SaaS Contract - Meaning

A SaaS (Software-as-a-Service) contract is an agreement between SaaS vendor and their buyers that lays out terms and conditions on how end-users may access and use the software, as well as manage subscription and payment. 

Components of a SaaS Contract

SaaS agreements come into the picture when a company chooses to license software instead of buying it. In SaaS agreements, SaaS vendors provide access to software and other technology over a public, private or hybrid cloud,  as against the traditional approach where software was sold as a whole to an enterprise and installed on servers within their premise  In general, SaaS contracts form a class of contracts that are largely similar in nature, construct and obligations, however, the specific services, SLA’s and obligations may vary based on the type of technology or service being offered.

Let’s take an example of Adobe; it offers various subscription models. Adobe Cloud Creator provides customers the alternative to buy an individual subscription or a small business license. Companies similar to Adobe might have SaaS contracts that permit customers to pay as they go, only paying for the software when they use it. Many SaaS contracts are nearly static. The subscriber can prefer the service tier they want to access. However, neither the term nor the price is negotiable. Furthermore, Adobe collaborates with prominent institutions such as universities and corporations. These contracts are typically negotiated by determining the number of users and bandwidth that the client will require, as well as the length of the contract and whether or not they will require personalized or custom support teams. 

Key Clauses to Understand and Evaluate in Every SaaS Contract

As per WorldCC, the most efficient contract managers handle nearly 70% more contracts than the least efficient.

Software-as-a-Service (SaaS) has earned a  notorious reputation of being difficult to track, manage and measure compliance to contractual commitments, obligations, and SLA’S.  This often results in reduced vendor compliance causing a direct impact on the business. So how does one manage SaaS contracts better?

Click Here to Get The Software as a Service NDA Template

Software-as-a-Service contracts serve as a bridge between what the SaaS vendor has control over and what your company expects. It can be challenging to create, manage, negotiate, and maintain an organization’s multiple contracts at once, which is why the process should be carried out on purpose by the appropriate decision-makers. An organization must align the IT and finance departments to ensure each SaaS contract serves business goals. 

The SaaS agreement plays a significant role in making sure you know precisely what the SaaS provides. The agreement ensures legal accountability by both parties. On the surface, SaaS contracts look like any other contract. But beneath the surface, SaaS agreements have necessary layers that are essential to understand and evaluate, especially if you’re the one to sign and manage them.

A typical SaaS contract includes the following sections:

Looks pretty simple to manage all these fields and create contracts easily, correct? But, it isn’t when we see it in the practical world. Managing and monitoring SaaS contracts is painful if you do it manually. It is not as simple as it sounds, to ensure compliance and meet obligations from the SaaS vendor. To effectively manage your SaaS contracts with your SaaS providers, you need to deeply understand each clause in the contract. 

Important Clauses in a SaaS Contract

As mentioned earlier, each SaaS contract may contain distinct terms and clauses. The specific clauses in an agreement will depend on the following relevant information like the industry you serve, the products you sell, or the services you offer. Nevertheless, all cloud service agreements will share certain terms and agreements. This includes:

1. Scope of license

SaaS agreement authorized use provisions ordinarily include most or all of the following:

• The authorized facilities, technologies, and means for accessing and operating the services
• The recognized SaaS services that you may use and the extent of licensed access and use
• The number of authorized users or other defined extent of permitted access or use
• While a SaaS vendor may provide SaaS services exclusively, they are typically offered to many customers in a multi-tenant model of software service distribution.
• The provider may restrict the licensed field of use, for example, by limiting use to your specific business sector, market, or industry.

2. Limitation of liability

A Limitation of Liability clause protects SaaS vendors from legal dangers by contractually binding end-user to be unable to seek certain damages from them. For example, if the software doesn't work and your company suffers damages, the limitation of liability will restrict your company's ability to recoup its loss. 

How the SaaS vendor drafts their Limitation of Liability (often called, LOL) clause depends on the risks involved with their unique SaaS product. Fortunately (or unfortunately), the forms most vendors use for licensing agreements often include limitations of liability that disproportionately favor the vendor. 

Basically, it includes a disclaimer followed by a sentence about capping the total amount of damages a vendor party could, possibly, be liable for under the agreement.

