How AI in contract management can increase revenue

Businesses are only worth as much as the quality of their goods and services. Higher-quality products generally translate to more customers, generating higher profits and increasing revenue. Organizations use contracts to keep track of all these relationships, obligations, and revenue. But when businesses scale so large that they have hundreds or thousands of contracts, failing to efficiently manage those agreements can cost just as much as losing customers.

Contract management, or contract lifecycle management, describes the administrative effort to oversee and improve efficiency for every contract, from initiation and award to governance and renewal. Research by the International Association for Contract & Commercial Management estimates that the average cost of contract administration is $6,900. Controlling these costs with more efficient workflows, diligent review, and more informed negotiations can translate to massive profits.

Effective contract management isn’t just a way to save money. It can actually help sales teams generate more revenue — especially when contract management systems are backed by artificial intelligence and intelligent process automation.

Contract management and profits

The key goal of contract management is to eliminate “value leaks” that occur with careless contract handling. This is especially important when you consider some companies have over 90% of their revenue in contracts with suppliers and vendors. During fulfillment, value can decrease dramatically if a vendor misses deadlines or doesn’t deliver expected results. If contract managers don’t diligently check adherence, even these small mistakes can add up to massive losses when scaled across every contract a company oversees.

Plus, manual data entry creates bottlenecks when workers are unable to keep up with a lot of information coming in at once. These slowdowns limit throughput and delay hundreds of other simple tasks, diminishing profitability.

How AI in contract management helps generate revenue

Many of the manual processes that slow down contract administration can be eliminated by leveraging AI in contract management. Platforms like Automation Hero can extract contract data, populate and update databases, push information to other systems, and more with minimal or no manual labor. But it can also directly help sales teams bring in even more revenue by the following:

Increasing sales process efficiency

AI in contract management breaks down data silos to make information more easily accessible to everyone who needs it. Beyond its AI, Automation Hero connects seamlessly with most enterprise solutions in the market, so salespeople can quickly extract contract data into their CRM for more efficient strategizing. When prioritizing which customers or vendors to contact, it’s easy to pull up existing contracts based on expiration date.

As salespeople become more savvy about how they use this data, they can create AI models to calculate how likely customers are to renew contracts or how they might respond to additional sales contact attempts.

Responding quickly to requests

Salespeople can play an important role in overall customer management — but only when they’re kept up-to-date about issues customers are having. If account managers or customer service reps receive a complaint significant enough to jeopardize a contract, they can easily log it in their database, and a workflow in Automation Hero can push the information to the sales department. Sales teams could use AI to parse data about the overall health of a customer relationship and determine whether to offer a discount in future renewals. This way, sales can maintain revenue that would have otherwise been lost.

Enhancing renewal negotiations

One of the most challenging parts of the sales process is simply accessing and managing customer data. Automation Hero doesn’t just make it easier to extract contract data from CRMs — it also enables the easy capture of other types of data. Users can review contract performance data over the past year to see if it provided intended value. Depending on the data, there may be an argument for raising prices or selling at a higher volume (or both). This is a great way to increase revenue from an existing customer base without needing to convert a new lead.

Encouraging cross-selling

Open data access can also highlight upselling and cross-selling opportunities. Automation Hero can search for information in any document, even if it hasn’t been formally entered into a database. Salespeople can use this feature to compile past performance information and look for opportunities to sell additional products and services. When users have information collected right in front of them, without needing to go find it, or input it into their own database, themselves, it’s easier to focus on building relationships and having dialogues with customers.

Contract management is a vital strategy for companies to maintain profitability, but it doesn’t have to be a mere cost-saving activity. AI in contract management empowers team members with accurate contract data to help them generate more revenue from customers. Automation Hero’s advanced AI can be the key to gathering and organizing the information they need and freeing up more of their time and energy.