The contracting environment is exceedingly complex. It involves multiple stakeholders, numerous legal terms and clauses, different jurisdictions with respect to influence, and complex regulatory requirements. The different legal terms and clauses in the contract lead to risks at different levels mainly due to inconsistent standards and poor visibility into contracts. It is nearly impossible for companies to eliminate risk from their business, but they can manage it. Contract risk is a major danger for companies, but it is often overlooked.
Inconsistent standards and poor visibility lead to risks like:
- Regulatory -Risking company image and losing good-will by individual-level contracting with inconsistent terminologies leading up to regulatory and compliances issues
- Financial – Revenue losses due to poor visibility into contract’s terms of a buyer or supplier or non-performing contracts
- Legal – Non-fulfilment of contractual obligations and non-enforcement of specific clauses can expose a company to unanticipated lawsuits
- Operational – Improper enforcement of contracts results in poorly prioritized processes and workflows
An enterprise needs to act intelligently to take advantage of competition between potential suppliers, weigh up options, and consider who carries the risks, and at what cost. Rudimentary management of the contracting process does not yield maximum operational excellence. Instead, it can lead to companies losing up to 40% of the deal value, with respect to a specific situation or challenge faced.
Zycus’s Merlin embodies three different personas, a Guide, an Explorer, and a Protector, all powered by Zycus’s Artificial Intelligence capabilities to streamline the contract management process. It offers timely suggestions, diagnosis, and predictions to help produce error-free and dynamic contracts. Merlin extracts metadata to identify clauses that match the given conditions thereby providing in-depth analysis. It enhances the legal team’s performance in an enterprise by transforming the contracts into dynamic, intuitive, and smart legal documents, to enable informed decision making.
Analyzing Risk with Merlin Protector and Explorer
Merlin extracts meta-data elements for Contract Risk Analysis with its advanced search capabilities to process up to 10,000 agreements in a jiffy and can and provide proactive insights and intuitive visualization on all performance KPIs with a customizable dashboard. It can identify clauses and terms in contracts that have a business or legal risk associated with them. It consolidates data from different sources and brings about AI-powered insights on contract risk from inconsistent data.
This has a positive impact on legal operations by removing inconsistencies and improving visibility by:
- Structuring the content and transforming the contracts through primary clauses available in the repository
- Saving time on creating contracts assisted by templates or standardized terms in a common pool and not across multiple drives and desktops
- Autonomously pulling out key data to identify opportunities and calculate risks
- Comprehending the contract extracting metadata to ease search and indexing to identify sections, keywords, and clauses among standard contracts, thereby offering in-depth analysis
- Streamlining contracts thereby removing confusion within teams about the final version
- Amend the performance regime and contracts
- Improving processes and revenue resiliency
- Decreasing the chance of noncompliance