3. Ownership and security of data

When using the software, both the software provider and the users generate a large amount of data. SaaS agreements should clearly outline who owns the data that users enter into the platform. Since SaaS providers are responsible for hosting the customer data, often, data ownership can be a gray area. 

It’s an advisable practice to look for how information is being stored and transmitted and if there are any security restrictions to access stored data. In addition, SaaS agreements should include a privacy policy that details how the provider is using your data, including the information it collects and shares internally or with third parties. This section also includes information on data encryption, how data is backed up, and the provider’s role in the event of a data breach or security issue.

4. Customer service and support

This particular clause should establish how your SaaS vendor will provide support for their services, the response time, and additional guarantees, if any, in terms of expected service. 

5. Subscription plan, model, and pricing

Provisions should blueprint what exactly the subscription plan includes and how the SaaS vendor will deliver your services. Regarding pricing, how and when the detailed costs would be charged should be established precisely in the SaaS contract. As SaaS agreements typically practice a subscription model, the usual payment mode could be monthly, quarterly, or annually. In the subscription-based pricing model, customers pay on a regular basis for continued use of a service or product. 

Optimize Your SaaS Contracts! Explore SaaS Pricing Management and Elevate Your RFP Game. Dive into Aavenir RFPflow Datasheet Now>>

SaaS pricing models are, usually:

• Flat-rate pricing: avail a single product, a single set of features, and a single price.
• Usage-based pricing: pay-as-you-go model
• Tiered pricing: avail multiple "packages," with different combinations of the features provided at different price points
• Per-user pricing: a single user pays a fixed monthly price; add another user, and that price doubles, and so on
• Per-active-user pricing: no matter how many users you pay for, you'll only be charged for those that actually use the software

This is a great area for SaaS contract negotiation because optimizing the SaaS pricing model lowers SaaS vendors’ CAC (customer acquisition cost) through better positioning, packaging, and targeting ideal customers, increasing LTV (lifetime value) through higher prices and better retention.

6. SLAs (Service Level Agreement)

The SLA can be a stand-alone document or a component of a more significant SaaS vendor agreement. An SLA is designed to set minimum performance standards, especially concerning service availability. Nowadays, most cloud service providers include a service level agreement, or SLA, within their SaaS agreement. Check the software's uptime percentage; the smaller the percentage, the more significant the impact on your users' productivity.

Though the industry benchmark is 99.9% guaranteed uptime (meaning that the software's downtime is only .1%), most software providers today offer 99.99% uptime. 

SLAs are more than just a measure of availability; they're also a tool that, irrespective of the underlying architecture, aids in determining if the service meets your needs. 

Typically, SaaS SLA should include:

• Response time for time-sensitive issues, general support, and adding requested (additional) functionality
• Penalties to be levied against the SaaS provider if guarantees are not met and exclusions for which provider will not be obliged to pay the penalty
• Guaranteed software uptime 
• Billing and pricing structure, 
• Security and compliance
• Performance metrics and KPIs

7. Tenure, renewal, and termination

Talking about tenure, most contracts are annual and many extend to between 3-5 years on the enterprise level. 

As per research, Multi-year contracts of around 2.5 years in length or more have an average churn rate of 8.5%.  

Ordinarily, a SaaS contract will have evergreen renewal. This means the agreement will be renewed automatically for another term unless you actively terminate the contract before an established date. Automatic renewal clauses are perhaps most prevalent in SaaS and other subscription-based service agreements. The ease of having the contract period automatically extend saves time and money that otherwise would have been spent renegotiating the contract each time it expires. 

In most cases, the notification period for opting out of automatic renewal is expressed in days, months, or even years before the end of the current term (or, alternatively, before the commencement of the subsequent renewal term). If you neglect to take advantage of this notice time, you may be stuck into another renewal period. In a SaaS agreement, termination for convenience clauses allows the specified party or parties to terminate for any reason. To terminate for convenience, the parties can negotiate whether notice is required, i.e., ten, sixty, or ninety days.

Software that uses AI to identify and extract automatic renewal clauses (as well as other terms that affect their interpretation) can accelerate the work of finding these provisions and enable a more comprehensive review that can otherwise be done manually.

Get started with SaaS contracts!

