A Fortune 100 financial institution – which manages a vast array of procurement contracts - sought to streamline its procurement operations by leveraging Generative AI (GenAI) to improve contract management. The goal was to automate contract reviews, standardize agreements, and enhance compliance while identifying cost-saving opportunities. Partnering with Photon, the institution developed a GenAI-powered solution to transform its contract management processes, resulting in increased efficiency, compliance, and operational savings.
Optimizing Procurement Contract Management with GenAI
The Challenges
The financial institution faced several challenges in managing its contracts across various departments:
Inconsistent Contract Terms: The lack of standardization across vendor contracts made it difficult to maintain uniform agreements.
Manual Review Process: Reviewing contracts manually was time-consuming and prone to errors.
Limited Historical Insights: Tracking changes and revisions across multiple contracts was challenging, limiting transparency and audit readiness.
Cost-Saving Opportunities: The institution needed a better way to identify opportunities for bundling or unbundling services to maximize savings.
The Solution
Photon introduced a GenAI-driven contract management solution that leveraged Large Language Models (LLMs) to transform how the institution handled contracts.
Automated Contract Analysis
GenAI analyzed both existing and new contracts, offering insights into potential areas for standardization, better terms, and cost savings opportunities through bundling or unbundling services.
Contract Scoring and Suggestions
The system assigned an overall contract score, highlighting key areas for improvement. Suggestions were provided to enhance the quality of contracts, with an option to accept recommendations and increase the contract score.
Historical Change Tracking
The system automatically tracked all historical revisions made to contracts, including changes made by different individuals and the times they were made. This provided a comprehensive view of the contract’s evolution, ensuring transparency and compliance.
Improved Audit and Compliance
Recommendations were offered to improve the audit and compliance quality of contracts, ensuring that all agreements adhered to stringent regulatory requirements.
Results
The GenAI contract management solution provided the client with significant improvements in efficiency, accuracy, and cost savings:
Streamlined Contract Review Process
The automated assessment of contracts reduced the time required for manual reviews, allowing procurement teams to focus on higher-value tasks.
Standardized Contract Terms
The system helped ensure consistency across contracts, reducing discrepancies and improving negotiation outcomes.
Cost Savings
By identifying opportunities for bundling or unbundling services, the system uncovered potential savings, leading to more favorable contract terms and reduced costs.
Enhanced Compliance and Transparency
The automated tracking of contract revisions improved compliance and audit readiness, ensuring that the institution met all regulatory requirements with ease.
Technology Stack
The solution was built on a scalable and robust technology stack to integrate seamlessly with the institution’s procurement processes:
Azure OpenAI: Powers the AI-driven contract analysis and scoring.
Contract Upload and Management System: Allows users to upload, view, and track contract revisions.
Audit and Compliance Tools: Enhances the compliance and audit readiness of contracts.
Conclusion
By implementing a GenAI-driven contract management solution, this leading financial institution significantly improved its procurement operations. The automation of contract reviews, combined with enhanced compliance and cost-saving insights, resulted in a more efficient and transparent contract management process. This case study illustrates the transformative power of AI in financial services.
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"AI is truly a game changer in procurement and contract management, especially for the financial services industry. By leveraging Generative AI, we can automate complex contract reviews, enhance compliance, and identify cost-saving opportunities that were previously difficult to uncover. This technology is transforming not only how contracts are managed but how financial institutions approach procurement as a whole."
Mukund Balasubramanian
Co-founder & CTO, Photon
