Contract Lifecycle Management (CLM) Solution Market Size, Share & COVID-19 Impact Analysis, By Component (Software and Services), By Deployment (On-premise and Cloud-based), By Enterprise Type (Large Enterprise and SMEs), By Industry (Healthcare & Life Science, Banking, Financial Services and Insurance (BFSI), Government, Energy and Utilities, IT & Telecom, Legal & Compliance, Retail, Education, and Others), and Regional Forecast, 2023 – 2030

The Contract Lifecycle Management (CLM) solution market size was valued at USD 1.33 billion in 2022 and is projected to grow from USD 1.47 billion in 2023 to USD 3.47 billion by 2030, exhibiting a CAGR of 13.0%. North America dominated the global market with a share of 39.1% in 2022.

Contract Lifecycle Management (CLM) solution primarily serves the needs of the general counsel, that is accountable for ensuring that contracts safeguard and protect the interests of their firms and of the C-level executives who need to turn deals into contracts. The solution helps businesses to create and manage contracts which tend to define their relationships with their partners, consumers, suppliers, and workforces. The increasing complexity of business operations and the rising government investments in legal technologies are expected to drive the market growth.

Contracts are an important part of any business. According to Gartner, 60%-80% of all business-to-business deals are regulated through contracts. There has been a rise in contracts across all types of enterprises. With rising contracts, managing and tracking compliance become risky and challenging. This surged the need across organizations to integrate advanced technologies such as artificial intelligence in contract lifecycle management tools. Automated CLM solutions are expected to become necessary for end-use organizations to expand their presence.

The adoption of e-signature tools further impacts the global Contract Lifecycle Management solution market growth positively. Moreover, adoption of CLM for contract approval post-signature and an increasing number of small and medium-sized software providers in the market are driving the market growth. However, lack of skilled contract professionals in the present situation is expected to hinder the market growth.

COVID-19 IMPACT

COVID-19 Pandemic Surged Investments in the Legal Sector Leading to Positive Growth for the Market

The COVID-19 pandemic forced businesses to change operations and increased remote work across organizations. According to Gartner, the primary impact of the pandemic on their legal function was an increase in remote work across the business (46%), followed by 39% of respondents who agree that the crisis led to legal and regulatory changes. The crisis also encouraged the adoption of legal technologies that enhanced the existing contract lifecycle management systems.

According to the State of Legal Function, the proportion of legal budgets spent on technologies is expected to increase significantly by 2025. The study reflects that the legal tech budget amid the crisis has increased substantially and forecasts it to grow at an accelerated pace.

Furthermore, before the pandemic, companies either used CLM software only for selected parts of their contract processes or did not use it at all. The companies that did not opt for these solutions relied on manual processes. However, after the pandemic, legal leaders who used manual processes found themselves in jeopardy and were forced to adopt automated CLM solutions to move forward with their businesses. Thus, the pandemic has positively impacted the growth rate of the Contract Lifecycle Management solution market.

LATEST TRENDS

Targeting C-level Executives and New Stakeholders to Streamline and Maximize Software Adoption across Businesses

Contract lifecycle management automates and streamlines the entire lifecycle of the contracts at its key stages. Deploying these solutions helps businesses to improve efficiency and reduce costs. The C-level executives are the key personnel with their objectives and areas of responsibility. CEOs, CFOs, and other C-level executives spend 18% of their time managing these contracts. Adopting automated CLM software might reduce their time managing contracts and push them to concentrate on critical decisions. These executives are getting the attention of insights from a well-integrated contract management solution. Earlier, businesses neglected the risks associated with manual contracting processes. The software was just considered a 'nice-to-have' solution. On the flip side, the software has gained popularity amid the crisis and has become a 'must-to-have' solution.

Therefore, CLM solution software vendors are updating their solutions primarily dedicated to using C-level executives. For instance, in June 2022, Thomson added capabilities and features to HighQ, led by contract management proficiencies. The company aims to help legal experts connect and simplify contract workflows and gain full contract visibility.

DRIVING FACTORS

Increasing Government Investments in Legal Technologies to Drive Market Growth

Before the pandemic crisis, businesses considered contract management solutions a 'nice-to-have' solution. Large-scale organizations dealt with more contracts; on the contrary, small-scale businesses dealt with smaller contracts. Legal experts spent lots of time managing and streamlining those contracts. Along with this, the risk associated with manual processes, such as human errors and others, were causing heavy losses to the business. Also, several organizations used CLM software only for some parts of their contract processes. However, the pandemic crisis changed companies' operations and forced legal experts to adopt automated solutions. Considering the growing adoption of CLM solutions, government and venture capital investments increased rapidly.