Salespeople at SaaS companies are the leading creators of SaaS agreements – or at least, they should be. Although SaaS agreements involve numerous stakeholders, the binding obligations that these contracts create are usually defined and controlled by legal. A SaaS agreement might incorporate an order form with an appended MSA, bespoke license agreement, or enterprise package. SaaS agreements create recurring obligations for both SaaS vendors and end-users that obligations could persist for years and with wide-ranging consequences. For this reason, a company’s in-house legal team will usually retain approval rights – mainly if there are deviations from standard terms. Other stakeholders who might want approval rights over SaaS agreements include customer success teams and product and engineering teams.

Worried about understanding, evaluating, managing, and monitoring SaaS contracts for your organization? Try AI-enabled contract management solutions that take away all your worries and provide intelligent outcomes. Try Aavenir solutions to manage  SaaS contracts for their entire lifecycle, leveraging any negotiated clauses,  monitoring for compliance, and then reviewing for renewal or amendments. Book a demo!

Learn how to manage all contractual obligations for SaaS contracts, and move towards the maturity of building your own KYO – Know Your Obligations system.

Introduction 

In the intricate ecosystem of modern business operations, the potency of legal service delivery and contract management cannot be overstated. Organizations are persistently confronted with the challenge to streamline these complex areas while ensuring legal compliance, mitigating risks, and improving operational efficiency. With digital transformation driving the new age of business operations, platforms like ServiceNow and Aavenir have emerged as transformative tools for enterprises across the globe. 

About ServiceNow and Aavenir 

ServiceNow, a global leader in digital workflows, offers innovative solutions to replace unstructured work patterns with intelligent workflows, thereby enhancing productivity. Among their wide array of services, Legal Service Delivery has revolutionized legal operations for businesses worldwide. 

On the other hand, Aavenir, with its prowess in connected source-to-pay solutions, has been a game-changer in the procurement and finance arenas. Aavenir's Contractflow is a significant offering that simplifies and automates contract creation and end-to-end contract lifecycle management. 

The combination of these two forces - Aavenir Contractflow on the ServiceNow platform - offers a comprehensive solution for legal service delivery and contract management. 

Deep Dive into Aavenir Contractflow 

Aavenir Contractflow is a state-of-the-art solution designed to automate and standardize the entire contract lifecycle. Built on the robust ServiceNow platform, Contractflow uses AI-driven workflows to manage contracts from initiation to completion. 

Key features include obligation management with AI-enabled extractions, flexible and adaptable workflows, and an intuitive supplier portal for efficient contract collaboration. With Aavenir Contractflow, organizations can ensure contract compliance and regulatory adherence while enhancing their vendor management experience. 

How the Connected ServiceNow Legal Service Delivery with Aavenir Contractflow Experience can help? 

ServiceNow Legal Service Delivery (LSD) with Aavenir Contractflow can unlock several exciting use cases that bring significant business value. 

Streamlined Contract Creation and Review 

The integration of Aavenir Contractflow with ServiceNow LSD allows for streamlined contract creation and review processes. Legal teams can leverage Aavenir's AI capabilities to quickly draft contracts and then feed these into the LSD for in-depth legal review. This integration enables organizations to accelerate contract creation and review, reducing the time spent on these tasks and allowing legal teams to focus on more strategic work. For example, a multinational technology corporation implemented this integrated solution and reduced their contract creation and review time by 40%. This acceleration enables legal teams to focus on more strategic work, such as negotiating complex clauses or advising on critical legal matters. 

Unified Contract Repository 

With this integration, organizations can maintain a unified contract repository where all contracts are managed, tracked, and stored. This helps to enhance visibility and control over all contractual agreements across the organization. Stakeholders can access, review, and monitor contract details, statuses, and key dates from a single interface. For instance, a leading financial institution adopted the integrated solution and achieved a 30% improvement in contract visibility and 20% reduction in contract search time, leading to enhanced decision-making and risk management. 

Automated Compliance and Obligation Management 

The integration helps in automating compliance and obligation management. Aavenir Contractflow can automatically extract obligations and compliance requirements from contracts using AI, and these can then be managed and tracked within ServiceNow LSD. This eliminates manual tracking of obligations, reduces the risk of non-compliance, and ensures that all contractual obligations are met on time. For example, a pharmaceutical company successfully implemented the integrated solution and reduced their compliance-related errors by 50%, leading to improved regulatory adherence and risk mitigation. 

