additional training – a costly and lengthy process because most contract intelligence systems are based on approaches that perform statistical analysis of text. A system that can be trained with as few as 100 documents will save time and money and provide the organization more agility to process a wide range of agreements.
- Can the system interpret and classify provisions based on meaning?
One way an automated contract review tool facilitates the process is to analyze and classify provisions based on the requirements of the organization. For example, the tool should be able to use meaning-based classification to distinguish between an acceptable termination clause vs. a termination clause the requires additional review.
- Does the solution allow for semantic search?
Being able to search for similar results across multiple documents is crucial. The system must be able to identify all documents with similar clauses even if the wording is different. The system should handle both keyword-based and natural language searches and be able to bring back relevant results with a high level of confidence.
- Does the solution easily integrate with other systems?
A high-performing, dedicated contract review tool is something that can improve visibility into existing document repositories or augment the capacities of contract lifecycle management systems. It should easily integrate with all of them, optimally via a RESTful API since it does not require any programming or complex software architecture planning.
In times of looming economic recession, companies must thrive to maintain their competitive advantage in either optimizing their operations and processes or seizing new opportunities. A contract review tool matching the 5 above mentioned criteria can definitely make the difference, by helping employees work smarter, executives make better decisions and overall delivering better value.
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