Hot startup of the month: SA's Contract Understanding

Many businesses, big or small, find it difficult to manage and store their post-signature contracts. Sometimes, such contracts end up in a filing cabinet somewhere and are forgotten.

To remedy the situation, technology startup, Contract Understanding has launched a web-based artificial intelligence (AI) powered software-as-a-service (SaaS) platform that helps businesses securely store, organize and manage post-signature contracts.

"There was an instance where our company was moving buildings and we had an auto-renewal contract with our fiber provider, however, because we were moving to a different location and the fiber company could not offer its services at our new premises," explained Contract Understanding founder and CEO Norman Kretzmer, in an interview with Connecting Africa.

"Our contract was auto-renewed two months before we moved, which was a huge problem," he continued.

"As an entrepreneur, I have experienced a range of frustrations in managing contracts after they're signed. We founded Contract Understanding four years ago, to help other businesses optimize contract management so that they avoid these potentially expensive legal pitfalls," Kretzmer explained.

Inner workings of Contract Understanding

Many organizations go through pitfalls when they need to track and manage dozens of contracts.

These issues include companies losing track of the physical paperwork and subsequently missing deadlines to renew or cancel contracts.

This often leads to companies losing out on benefits such as incentives or discounts due under a contract, or incurring penalties for non-compliance with terms and conditions.

"That is where Contract Understanding's platform comes into play. Our software uses optical character recognition (OCR) to extract and repurpose text from scanned or emailed PDF documents," the CEO said.

"Once a contract is uploaded in a format the system can use, AI algorithms and machine learning techniques extract key information from the text and provide a high-level understanding of the agreement," he continued.

He said the platform gives business owners and managers complete visibility of involved parties, obligations, and deadlines.

"This, in turn, enables businesses to set up automated workflows to better manage their contracts as well as to make better decisions," Kretzmer continued.

"All confidential contracts, including renewals and amendments, are stored in a secure repository with access from anywhere," he said.

Protecting business contracts

Kretzmere said that Contract Understanding hosts contract information securely on the Microsoft Azure cloud, with secure sockets layer (SSL) standard certification for protection.

"Furthermore, to add an additional layer of security, two-factor authentication is used for user logins as if that is not enough, customers can use permission-based access to limit access to confidential contracts to certain designated users," he said.

Contract Understanding's software uses optical character recognition (OCR) to extract and repurpose text from scanned or emailed PDF documents. (Source: Image by Freepik).

"Our AI-driven SaaS solution for contract management is designed to be cost-effective and within reach for mid-sized and large companies," he explained.

Moreover, Kretzmer said Contract Understanding's subscription-based approach enables businesses to effectively manage contracts post-signature, ensuring they never overlook deadlines, obligations, or contract-related benefits.

Currently, the company is targeting businesses of all sizes in South Africa, Egypt, Kenya, Nigeria, Malaysia and Singapore. However, Kretzmer believes that there is room for growth in other markets all over the world.

Competitive advantage

There are other companies that help businesses store their contracts or files. However, what makes Contract Understanding different is its AI-driven SaaS solution and that it allows businesses to sign up based on the number of contracts they want to be managed.

"We believe that currently, no one is doing what we are doing the way we are doing it," the CEO continued.

Moreover, because the startup deals with contracts, it automatically means that it is working within the regulatory framework of any country that the business comes from.

"Non-compliance and contractual risks can result in significant revenue loss and damage to a company's reputation," Kretzmer explained.

Therefore, simplifying contract processes involves integrating compliance and risk management features into a company's contract management system.

"By automating compliance checks, tracking key milestones, and implementing proactive risk mitigation strategies, businesses can safeguard their revenue streams and maintain regulatory adherence," he continued.

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*Top image is of Contract Understanding Founder and CEO Norman Kretzmer. (Source: Contract Understanding).

— Matshepo Sehloho, Associate Editor, Connecting Africa