Improved Collaboration 

The integration of these platforms also improves collaboration among stakeholders. Contract-related tasks and approvals can be managed within ServiceNow LSD, leveraging its powerful collaboration and workflow capabilities. This ensures that all stakeholders are on the same page and that contract-related tasks are completed efficiently and effectively. For instance, a global manufacturing company implemented the integrated solution and experienced a 35% reduction in approval cycle time, enabling faster contract execution and improved supplier relationships. 

Advanced Analytics and Reporting 

Aavenir Contractflow integrated with ServiceNow LSD offers advanced analytics and reporting capabilities. Organizations can gain valuable insights into contract performance, compliance metrics, and vendor performance. These insights empower organizations to make data-driven decisions, optimize contract processes, and identify areas for improvement. For example, a telecommunications company leveraged the integrated solution to analyze contract cycle times, identify bottlenecks, and implement process improvements that resulted in a 20% reduction in contract cycle time. 

Scalability and Flexibility 

The combined power of Aavenir Contractflow and ServiceNow LSD provides scalability and flexibility to meet the evolving needs of organizations. As the volume of contracts and complexity of legal operations increase, the integrated solution can seamlessly handle the growing demands. It offers configurable workflows, customizable templates, and the ability to integrate with other systems, allowing organizations to adapt and scale their contract management processes. For example, a retail company expanded its operations globally and relied on the integrated solution to handle a significant increase in contract volume while maintaining consistency and efficiency. 

Accelerate Legal Service Delivery with Aavenir Contract Lifecycle Management. Read More>>

Conclusion 

The integration of Aavenir Contractflow and ServiceNow Legal Service Delivery offers an unparalleled solution for businesses looking to enhance their legal services and contract management operations. This powerful combination enables organizations to automate workflows, improve compliance, gain valuable insights, and ultimately drive greater business outcomes. By harnessing the capabilities of AI-driven contract management and intelligent workflows, organizations can streamline operations, reduce risks, ensure legal compliance, and make data-driven decisions. 

The future of legal service delivery and contract management is here. Explore the benefits of integrating Aavenir Contractflow with ServiceNow Legal Service Delivery. Transform your legal operations and experience the power of automation and intelligent workflows firsthand. For more information and to see how the integrated solution can meet your specific business needs, get in touch with our experts. 

Were you unable to attend our exclusive live session on best practices to unlock the contract potential at the ServiceNow Knowledge 2023 Event? Don't worry! Here's a recap and summary of what you missed.

In the ever-evolving world of business, the ability to manage contracts effectively has become crucial. With organizations dealing with hundreds to thousands of agreements, the management of contracts can become an overwhelming task, giving rise to numerous pain points. 

Current Contract Management Pain Points 

Every organization has a unique set of challenges when it comes to managing their contracts. Yet, there are a few common pain points that many companies grapple with: 

1. Lack of Centralized Access: Without a single, centralized system to access contract information, organizations may encounter delays, errors, and inefficiencies during the contract creation process. 

2. Scalability: Scaling existing processes across tens of thousands of agreements can turn into a nightmare, adding to the administrative burden and the risk of errors. 

3. Difficulties in Modifying Business Terms: The task of adding a new business term can be time-consuming and complex, particularly when contracts are scattered across various systems. 

4. Non-standardized Contract Templates: The lack of approval controls and standardized contract templates exposes organizations to increased business and regulatory risks. 

5. Challenges with Agreement Intake Process: Companies may struggle with managing their agreement request intake process, leading to disorganization and miscommunication. 

6. Data Integrity Issues: Maintaining data integrity across various systems is a common challenge that impacts relationships with customers and vendors. 

These challenges, if not addressed, can lead to contracting inefficiencies, high costs of maintaining legacy systems, and increased business and regulatory compliance risk. 

Facing Contract Management Challenges? AI Can Help Driving Contracting Excellence. Read More>>

Best Practices to Unlock Contract Potential 

To overcome these challenges and unlock the potential of your contracts, the following best practices can be adopted: 

Best Practice 1: Define Goals & Objectives 

Start by defining your contract management goals. Focusing on the following objectives can streamline your contract management process and drive efficiencies: 

1. Single Source of Truth: Aim to centralize your contracts and related data in a single, accessible location. 

2. Drastic Efficiency Gains: By automating repetitive tasks, you can save valuable time and resources. 

3. Reduced Risk: With standardized templates and automated approval workflows, you can minimize business and regulatory risks. 

