Building for the Future with Smart Procurement Technology
Today’s businesses operate in a hyperconnected global landscape. At any time, an event entirely outside of an organization’s control can set off actions that may affect provisions of agreements that have material consequences. For example, an event might trigger additional obligations for the company and/or its vendors, or impact compliance obligations with local, state or federal laws. To evaluate potential risks and increase responsiveness, procurement departments must have the tools to broadly analyze an enormous volume of contracts to understand the impact of these unexpected disruptions.
This infrastructure will establish an early warning system for potential issues and create an efficient means to respond as the business and regulatory landscape evolves. DocuSign Agreement Cloud for Procurement helps procurement teams make quicker and more informed business decisions with 360-degree visibility into their supply chain agreements. With the agreement cloud, teams can combine a central location with simple integrations and automations to streamline every stage of the agreement workflow: preparing, signing, acting and managing. By reducing the number of manual steps in the procurement process, DocuSign makes it easy for any procurement team to be agile and efficient when adapting to change.
Advancing from tactical executors to strategic business leaders
Building a workflow that can quickly solve modern challenges is a strong first step in building a powerful procurement system, but there’s more work to do. Today’s intelligent tools offer a massive opportunity for procurement teams looking to create new value for their organization and provide more strategic insights. DocuSign Insight empowers teams to use AI technology in procurement workflows, including optical character recognition (OCR)/Boolean search capabilities, robust reporting and AI-driven clause and attribute analysis.
Insight takes a multi-faceted approach to agreement analysis, utilizing OCR, natural language processing (NLP), latent semantic indexing (LSI) and a rules-based logic engine. This innovative combination of technologies enables consistent, sophisticated analysis of agreements from a range of sources and formats, enabling side-by-side comparison of related clauses and terms via conceptual search and filtering.
To take analysis one step further, DocuSign Insight uses Insight Accelerators, purpose-built models and policies capable of finding relevant clauses and attributes across agreements to address specific, targeted needs. For example, it may be necessary to identify agreement language impacted by data privacy regulations, Brexit, LIBOR, M&A and more. Insight Accelerators speed up analysis delivery and enhance ROI upon deployment, helping procurement teams address business and legal/compliance needs on an expedited basis, saving hours of manual labor and pinpointing specific terms that a manual review might miss.
Insight is the industry-leading solution to analyze company-wide contract data, identify risks, pinpoint opportunities for cost savings and provide rapid responses to sudden changes to the company’s ecosystem. With these capabilities, procurement teams can better manage their suppliers and corresponding contracts to proactively add value. Within their organizations, procurement professionals are in a position to seize the opportunity presented by this dynamic landscape and evolve to a strategic driver for their business.
Establishing the infrastructure for future procurement improvements
Modern technology is available to solve many of today’s procurement hangups, but most organizations are still in early stages of adoption with these tools. Procurement teams that optimize their system of agreement with AI-powered products will receive all of the benefits discussed in the previous section and also set the stage for additional value with future AI enhancements.
Once all agreements have been centrally stored and prepared for search via OCR, advanced analytics and AI can start working to create new value. Natural language processing tools can search that existing database of agreements, looking at the interrelationship of terms and taxonomies of meaning to identify concepts much more accurately than a simple keyword search. This is extremely valuable to organizations with a lot of third-party paper in their agreement library. While not every contract will contain exact terms like “limitations on liability,” “force majeure,” best faith effort” or “most favored nation,” those concepts will be identifiable in searches because the technology is able to intelligently process contract language.
Teams will also gain the ability to utilize machine learning and rules-based logic functionality to continue customizing their system of agreement and train the search technology to find new clauses and attributes. By setting up custom if/then statements, a system can be trained to follow policies and identify certain phrases. For example, a system can be trained to identify high-risk sections of a contract based on certain rules. The system can then process incoming agreements to identify those risk areas right away so they can be negotiated appropriately. This user-defined machine learning will allow an organization to maximize the efficiency of legal/compliance personnel by building a system that will quickly apply their recommendations across the entire base of agreements.
Beyond simply searching agreements for broad concepts, smart agreement analysis tools can also compare similar clauses or sections to highlight similarities and differences among agreements. These concepts can be customized by any team to pinpoint specific portions of agreements to take action on. This functionality can be used to analyze an entire contract library to find concepts related to a wide range of use cases: strategic restructuring, risk/compliance, legal operations, revenue optimization and more. When added to a powerful central agreement system, the technology gives any organization more power to analyze agreements and translate the findings into business value.
Soon, modern procurement teams will be able to use smart technology to make faster, better business actions based on incoming data. Smart Clause technology is already being introduced to allow a system of agreement to connect to other systems and take data-triggered actions without delay or human error. Similar new breakthroughs will automate actions on a day-to-day basis that will extend the practical reach of procurement professionals, giving them even more power to create new value for their organizations.
By intelligently analyzing the entire agreement library to find new opportunities and act on them instantly, procurement teams will establish a position at the leading edge of innovation in their organizations. To learn more about today’s procurement challenges and find out how to solve them with DocuSign Insight, download our Smart Solutions for Agile Procurement whitepaper. It’s full of details about how groundbreaking new technology can be built into procurement workflows to make that team a strategic driver of any business.