The so-called Great Resignation due to the personal and business disruptions from the pandemic and re-evaluation of work norms has caused a surge in outsourcing professional services through contracts.
There are a number of reasons why outsourcing certain work can make sense for businesses. Positions can be quickly backfilled where personnel losses are heavy, hiring is difficult, and experience is scarce. Outsourcing work can increase flexibility, accomplish project-specific short-term goals, deploy specialized and deep experience, or the opposite – deploy temporary assistance for laborious and tedious low-skill tasks.
Whatever the business reasons and purposes, there is at least one important, often overlooked aspect to consider: while full-time employment agreements can be quite standard in a company, professional services agreements may NOT be standard. Instead, they often will be quite specific to the details of the work. Professional Services Agreements (PSAs), Master Service Agreements (MSAs) and Statements of Work (SOWs) will be as varied as the intended work to be accomplished.
Regularly analyzing all the details in service provider contracts and their variations adds an additional dimension to managing talent.
There is much to consider in these contracts: the scope of work, deliverables, timing, notifications, risk-sharing, pricing, legal terms and conditions, confidentiality, safety, and more. The contracts will likely reflect a B2B negotiation between two companies, rather than a company and an individual, increasing the complexity by an order of magnitude.
One option for managing contracts has been to work with intermediary service firms who manage the details and complexity for you. By hiring an expert in outsourced talent, you are essentially outsourcing the outsourcing process. While this sounds even more complex, perhaps it is necessary, given the expertise desired. The firm can help analyze pricing and availability across a wide range of individuals and companies in their network, to provide a valuable match-making service.
Another option is to simply take on more contract management in-house, knowing that this will be a more permanently expanded function, managing contractors and partners.
Or, if not hiring more contract managers internally, perhaps just outsourcing legal assistance can assure the organization that all the details are taken care of before the contracts take effect.
A new attractive option is to apply AI assistance to your contract management, procurement, legal, and business teams. This can allow your existing teams to amplify their impact, reviewing the contract details as needed, without reading every word of every contract over and over.
As an example, Docugami can enable any business user to simply upload contracts for processing, then specify what information they would like from a batch of contracts, by pointing and clicking at terms in a couple of sample documents. Voila! All the variations in any terms can appear in a spreadsheet.
Furthermore, the contracts do not have to originate from the same template to extract information. Docugami’s sophisticated AI can infer commonalities in the data, across very different document structures. If a batch of legal documents are for similar purposes (i.e. MSAs for IT services, NDAs, SOWs for engineering services, etc.) the patterns of the data can be detected automatically.
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The result of having AI assistance for contract management and review is better management of a variety of vendors. You can see pricing trends, liability risks, notifications that are due, and safety rules – whatever is needed at any point, in just minutes. A detailed analysis no longer takes hours of valuable staff time.
In fact, we are finding that the experts, the companies that you may hire to outsource the outsourcing process are discovering huge value in Docugami’s AI contract review software. As they handle more contracts, they can serve their clients better, faster, and more cost-effectively, by having the data for their contracting network at their fingertips.
Organizations of all sizes are finding that they have existing contracts in place that need regular review to meet current business and regulatory circumstances. And as professional services contracts proliferate through outsourcing, companies across all industry sectors are seeing that having automated visibility into their contracts saves time, money, and becomes essential to the business.