4. Reduced Data Integrity Risk: By integrating contract data across your systems, you can maintain data integrity and improve customer and vendor relations. 

5. Stronger Vendor and Customer Management: Enhance your vendor and customer relationships by keeping all contract-related communications and actions transparent and timely. 

Best Practice 2: Focus on User Adoption 

User adoption plays a vital role in the successful implementation of a contract management solution. Engage your users early in the process and throughout the implementation phase to ensure a smooth transition. Focus on enhancing your existing solution by adding the following capabilities: 

1. Repository & Search: A centralized contract repository with advanced search features can help users locate contracts quickly and easily. 

2. Connected Data & Processes: By connecting your contract data and processes, you can facilitate collaboration and ensure consistency across the organization. 

3. Dashboards & Notifications: Dashboards offer a visual representation of contract data, while notifications ensure timely action on contracts. 

4. Contract Lifecycle Workflows: Automating contract lifecycle workflows can streamline contract creation, approval, and management. 

5. Contracts (NDA, SOW, MSA, 3PP): Standardizing your contract templates for NDAs, SOWs, MSAs, and third-party agreements can save time and minimize errors. 

6. Obligation, Deviation, Risk: By tracking contractual obligations, deviations, and risks, you can maintain compliance and minimize potential pitfalls. 

Best Practice 3: Focus on the Platform 

Choosing a contract management platform that suits your business needs is crucial. Here are some considerations: 

1. Workflow Flexibility: Choose a platform that offers flexibility in setting up contract approvals, reviews, and lifecycle management workflows. 

2. Customization Flexibility: The platform should allow customization of contract templates, layouts, and new attributes to cater to your unique needs. 

3. UX Richness: A user-friendly interface with features such as lifecycle visualization, and advanced contract repository browsing and search functionality enhances user experience. 

4. Alerts, Notifications, Reminders: The system should offer customizable alerts, notifications, and reminders for important contract events and progression milestones. 

5. Security: Given that contracts contain confidential information, it's important that the platform offers robust data and action access controls. 

Best Practice 4: Focus on the Platform for the Future 

Your chosen contract management platform should not just cater to your current needs, but also have the potential to scale and evolve with your future requirements. Here are some key considerations: 

1. Performance, Technical Scalability, and Security: The platform should offer high performance and the ability to scale as your business grows, without compromising on security. 

2. Availability of Complementary, Superior-grade Applications: The platform should have the capacity to integrate with other key business applications seamlessly. 

3. Administration Benefit Leverage: The platform should offer administrative benefits such as easy configuration and maintenance. 

4. Smooth Connectivity Across Processes, Data, Insights: A platform that allows smooth connectivity across various processes, data, and insights can greatly enhance your contract management capabilities. 

5. UX Consistency and Richness Across Applications: The platform should offer a consistent and rich user experience across all integrated applications. 

Best Practice 5: Crawl, Walk, Run 

Transitioning to a new contract management system is a journey. Start slow, understand your system thoroughly, and gradually increase your usage and capabilities. Don't attempt to do it all by yourself. Partner with a trusted contract management solution provider who can guide you through the implementation process and beyond. 

Finally, it's important to understand that contract management is a maturity model that evolves over time: 

1. Contracts & Terms in a Centralized Repository: Start by centralizing your contracts and terms in a single repository. 

2. Process Maturity with Clause and Template Standardization: Next, standardize your clauses and templates to ensure consistency across your contracts. 

3. Power of ML & AI Using Connected Data: Leverage the power of Machine Learning and AI to derive insights from your connected data. 

4. Skyrocket Your ServiceNow ROI: Lastly, optimize your use of the ServiceNow platform to maximize your return on investment and enhance your contract management capabilities. 

Unlocking your contract potential requires a strategic approach that focuses on defining clear goals, ensuring user adoption, selecting the right platform, and planning for future needs. By doing so, you can transform your contract management process, minimize risks, and enhance operational efficiency. 

Don't let contract management challenges hold your business back. Discover with Aavenir how you can revolutionize your contract management process. 

Conclusion 

Navigating the contract management maze can be daunting, but it doesn't have to be. By following these best practices, you can unlock the full potential of your contracts and achieve significant efficiency gains. Remember, the journey to contract management maturity is a marathon, not a sprint, and the right contract management solution can be a game-changer for your organization. Take the first step today and schedule a demo to see how you can transform your contract management process. 