For instance, the State of Legal Function survey cited that the legal tech budget is expected to grow drastically by 2025. Thus, increasing government and venture capital investments by the players in the Contract Lifecycle Management (CLM) solution market share promises healthy growth.  

RESTRAINING FACTORS

Budgetary Constraints Poses as a Major Obstacle in the Adoption of Legal Technologies

The preliminary investments and implementation cost of the CLM software might restrain the market growth. According to a survey by Legalease, 66% of respondents agree that budgetary constraints are a major obstacle in adopting legal technologies. Furthermore, the companies aiming to migrate to other solutions are restricted by the migration cost of the software.

Thus, the initial cost of predevelopment of CLM solutions, the migration cost, and the lack of awareness of CLM software among developed regions could restrain the market expansion.

SEGMENTATION

By Component Analysis

Need for Legal Software Increased as a Result of the COVID-19 Pandemic

Based on component, the market is subdivided into software and services. The software segment is expected to register considerable growth over the study period.

According to the global COVID-19 customer survey, most respondents (52%) strongly agree that they will work more from home, followed by 62% of respondents increasingly collaborating remotely with their colleagues and third parties. The same study reveals 56% strongly agree with their need for contract management solutions amid the pandemic crisis. This rising need for CLM solution adoption supports the software segment's higher share.

Furthermore, according to Aberdeen, 60% of legal departments lack automated contract management software. This creates an opportunity for the players to target clients who lack the use of the software, and thus promising a healthy growth rate for the market in the coming years. As compared to software, the services segment holds a smaller market share. 

By Deployment Analysis

Cloud-based Solutions to Gain a Competitive Edge Due to Rising Security Concerns

By deployment, the market is segmented into cloud-based and on-premise The cloud-based segment dominates the market due to the increasing shift of workloads over to the cloud. According to the Forbes Report, in 2020, around 83% of the enterprise workloads shifted to the cloud. Also, approximately 94% of enterprises use cloud computing-based services. Such an increase in cloud adoption among enterprises around the region has propelled the market growth.

In addition, the rising adoption of cloud computing services and increasing digital startups across developing countries are expected to propel the overall market size. On the flip side, by deployment model, the on-premises segment is expected to grow at a steady pace.

By Enterprise Type Analysis

SMEs to Exhibit Appreciable Expansion due to Increasing Business Complexity

Based on enterprise type, the market is subdivided into SMEs and large enterprises. The SMEs segment is estimated to generate maximum revenue during the forecast period. Contract Lifecycle Management solutions help small businesses smoothly communicate with contract parties and make contract administration easy. Adopting a CLM solution helps SMEs reduce administrative overhead, reduce the cost of compliance, better risk mitigation, favorable business outcomes, and improve business efficiency.

Large enterprises segment held a higher market size in 2022, owing to increasing business complexity. The need for contract management solutions minimizes the risk associated with manual contract processes and reduces liability and cost.

By Industry Analysis

Legal & Compliance Dominates the Market Due to Large Volumes of Intricate Data across the Sector

On the basis of industry, the market is fragmented into healthcare & life science, BFSI, energy & utilities, government, IT & telecom, retail, legal & compliance, education, and others. The legal & compliance segment holds the largest share among other industry sectors. Large volumes of legal industry data are generated through processes such as internal research memoranda, client lists, legal billing rates information, and other procedures. Contract Lifecycle Management (CLM) solutions in the legal & compliance segment provide experts to effortlessly view, manage, and compare transactions even down to the clause level.

In the healthcare & life science segment, contracts are integral to employment, technology licensing, care transfer, confidentiality, telehealth, and experimental treatments, among others. Traditionally, the industry focused primarily on shared drives and spreadsheets, which are not only highly inefficient but can also put organizations at risk. Due to this reason, healthcare & life science organizations have started adopting Contract Lifecycle Management solutions. The software is used by the healthcare & life science sector to allow organizations to collaborate and negotiate contracts in real-time, approving, simultaneously reviewing, marking up documents, and executing them electronically. Ensuring compliance with HITECH, HIPAA, JCAHO, Stark Medicare billing, Law, and other regulatory and security requirements is no easy task, especially regarding legal agreements. Healthcare-dedicated CLM software helps organizations to manage all their compliance requirements. The healthcare segment is estimated to grow with a higher market share during the forecast period.

