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The world’s leading contract management organization, WorldCC, has just published two AI reports.
The reports are AI – A Strategic Revolution in Contracting (January 2025) and AI and the Contract Management Lifecycle (April 2025).
The reports conclude that AI will have far-reaching consequences for contract management – and for the contract manager’s role and influence within the organization.
AI will influence the contract lifecycle in several areas:
➢Analysis of actual contract performance as a function of clause content (e.g., whether a penalty or a bonusaffects performance negatively or positively), dependencies (e.g., dependenciesacross suppliers, markets, geographies, etc.), and trends (e.g., market trendsaffecting contracts, prices, risks, transportation, etc.).
➢ Development and selection of the right – and better – contracttemplates and clauses in the pre-award phase, forexample pricing models, incentives, and risk allocation, based on historicaldata related to the above.
➢ Real-time insights and forecasts on value delivery,opportunities, and risks in individual contractsas well as across contract portfolios.
➢ Adjustment of policies, processes, roles, and responsibilities based on analysis of the above.
➢ Optimization of the entire business and its strategies (procurement, sales, etc.) based on these insights — turning contract management into a strategic tool.
➢ Humans will continue to lead all aspects of contract management for the most complex, development-heavy, and ambiguous/interpretation-intensive contracts.
➢ More complex, high-risk contractswill be supported by AI tools for analysis, but negotiationand concrete decisions will remain human tasks.
➢ Medium-complexity, long-term supplier agreements requiring innovation and ongoing collaboration will use AI to analyze trends in contracts, portfolios, and the external environment, as well as monitor compliance with contracts, laws, and policies. Humans will manage relationships and strategic alignment.
➢ For low-complexity contracts with standard clauses and occasional adjustment needs, AI will be able to draft and adapt contracts for daily business use and issue risk alerts.Humans will still review and approve these contracts.
➢ For the lowest-complexity, low-risk contracts, based on standard terms and minimal negotiation, AI will be able to automatically generate contracts and select clauses, based on predefined values and business inputs; AI will also be able to carry out compliance checks.
➢ Unclear objectives and scope: AI can flag unclear language, inconsistencies between contract and appendices, and suggest rewording and improvements.
➢ Predictive analysis will enable early warnings and recommendations to avoid or mitigate risks, including how best to allocate risk between the parties.
➢ Lack of governance: AI can support and propose improvements to automated workflows, roles, and responsibilities.
➢ Poor negotiation practices: AI can create scenarios that help balance short-term goals and gains with long-term objectives and benefits.
➢ Challenges in handling changes: AI can monitor change requests, analyze commercial and legal consequences, and suggest revised terms and clauses.
➢ AI can support better supplier selection, identify improvement areas, and propose improvement activities.
➢ AI can simplify contract processes and clauses by suggesting fewer and better standards and streamlining procedures.
➢ AI can propose improved clauses to optimize innovation.
➢ AI will help support value measurement through performance benchmarking and identification of contracts thatperform better — or worse — than others.
➢ Contract managers will be able to handle simple and less complexcontracts faster and more efficiently, freeing up time and energy for the more complex and highly complexones.
➢ They will be able to identify contractsneeding attention earlier — before issuesescalate, e.g., before a quarterly report highlights problems retrospectively.
➢ They will receive support for planningand executing more strategic and balanced negotiations, considering customer/supplier relationships, market conditions, andnegotiation context.
➢ They will be able to integrate their workbetter with ERP and CRM systems, includingautomatic retrieval of external data to support proactive contract management.
➢ Contract managers can use AI to generate reports identifying, forexample, SLA formulations that cause problems and suggestions for solutions. AIcan visually illustrate dependencies, connections, and solutions.
➢ Tasks that currently form the coreof many contract managers’ daily work — draftingstandard low-complexity contracts, preparing contract summaries, performingroutine compliance checks, and basic risk analysis following standard protocols— will largely disappear once systems are fully implemented. These tasks muststill be monitored and updated regularly.
➢ Contract managers must be adaptable and open to lifelong learning, updating their skills, knowledge, methods, and tools continuously.
Through the use of AI, contract management can become moreagile, responsive, and supportive of all areas of the business — including senior management.
Administrative and routine low-value activities can be automated, enabling contract managers to devote more time and energy to developing and optimizing contracts and relationships that carry the highest risks but also hold the greatest potential for organizational value creation.
This evolution — combined with more informed, fact-based decision-making supported by better data — can strengthen human relationships, support knowledge sharing, and elevate the contract management function to amore recognized, strategic role.
As a result, the contract management function may gain greater responsibility, and more contract managers may gain access to leadership levels within their organizations.
Thus, the use of AI in contract management not only enables organizations to better harvest the value embedded in their contracts — it can also enhance the contract manager’s recognition and strategic importance.
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