In the world where business operates at the speed of light, managing contracts effectively has never been more critical.

According to a study by the International Association for Contract & Commercial Management (IACCM), companies lose an average of 9.2% of their total revenue due to sub-optimal contract management.

This stark statistic underscores the undeniable impact of contract management on a company's bottom line. 

Current Contract Management Challenges: 

Global businesses face the daunting task of handling millions of contracts and obligations daily, which adds a significant burden to their operational efficiency. Furthermore, the presence of teams dispersed across various geographical locations makes coordination a challenging task. 

In the current scenario, contract management systems are filled with manual processes, including approvals, resulting in a lack of end-to-end process visibility. Without standardized workflows across teams, the process often involves a heavy back-and-forth, causing unnecessary delays and inefficiencies. The use of non-standard templates and manual assembly only exacerbates the issue. Additionally, disconnected and inflexible systems are unable to adapt to the ever-evolving business needs, leading to inefficiencies, revenue impact, risk exposure, and relationship deterioration. 

Understanding the Anatomy of a Contract: 

Contracts form the backbone of every business relationship. Understanding the structure of a contract is vital to managing and utilizing them effectively. A standard contract usually consists of several key sections: 

1. Contract Header Terms: This includes basic information like parties involved, contract duration, and effective date. 

2. Clauses: Clauses lay out the terms and conditions of the agreement. They define the rights, obligations, and remedies of the parties. 

3. Milestones and Deliverables: These specify the key achievements and products to be delivered under the agreement. 

4. Payment and Other Terms: This section outlines the terms of payment, including amount, schedule, and mode of payment. 

5. Obligations: These are duties that each party must perform under the agreement. 

6. Pricing Schedule, Payment Schedule, Incentives & Rebates: These define the financial aspects of the contract, such as pricing, payment terms, and potential discounts. 

7. Sub-contractors: This part details the conditions under which parties may subcontract work. 

8. Freight Schedule: For goods contracts, this section outlines delivery terms, shipment, and logistics. 

9. Regulatory Addendums: This section includes any additional legal or regulatory requirements applicable to the contract. 

While the benefits of a connected contract experience are undeniable, the path to achieving it is riddled with challenges. Delivering a connected experience requires extensive integrations, running the risk of duplicate data and data extraction complexities. The customization required can also lead to inconsistent experiences across systems. 

How can Connected Contract Management Experience Help Procurement & Contract Teams?  

Here are some use cases that showcase the benefits of employing connected contract management in their workflows: 

1. Vendor Selection and Onboarding: With connected contract management, procurement managers can efficiently streamline the process of vendor selection. By integrating vendor data, contract terms, and compliance requirements, they can make more informed decisions and expedite the vendor onboarding process. 

2. Spend Analysis: Procurement managers can leverage contract management systems to analyze spending data. By connecting contract terms with purchase orders and invoices, they can identify spending patterns, negotiate better contracts, and optimize procurement strategies. 

3. Contract Renewal Automation: Contract managers can use connected contract management to automate the renewal process. By setting reminders and triggers, the system can notify the contract manager of upcoming renewals, enabling them to assess contract performance and renegotiate terms if necessary. 

4. Compliance Tracking: By integrating contracts with compliance tracking tools, contract managers can ensure that all parties adhere to regulatory requirements and contractual obligations. This aids in reducing legal risks and ensuring smooth contract execution. 

5. Obligation Management: Contract managers can effectively track and manage obligations within contracts. For instance, if a vendor is obligated to provide certain reports or meet specific service levels, the contract management system can monitor these aspects and alert managers if there are any discrepancies. 

6. Real-time Collaboration: A connected contract management system enables real-time collaboration among teams. This is particularly beneficial when contracts need to be reviewed and edited by multiple stakeholders, ensuring that everyone is working on the most current version of the document. 

7. Risk Mitigation: By integrating risk assessment tools into the contract management system, procurement managers can identify high-risk contracts or vendors. This allows them to take proactive measures in negotiating contract terms to mitigate potential risks. 

8. Sourcing Optimization: Procurement managers can use contract data to optimize sourcing strategies. By analyzing contract terms, pricing, and vendor performance data, they can identify opportunities for consolidating suppliers or negotiating bulk purchase discounts. 

