Use Case | Application of the Generative Model for Service Contract Management

Use Cases: Application of the Generative Model for Service Contract Management

General Description:

In service contract management, it is essential to ensure that these agreements include clear terms regarding performance metrics, penalties, deadlines, and renewal conditions. This generative model automates the review of contracts in PDF format, identifying the best agreements and highlighting those that present risks or require adjustments.

How It Works:

1. Uploading Service Contracts:
   • Users upload contracts directly to the system in PDF format.
2. Automated Model Analysis:
   • The model analyzes the contracts looking for key aspects such as:
     • Performance Indicators (SLAs): Are there clear metrics for evaluating service compliance?
     • Penalties: Are there penalties for non-compliance or underperformance?
     • Deadlines and Renewal: Are the start dates, expiration dates, and renewal conditions clearly stated?
     • Financial Terms: Are the prices and payment terms consistent and transparent?
     • Dispute Resolution: Does the contract mention procedures for handling disputes?
3. Evaluation and Classification:
   • The model classifies the contracts into:
     • Solid Contracts: Meet all the established criteria.
     • Contracts with Risks: Contain omissions or ambiguous clauses that need revision.
4. Report Generation:
   • The model generates a report with:
     • Well-Defined Contracts: Ready for execution.
     • Contracts Needing Adjustments: With identified problematic areas.
     • Specific Recommendations: To improve the terms of less favorable contracts.

Example of Use:

Scenario: A manager needs to review 10 service contracts for maintenance and technical support to ensure they meet the company’s standards.

Simplified Process:

1. Uploading:
   • The 10 contracts are uploaded to the system.
2. Automated Evaluation:
   • The model reviews each contract and verifies:
     • Whether it includes specific performance indicators (e.g., response time, resolution time).
     • Whether penalties for non-compliance are mentioned.
     • Whether the renewal conditions are clear and aligned with the company’s needs.
3. Results:
   • Solid Contracts: 7 contracts meet the established criteria.
   • Contracts with Risks: 3 contracts present issues:
     • Contract 4: Does not mention performance indicators (SLAs).
     • Contract 7: Does not include penalties for delays.
     • Contract 9: Renewal conditions are ambiguous and lack clear dates.
4. Generated Report:
   • Solid Contracts: Ready for immediate execution.
   • Contracts with Risks:
     • Contract 4: Add clear performance metrics to evaluate service.
     • Contract 7: Include penalties for non-compliance to protect company interests.
     • Contract 9: Review and clarify the renewal clauses.

Benefits for End Users and Managers:

1. Compliance and Control:
   • Ensures all contracts comply with internal standards and protect the company’s interests.
2. Risk Reduction:
   • Identifies ambiguous or missing clauses that could lead to legal or financial conflicts.
3. Operational Optimization:
   • Saves time by automating contract review and highlighting critical points that require attention.
4. Improved Transparency:
   • Provides a clear and structured view of the contract status.
5. Ease of Use:
   • Results are presented in accessible language with specific and actionable recommendations.

Generated Report Summary:

• Contracts Analyzed: 10
• Solid Contracts: 7
  • Include clear performance metrics, penalties, and adequate renewal conditions.
• Contracts with Risks: 3
  • Contract 4: Lacks performance metrics (SLAs).
  • Contract 7: Missing penalties for delays.
  • Contract 9: Ambiguity in renewal conditions.

Recommendations:

• Add key performance indicators (e.g., response times) in Contract 4.
• Include clear penalties for non-compliance in Contract 7.
• Review and adjust renewal clauses in Contract 9.

Conclusion: The generative model for Service Contract Management allows companies to quickly assess the quality of their agreements, identify the strongest ones, and highlight areas for improvement in risky contracts. With clear reports and practical recommendations, managers can make informed decisions, protect the company’s interests, and ensure an efficient and transparent relationship with service providers.