How do you choose a book or a movie when you’re in the mood for some entertainment? You might read its description displayed on any digital platform. You might also pull up a video or article reviewing the story. What you probably won’t do is queue up the first movie you see on Netflix and commit to watching it all the way through without knowing a single thing about it.
As crazy as it may sound, this isn’t so far off from how you might approach dealing with a contract. When you receive a long, complex contract, you probably won’t want to spend the entire weekend meticulously reading it start to finish, before even familiarizing yourself with a general overview of the agreement. You definitely won’t sign along the dotted line relying on memory and verbal promises alone. What you might do instead is the equivalent of reading a review or reviewing a summary. That’s the role of contract metadata and process data in contract management.
What is contract metadata?
Contract metadata has traditionally been defined as data about the contract. In the movie metaphor, metadata would be a summary or brief description of the film, to give you a sense of what it’s about.
Contract metadata assists parties of a contract in reviewing, sorting, and tracking agreements. It contains structured information extracted directly from the contract, stored against the records of contract information. This makes it easy to access, link, and aggregate. With well-organized, easily accessible contract metadata at your disposal, you can save hours of contract administration, and quickly review the basics of an agreement, like the date it was signed, the value of the contract, and the types of clauses it contains.
What does contract metadata do?
In today’s digital age, every industry on the spectrum, including health, education, finance, and others, has incorporated AI and technology into their contracting processes. Today, contract metadata enables:
- Streamlined communication among teams and between departments
- Searching and reporting of contract repositories to create new contracts
- Consistency, effective monitoring, and relevant updates
- Quick, strategic decisions based on past agreements
- Simple, clear summaries of complex information, accessible to everyone
With metadata, you can get notifications of upcoming deadlines, prepare for renegotiations, and quickly get compliant with new data protection regulations. Businesses with organized metadata have more time and resources to ensure every contract is just right. This frees up the humans on your team for projects that require innovation and relationship-building, which improves the company’s reputation and makes for happier customers in the long run.
How can you incorporate AI into contract metadata?
Businesses are using a variety of strategies to make the most of artificial intelligence in the contract management process. Tags are among the most common places you’ll see AI take a role in metadata creation and contract management. This is when AI automatically tags content for later search, by whatever criteria you set. AI can also be used to develop workflows and contract templates, using existing contract data to speed up the process of document creation and review.
Many of these AI services come with a catch: either significant investment of time and money to implement the system, or tons of pre-existing data to get it up and running. Systems like these can be tempting—after all, more data, more accuracy, right?—but they don’t always come through with results.
The most reliable, profitable, and long-term solution is to deploy a free-flowing and hassle-free contract lifecycle management software that is digitalized and uses AI technology to give accurate and speedy results. Out of the box systems like Ironclad can assist you in optimizing and managing AI-incorporated contract metadata and handling contract workflow, without wasted time or money.
Introduction to contract process data
Another term that often pops up in conjunction with contract metadata is contract process data. If your contract is a movie, your process data is like a third-party review—a more detailed overview of what insights you can glean from the contract, which offers a more holistic understanding of the content at a glance.
What is contract process data?
Put simply, process data is metadata about the metadata. It manages, optimizes, and strategizes metadata into something more coherent and insight-rich. It helps you better understand your processes by giving you access to metrics like total contracts completed, average contract lifecycle, number of workflows created, and more. With detailed information about your process, you can better identify bottlenecks and inefficiencies, improving your strategy for contract management long-term.
Like metadata, process data can be documented manually or using automation.
Manual process data
With manual process data documentation, you’ll have to be prepared to dedicate lots of time to getting started. You will inevitably need to hire additional human resources to manually optimize and process contract metadata, costing you time and money.
Manual documentation also leaves room for human error. These human errors will frequently require supervision and revisions by managers and superiors, accounting for an even greater cost of time and money. A substantial portion of your manpower will be engaged in optimizing, strategizing, and processing metadata, taking away their attention from other critical tasks.
Automated process data
Not only does automating your process data save time in the short term by reducing the demand for administrative resources and minimizing human error, it can help poise your company for growth down the line.
By utilizing contract lifecycle management software to optimize and strategize your contract metadata and process data, you leave your personnel sufficient time to cater to other innovative tasks, including managing your client’s endpoint and evolving the business in meaningful ways. Automation will also minimize the chance of error and ensure smooth operations of your enterprise. Tasks that took hours to complete will now take minutes, improving the effectiveness of your organization.
Tools for managing process data and metadata
There are many resources available for managing process contract data. Different companies use different methods. Let’s examine and compare a few.
Excel sheets and CSV files
Excel is commonly used for recording the types of data represented in contracts. Once a contract is written, contract records can be codified using Excel sheets and the related metadata. This allows a business to search and report later, based on the data it has accumulated.
This system may work well at first, but as a business scales and increases in its operations, these Excel sheets will multiply too. Eventually, the data will outgrow the spreadsheet as the volume of contracts increases. Excel sheets or CSV files have to be manually generated, optimized, and strategized, which makes them a less-than-ideal option for long term data storage.
Manual uploads of individual contracts
Even when you digitize your contract management system, manually uploading each contract can prove a challenge. It may work well enough for small businesses with few significant contracts, but will quickly become unsustainable.
With a hybrid AI-based system, software will automate the process data, then the records will be categorized into subjects manually.
Hybrid data management works in the following manner:
Companies use high-quality OCR technology to enable Google-like keyword searches and tagging on digital contracts of different businesses or different contracts of the same business. These contracts and contract metadata are stored securely in a single repository. Tags are quickly assigned to the contracts, and data is organized automatically.
When a company gets AI services from a contract lifecycle management software such as Ironclad, it is provided with a dashboard to access all its data. You can create and organize custom fields for your company. These fields are displayed and sorted, and reports are run efficiently on custom fields.
AI-based software automates data extraction. When you upload a scanned contract, AI runs through the document and provides key information such as counterparty name, contract type, contract category, starting date, ending date, and if the contract is auto-renewing or not. Automatic access to process data makes contract classification and optimization efficient and straightforward.
Contract metadata elevates contract management from simple document storage to a strategic function. This strategic function and optimization of contract metadata is called process data. Here lies the significant difference between them.
Both of these data types are closely connected, and both are essential for the growth and smooth functioning of business contracts.
AI-based CLM software for business growth
Every business needs a contract repository software to form a centralized pool of contract metadata and process data, enable custom fields, and upload templates through the controlled use of AI.
You can now manage your contract workflow with Ironclad, a contract lifecycle management software that is free-flowing and AI-based. It will not only automate your contract metadata and process data but also provide a complete package for optimizing, strategizing, and managing other contract workflows.
Ironclad is not a law firm, and this post does not constitute or contain legal advice. To evaluate the accuracy, sufficiency, or reliability of the ideas and guidance reflected here, or the applicability of these materials to your business, you should consult with a licensed attorney. Use of and access to any of the resources contained within Ironclad’s site do not create an attorney-client relationship between the user and Ironclad.
- What is contract metadata?
- What does contract metadata do?
- How can you incorporate AI into contract metadata?
- Introduction to contract process data
- What is contract process data?
- Tools for managing process data and metadata
- AI-based CLM software for business growth
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