9. Contract Template Standardization: Connected contract management systems often contain standardized contract templates. This helps in maintaining consistency in contracts across the organization and speeds up the contract creation process. 

10. Supplier Performance Tracking: Contract managers can use connected contract management systems to continuously track supplier performance against KPIs and contract terms. This information can then be used in future negotiations, contract renewals, or even in deciding to switch suppliers. 

11. Dynamic Negotiations: By having historical data and analytics at hand, procurement managers can engage in more dynamic and data-driven negotiations with suppliers. This can lead to better terms and conditions, ensuring a more advantageous position for the organization. 

Connected contract management systems enhance the capabilities of procurement and contract managers by automating repetitive tasks, providing valuable insights, and ensuring that contracts are managed efficiently and effectively. 

How to Get the Connected Experience Using ServiceNow? 

ServiceNow's comprehensive suite of products can be enriched with integrated contract management. For instance: 

• PSM (Project Portfolio Management): Contract milestones and deliverables can be linked to project tasks, facilitating seamless project management. 
• LSD (Legal Services Delivery): Contracts can define legal services and obligations, thus enabling efficient management of legal services. 
• PPM (Project Portfolio Management): Contractual obligations can be tied to project objectives and deliverables, ensuring alignment with strategic goals. 
• ITSM (IT Service Management): IT service contracts can be managed effectively, with clear visibility into service levels, obligations, and penalties. 
• ITAM (IT Asset Management): Contracts can govern asset usage, maintenance, and retirement, supporting comprehensive asset lifecycle management. 
• GRC (Governance, Risk, and Compliance): Contract compliance can be tracked and managed effectively, reducing legal and regulatory risks. 
• VRM (Vendor Risk Management): Vendor contracts can be managed and monitored for risk, enhancing vendor relationship management. 
• SLM (Service Level Management): Contracts can define service level agreements, enabling efficient service level management. 

ServiceNow + Aavenir: Enabling Connected Experience 

Aavenir's contract management solution enables enterprises to leverage ServiceNow's robust capabilities through several key enablers: 

• Zero-Integration Connectivity on Single Data Model Platform - ServiceNow: Aavenir's solution integrates seamlessly with ServiceNow, eliminating the need for complex integrations. 
• Rich Structures for Metadata Capture: The solution offers robust metadata capture capabilities, ensuring comprehensive contract data collection. 
• AI-enabled Extractions and Insights: Aavenir leverages AI to extract contract data and provide valuable insights, enhancing decision making. 
• API and Packaged Integrations with External Solutions: Aavenir supports API and packaged integrations, enabling interoperability with other solutions. 
• Rich set of Enterprise Applications on ServiceNow: Aavenir's solution leverages ServiceNow's comprehensive suite of enterprise applications. 
• Configurable Widgets for Data & Insights Delivery – at the Right Time: The solution includes configurable widgets, delivering data and insights when needed. 

Experience the Connected Contract Management Experience with Aavenir 

Unlock the power of connected contract management with Aavenir Contractflow and other Aavenir source-to-pay products built on the ServiceNow platform. Don't let contract management challenges hold your business back. Schedule a demo today and discover how Aavenir can revolutionize your contract management process. Embrace efficiency, risk mitigation, and revenue enhancement with Aavenir's connected contract management experience. 

Legacy contract migration can be a daunting task for organizations, often burdened with heaps of outdated contracts and manual processes. However, the advent of artificial intelligence (AI) brings transformative capabilities to streamline and automate the contract migration process. In this blog, we will explore the challenges faced during legacy contract migration, key statistics that highlight the need for AI-driven solutions, the role of AI in contract migration, and how Aavenir Contractflow built on the ServiceNow platform, offers a powerful AI solution for efficient and accelerated contract migration. 

Key statistics driving the need for AI in contract migration.  

• According to Gartner, AI will be a critical component of 80% of all digital projects by 2022. 
• Deloitte reports that AI-driven contract analysis and migration can reduce costs by up to 60% and increase contract processing speed by 70%. 
• The International Data Corporation (IDC) predicts that the global AI market will reach $190 billion by 2025. 

Third-party or legacy contract migration challenges 

Migrating legacy contracts poses numerous challenges for organizations, including: 

High data volume

Organizations often have a massive volume of legacy contracts that need to be migrated, making it a time-consuming and resource-intensive process. 