Furthermore, government, BFSI, and IT & telecom showcased a steady pace of development and deployment of contract management solutions.

REGIONAL INSIGHTS

The market is analyzed across North America, South America, Europe, the Middle East & Africa, and Asia Pacific.

North America dominated the market by generating maximum revenue in 2022. The primary factor influencing the growth is the presence of key regional players. The key players in the region include Icertis, Coupa, Apttus, Zycus, SAP SE, and many others. These players are making significant research and development investments for incorporating advanced technology features into their solutions to provide better customer experience. These players have experienced consumer growth for their Contract Lifecycle Management solution. For instance, in April 2022, Conga recorded increased momentum and innovation in its Conga Contract Intelligence and Conga software. The solution integrates advanced technologies such as artificial intelligence, ML, and others.

Further, Asia Pacific is expected to grow significantly in the upcoming years. This is due to the adoption of CLM solutions across India, China, and Japan. SMEs across these countries have showcased a higher growth in the deployment of cloud-based solutions to improve contract processes and reduce business complexity. Besides this, government regulations supporting IT infrastructure have boosted the region's market growth. Furthermore, rising digitalization initiatives across the APAC region have propelled the demand for cloud-based CLM software. Organizations are considering automating the contract lifecycle process to increase a competitive edge.

Moreover, Europe, South America, and the Middle East & Africa have shown a higher pace of adopting advanced technologies amid the pandemic crisis. This inclination of the regions promises a healthy future for this market. With the rise of investments in advanced technologies, the regions are likely to integrate these technologies into their existing CLM solutions and enhance the solutions' capabilities. Therefore, this caters to the changing requirements of the customers.

KEY INDUSTRY PLAYERS

Companies Focus on Relevant Mergers & Acquisitions and Partnerships to Gain Competitive Edge

The key players in the global market continuously engage in relevant mergers and acquisitions to gain a competitive edge over the other players. The companies adopt this strategy to combine the best of their capabilities with the acquired company's expertise. The product generated from this combination is well developed and enhanced, effectively catering to the changing requirements of the users.

For instance, in February 2022, JAGGAER acquired DocSkiff, an AI-driven contracts analysis platform, to incorporate DocSkiff's capabilities into the company's advanced platform. With this acquisition, the company expected to help businesses intelligently review, extract, and analyze contract information using advanced technologies such as machine learning and artificial intelligence.

List of Key Companies Profiled:

• DocuSign, Inc. (U.S.)


• SirionLabs (U.S.)


• Icertis (U.S.)


• Agiloft Inc. (U.S.)


• Conga (U.S.)


• CobbleStone Software (U.S.)


• Ironclad, Inc. (U.S.)


• JAGGAER (U.S.)


• GEP (U.S.)


• Oracle (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• October 2022 - Icertis introduced Contract Intelligence Solution, which is majorly dedicated to the banking and financial services industries. The solution meets banking and capital markets needs with a suite of associated documents, attributes, clauses, obligation management, reporting, and templates.


• November 2022 - SirionLabs acquired Zendoc, a contract automation firm based in Seattle. With this acquisition, the company expects to reinforce its leadership position in enhancing the existing solution with AI capabilities. The company is developing a Center of Excellence (CoE) in Nice, France.


• May 2022 – Icertis launched Icertis Matter Management, built on the Icertis Contract Intelligence (ICI) Platform.


• April 2022 – DocuSign launched a newer version of its contract lifecycle management product, DocuSign CLM Essentials. The company aims to target small, growing businesses and departments with this launch.


• January 2021 - Agiloft launched its AI-driven contract management software on Salesforce AppExchange. This launch enables improved data synchronization between companies to accelerate and streamline the commercial processes surrounding contracts.

REPORT COVERAGE

The research report provides a meticulous analysis of the market and primarily focuses on key aspects such as prominent players, the competitive landscape, solution/service types, and integrations with technologies, investments in the legal sector, post-signature contract processes, and leading applications of the product. Besides, the report offers insights into the assessment of the vendors that reflects the comparison of market leaders on the market presence, product strategy, technological expertise, client reviews, types of contracts supported, market trends, drivers, and opportunities and highlights significant industry developments.

In addition to the factors mentioned above, the report incorporates government investments, venture capital investments, the overall sector budget growth, and several other related factors that promise the market's roadmap or development in recent years.

Report Scope& Segmentation