Based on input from more than 500 businesses globally, the study identifies a growing divide between personal and organisational perceptions around AI, contrasting barriers to adoption with priorities for AI-driven transformation that span risk, compliance, and cost savings.
Icertis, the global leader in AI-powered contract intelligence, and World Commerce & Contracting, the global leader in independent research in commercial and contract management (CCM), have published a new report titled AI in Contracting: From Untapped Revolution to Emerging Evolution.
Based on input from more than 500 businesses globally, the study identifies a growing divide between personal and organizational perceptions around AI, contrasting barriers to adoption with priorities for AI-driven transformation that span risk, compliance, and cost savings. Respondents were primarily legal and procurement professionals across a multitude of industries who delivered insights into AI trends over a six-month timeframe, shaping a unique narrative on how the age of AI is continuing to revolutionize contract management.
“As AI rapidly evolves, this study from World Commerce & Contracting and Icertis points to its power in redefining commercial practices and creating value as a strategic asset capable of enabling both innovation and efficiency,” said Tim Cummins, President of World Commerce & Contracting. “AI can analyze vast amounts of contract data with speed and accuracy, uncovering patterns and anomalies that might go unnoticed by human oversight. This supports real-time improvements in contracting cycle times, more vigilant compliance monitoring, and proactive cost management – all of which are priorities in today’s business environment.”
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Key findings from the report include:
- Personal enthusiasm for AI is outpacing organizational readiness. Nearly 80 percent of legal and procurement professionals are now personally enthusiastic about AI, more than double the number who expressed positive sentiment in June 2023. In comparison, less than 40 percent of respondents feel their organization is enthusiastic about AI – only a 10 percent increase within the same timeframe. This indicates a growing need for decision-makers to accelerate AI adoption in an effort to match their workforce’s appetite to embrace the technology.
- Security and reliability remain primary AI concerns. The top barriers to AI implementation include apprehension around security and privacy (57 percent), data output quality (46 percent), and general lack of trust (46 percent). These factors are likely the source of more cautious AI adoption practices and any lingering uncertainty among business leaders as they seek to protect their company’s data.
- AI is enabling strategic impact and transforming core business functions through contracts. Legal and procurement professionals believe AI will help analyze risk & compliance in contracts (94 percent), assist in contract negotiations (88 percent), and generate contracts (87 percent). Additionally, 84 percent agree that AI will free up time for more strategic work to help evolve their functions into drivers of innovation and value across the enterprise.
- AI ROI is being measured in tangible outcomes. Businesses are assessing the impact of AI in contracting by evaluating cost savings, considering enhanced contract data analytics and reporting, and examining compliance rates with contractual obligations and regulations as the top three performance indicators. Analytics and insights, and risk and compliance support are also among the most desired generative AI capabilities in contracting as legal and procurement leaders seek to move beyond the AI hype cycle and enable measurable value.
“Many companies spent 2023 talking about AI, but now leaders are under pressure to take action and show tangible returns from AI investments. Contracts are the single source of truth for business relationships, making their data one of the most valuable untapped assets for AI and a prime opportunity for enterprises to realize immediate bottom-line impact by integrating AI into contract-driven operations,” said Bernadette Bulacan, Chief Evangelist, Icertis. “Icertis offers legal and procurement teams secure platforms and proven AI models that deliver reliable insights they can trust to inform business decisions. Innovations like Icertis Copilots also enable enterprises to leverage AI as a strategic partner rather than just an automation tool, ultimately supporting the cost savings and risk mitigation these teams seek in today’s macro environment.”