Manual data extraction and entry

Extracting contract data from disparate sources and manually entering it into new systems is error-prone and can result in data inconsistencies. 

Complex contract structures

Legacy contracts often have intricate structures, with varying sections, clauses, and amendments that require careful analysis and mapping during migration. 

Incomplete or missing information (metadata)

Legacy contracts may lack structured metadata, making it difficult to categorize and search for specific terms or provisions. 

Regulatory compliance

Ensuring compliance with evolving regulations while migrating legacy contracts adds an additional layer of complexity. 

What are the AI capabilities of Aavenir Contractflow for Contract Migration?

Aavenir Contractflow’s AI brings in several capabilities to contract migration, such as: 

1. Accelerated data extraction: The machine learning and Aavenir AI-powered algorithms can automatically extract key contract terms from legacy contracts, eliminating the need for manual data entry and significantly reducing migration time. 

2. Intelligent data mapping: Aavenir AI analyze and maps contract clauses, terms, and metadata to new contract templates, ensuring accurate migration and maintaining contractual integrity. 

3. Enhanced data accuracy: Aavenir AI algorithms identifies and corrects data inconsistencies, errors, or missing information during migration, resulting in improved data accuracy and reliability. 

4. Automated compliance checks: Aavenir AI can perform comprehensive compliance checks during contract migration, flagging potential risks or violations and ensuring adherence to relevant regulations. 

What is the process for AI-powered contract migration? 

The process for contract migration with AI typically involves the following steps: 

1. Data extraction: AI algorithms extract relevant data from legacy contracts, including clauses, dates, parties, and metadata. 

2. Data validation and cleansing: The extracted data is validated, cleansed, and standardized to ensure consistency and accuracy. 

3. Contract mapping: AI algorithms map the extracted data to the desired structure or template in the target system, aligning clauses, sections, and other contract elements. 

4. Metadata enrichment: AI enriches the contract metadata, making it easier to categorize, search, and retrieve specific contract terms or provisions. 

5. Compliance and risk analysis: AI performs automated compliance checks, flagging potential risks or violations based on predefined rules and regulations. 

6. Migration and integration: The migrated contracts are seamlessly integrated into the new system, ensuring a smooth transition and continuity of operations. 

Why choose Aavenir Contractflow to streamline your contract migration with AI on ServiceNow?

Aavenir Contractflow, a cutting-edge AI-powered contract management solution built natively on the ServiceNow platform, offers suite of contract management features specifically designed for efficient contract migration. Some key features include: 

1. Intelligent contract data extraction: Aavenir Contractflow's AI algorithms extract contract data accurately and swiftly from legacy documents, significantly reducing manual effort and time. 

2. Automated contract mapping: The solution intelligently maps extracted data to new templates or structures, ensuring seamless migration while maintaining contractual integrity. 

3. Smart data validation: Aavenir Contractflow validates and cleanses extracted data, automatically identifying errors or inconsistencies for quick resolution. 

4. Compliance monitoring: The solution performs automated compliance checks during migration, ensuring adherence to relevant regulations and minimizing risk exposure. 

5. Seamless integration: Aavenir Contractflow seamlessly integrates with ServiceNow, providing a unified platform for end-to-end contract lifecycle management and migration. 

How much time is required for contract migration?  

The time required for contract migration varies based on the volume and complexity of contracts. However, leveraging AI-powered solutions like Aavenir Contractflow can significantly reduce migration time compared to traditional manual methods. 

Read customer success story on how voluminous legacy contracts were successfully imported from the client's existing CLM software and stored in the Aavenir Contract repository.

Common types of contracts suitable for migration  

Aavenir Contractflow supports the migration of various contract types, including but not limited to: 

1. Purchase Agreements 

2. Service Level Agreements (SLAs) 

3. Non-Disclosure Agreements (NDAs) 

4. Software License Agreements 

5. Vendor Agreements 

6. Employment Contracts 

7. M&A Contracts 

8. And more 

Next steps 

Legacy contract migration can be complex and time-consuming, but with Aavenir Contractflow, organizations can streamline the process, reduce errors, ensure compliance, and accelerate the migration timeline. Embrace the power of AI in contract migration and experience the transformative benefits of efficient contract management.  

To learn more, request a demo of Aavenir Contractflow.