Artificial intelligence can make contracts easier

MILPITAS, CA—Artificial intelligence (AI) will play a major role in hospitality going forward. From the virtual concierge that learns with every question and request from guests, to smarter search capabilities when potential travelers are looking to book a stay, there are myriad applications for AI in the hotel environment going forward. But, have you thought about how AI can be applied to smart contracts?

In the hospitality industry, there are a plethora of contracts and agreements that one company can have. And in each and every one of those contracts, there can be numerous clauses that affect a company’s business. That’s one of the reasons why Abbyy, a global provider of content intelligence services, launched a new system to read contracts using AI.

“The hospitality industry is focused on servicing customers and ensuring amazing customer experiences; however, a necessary evil is defining the terms of specific arrangements with vendors and partners,” said Bruce Orcutt, VP of global product marketing at Abbyy. “This requires contracting resources to create, manage and ensure compliance with contracts and agreements. By the nature of its business, the hospitality industry is dealing with high volumes of contracts with multiple dimensions, clauses and terms that all need to be managed. Automating the understanding of the context within the contract is very important and helps hospitality companies to allocate high-value resources to other tasks and projects.”

Abbyy Text Analytics for Contracts is a managed service that automatically discovers insights from contracts and leases to speed up risk mitigation, obligation analysis and content migration. It has a human-like understanding of contracts, using advanced linguistic and machine-learning capabilities that speed read contracts and pinpoint sections, clauses and entities of note, according to the company.

“Meaningful contract data is locked within documents, requiring costly manual reviews to identify, validate and enter this information into a system of record, including contract lifecycle management systems, business process management (BPM) systems, customer relationship management (CRM) systems, electronic management (ECM) systems, or robotic process automation (RPA),” Orcutt said. “Not only is the burden of manually locating and entering information with human resources high, but errors, process latency and lack of an understanding of relationships is very costly. Department managers and business processes dependent on contracts are stopped while information is manually identified and administered causing delays, errors and frustration for users and customers alike. Billions of dollars each year can be lost due to contractual failed compliance, commitments and obligations. Abbyy Text Analytics for Contracts helps customers to automatically identify critical data within contracts, eliminating costly and error-prone human touchpoints.”

With Text Analytics for Contracts, businesses can leverage Abbyy’s entire technology portfolio to accelerate time-to-value and implement their contract lifecycle management, robotic process automation and digital transformation strategies. “The solution is delivered as a managed service that automatically segments contracts and recognizes terms, commitments and obligations through the understanding of entities, relationships and facts,” Orcutt said. “Understanding insight locked within contracts makes critical information visible to the contract lifecycle management system, improves decision making while streamlining the time to intelligence, and ensures regulatory and internal compliance.”

Described as a modular, extensible and scalable cloud-based architecture, the platform has zero infrastructure footprint and enables contract processing as well as discovery, review and analysis workflows that can be easily customized. Clients can run teams across multiple time zones, 24/7, using multi-tier review and analysis workflows. Meanwhile, Abbyy service personnel simplify customer engagement by taking responsibility for configuration, staging and processing of documents, designed to accelerate the delivery of contract-based intelligence to client personnel.

There are many advantages to using an AI solution. “The biggest advantage of using advanced AI and natural language processing capabilities is the system automatically detects and extracts clauses and terms accurately and quickly,” he said. “When low-confidence results or errors are identified, the system will learn and automatically improve over time based upon user interaction. AI is extremely helpful to understand the true meaning of the text within the contract.”

Who would this solution work best for? According to the company, the service would work well for both large and medium-sized companies, as well as large-scale system integrators and independent software vendors who need to automatically leverage the intelligence embedded within sectioned documents, such as contracts, leases and regulatory filings, to augment business decision-making processes and ensure compliance with emerging regulations such as GDPR.

“The language around contracts is mostly consistent across industries; however, the hospitality industry has a unique nomenclature specific to its market,” Orcutt said. “The solution works for hotels processing a large volume of existing contracts for migration and analytics purposes, in addition to supporting go-forward processing. There is no real distinction between larger organizations or small sole proprietorships when it comes to understanding their contracts. However, customers seeking to automate their contract and analytics projects are normally looking for an ROI within six months with immediate positive impact on processes and quality of data. This means that larger organizations are quicker to adopt this type of solution as they see significant benefits quickly given the larger number of contracts to process.”

Orcutt pointed to a recent project implemented for a global consulting company that was working with a top-five global hotel chain. “Our managed services supported a finance and account shared-service operation for the hotel chain by reviewing and extracting contracts,” he said. “The system processed 2,000-plus legacy contracts related to management and franchise agreements. Within the contracts we were processing dozens of entities and clauses contained within 80- to 200-page agreements.”

Looking toward the future, Orcutt said, “AI and natural language processing are emerging technologies, and the opportunity for automation is immense. The ability to leverage deep learning techniques against large data sets will give us even more insight and understanding about contracts that can have an even bigger impact on the business.” HB