When reviewed and negotiated with the power of artificial intelligence (AI), nuanced multi supplier framework agreements mitigate risk through playbook adherence. Additionally, by streamlining vendor relationships with AI-leveraged multi supplier framework agreements, companies can increase efficiency and productivity while enabling attorneys to focus on more complex or strategic tasks. Below, we’ll survey the benefits of these agreements and examine how corporate legal departments and other organizations leverage AI technology today.
What are the Benefits of a Multi Supplier Framework Agreement?
Legal departments often employ multi supplier framework agreements when establishing long-term supplier relationships. Listed below are some of the benefits that a multi supplier framework agreement offers:
- Saves time sourcing goods, supplies, and services: The standard procurement process—from initial review to delivery—can require 16-18 months to complete. Alternatively, a framework agreement can be executed in a fraction of the time since it precludes the necessity to renegotiate standard terms and conditions for each prospective vendor.
- Centralizes purchasing through demand aggregation: A multi supplier framework agreement aggregates the suppliers of similar goods and services into a shared contract. As a result, companies can negotiate better deals while significantly reducing the legal department’s workload.
- Protects against potential supply shortages: Multi supplier framework agreements help ensure supply security, as shortfalls can be remedied by allocating more of the contract order to another bidder. Additionally, framework agreements offer the freedom to award contracts without vendors at a moment’s notice, without having to advertise, accept bids, or consider award criteria.
- Improves vendor relationships: Over long purchase periods, framework agreements improve relationships between buyers and sellers. By encouraging competition, these agreements can inspire manufacturers or distributors to invest in equipment, training, technology, and personnel.
How AI Improves Multi Supplier Framework Agreements and Simplifies Vendor Relations
In the past, legal software provided lawyers with templates for the contract drafting process. While lawyers may have welcomed these templates, the process was far from automated. The new generation of AI-powered legal software goes far beyond rudimentary “fill-in-the-blank” technology. By harnessing the power of machine learning, natural language processing (NLP), and artificial intelligence, software can now perform the work of a real attorney by reviewing, redlining, and suggesting inline corrections—all in a matter of minutes.
How AI benefits corporate legal teams working on multi supplier framework agreements:
- AI learns by assessing data from source materials. Legal departments can fine-tune the technology to reflect AI Digital Playbook guidance using training samples from their contract repository.
- AI reviews contracts using NLP techniques to tag key sections for further review, highlight key terms, and flag areas for risk mitigation. An AI-powered contract negotiation platform can extract data, clarify context, locate key information, and reduce liability to enable legal and sales teams to work smarter and faster.
- AI provides insight on negotiation bottlenecks by pinpointing the most commonly negotiated clauses. Best practices are implemented into the software’s recommendations using successfully negotiated agreements as a guide.
- AI solutions are predominantly cloud-based and have little to no impact on existing IT infrastructures so that organizations can immediately realize time-savings along with productivity and compliance gains.
Ultimately, companies and their vendors seek agreements that will simplify and sustain their long-term relationships. Artificial intelligence facilitates this process by accelerating contract review and negotiation. AI legal tools are powering the new frontier in contract negotiation where contracts that had previously taken weeks or months to complete can now be executed in days.
LexCheck is an AI-powered contract negotiation platform that can accelerate your multi supplier framework agreement process while ensuring playbook adherence. To learn more about what we offer, request a demo.