The global contract lifecycle management market size is likely to total USD 3,771.7 million by 2033, up from USD 1,189.4 million in 2023. From 2023 to 2033, the market is estimated to register a CAGR of 12.2%.
Contract lifecycle management (CLM) refers to all the activities involved in managing a contract from beginning to end. Customer relationship management, configuration, pricing, quote, billing, and revenue recognition are all included in this. It helps to ensure compliance with regulations, and audit contracts, and reduce risks.
By using efficient management solutions, organizations can save time and money while improving their business processes. This includes managing obligations and compliance as well as keeping records organized. Overall, contract lifecycle management can help businesses become efficient and effective.
Contracts are a crucial component of every organization. About 80% of all business-to-business transactions are governed by contracts. Thus, it has become necessary for businesses to include pioneering technology like artificial intelligence in their contract lifecycle management software.
The expansion of end-use organizations’ presence is anticipated to necessitate the adoption of automated CLM systems. The development of cloud technology is another important factor that has greatly accelerated this market growth.
The contract lifecycle management market makes up about 25% of the overall contract management market size. It is a tool that helps keep track of every part of a contract. Its purpose is to ensure it is meeting all the requirements and performing well. Contract lifecycle management solutions guide contracts through each stage of their lifecycle.
The global market is likely to grow significantly given the increased investment in the industry. A dynamic transactional solution that can seamlessly interface with other important corporate transactional components is replacing static document management.
Many businesses are adopting cloud-based contract management software. They are also utilizing enterprise contract lifecycle management software, contract automation software, and cloud-based contract repository software.
The legal department in medium and large-sized firms has enormous pressure to keep track of the company's contracts. The practice of managing contracts is critical for operations since they are essential to generating revenue—the very "lifeblood" of modern businesses. In addition to assisting in the timely execution of contracts, CLM also makes sure that commitments are kept.
Demand for contract lifecycle management surging since it has become a renowned corporate system of record owing to significant improvements in its capabilities. The rise in CLM tool adoption has been driven by:
The application of analytics in contract lifecycle management is projected to accelerate market expansion during the forecast period.
The implementation of e-signature tools has a favorable compounding effect on the expansion of the global contract lifecycle management solution market. Several small and medium-sized software suppliers are also fueling the industry growth by using CLM for contract approval after signature.
| Attributes | Details |
|---|---|
| Contract Lifecycle Management Market Value (2022) | USD 1,075.4 million |
| Contract Lifecycle Management Market Value (2023) | USD 1,189.4 million |
| Contract Lifecycle Management Market Expected Value (2033) | USD 3,771.7 million |
| Contract Lifecycle Management Market Projected CAGR (2023 to 2033) | 12.2% |
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The contract lifecycle management market revenue is projected to grow by USD 2,582.3 million between 2023 and 2033, surpassing the growth of USD 344.9 million observed between 2018 and 2022. The CLM market size is projected to upsurge at a CAGR of 12.2% between 2023 and 2033 compared to a CAGR of 10.1% recorded from 2018 to 2022.
Implementing CLM methods started to become popular in 2018 and this trend is continuing to expand in this post-pandemic era. After the business shutdowns brought on by the previous pandemic, there was a storm of "force majeure" that increased the likelihood of contract failure. In addition, force majeure conditions were extensively examined, modified, and restructured across organizations and sectors of all sizes.
The pandemic crisis altered business processes and compelled legal professionals to use automated solutions.
The CLM solution market is growing steadily because there is a rising demand for cloud-based solutions that can store data securely and provide unlimited access from anywhere.
Contract lifecycle management providers also offer various business functions to simplify processes and meet customer demands. This includes legal contract management, contract intelligence, and software. Thus, companies are increasingly using contract management tools that are based on the cloud.
Smart businesses are increasingly adopting advanced technologies like machine learning, artificial intelligence, bots, and analytics to enhance various aspects of their operations. These technologies are being used to improve the customer experience, supply chain management, workforce management, sales, marketing, and more.
CobbleStone Software introduced VISDOM artificial intelligence (AI) and machine learning (ML) for contract insight enterprise software in December 2018. This technology helps contract lifecycle management software providers to identify opportunities and mitigate risk efficiently, without having to manually evaluate contracts. The software automates data entry, assesses contract risk, performs statistical data analysis, and provides real-time data recommendations.
Government and venture capital investments expanded quickly in light of the increasing adoption of CLM solutions. The State of Legal Function report, for example, claimed that by 2025, a significant increase in the budget for legal technology is anticipated. The participants in the contract lifecycle management system market share are investing notably in venture capital and government. Thus, the market is expected to witness strong growth.
The significant steps of the contract lifecycle are automated and streamlined through contract lifecycle management. By using these solutions, organizations could increase productivity and cut expenses.
A well-integrated contract management system is drawing the attention of executives and provides them with information. Organizations used to ignore the dangers of manual contracting procedures.
The software was perceived as a nice-to-have addition. The program has become a "must-have" popular remedy lately given the economic downturn. As a result, CLM software providers are improving their products which are largely targeted at C-level executives. For instance,
The business intends to assist legal professionals in connecting, streamlining, and gaining complete contract visibility.
CLM vendors are providing AI-powered insights for their contract management solutions. This identifies risks, predicts trends, gains insights into client behaviors, and evaluates potential business scenarios. For example,
AI-driven contract management uses natural language processing and neural network technology. It aims to reduce the time spent on contracting and improve contract accuracy and analysis. It also automates key aspects of the contract review process, reducing cycle time and eliminating errors.
Principal Consultant
| Region | North America |
|---|---|
| 2022 Value Share in Global Market | 27.60% |
| Top Country | The United States |
| 2022 Value Share in Global Market | 18.10% |
In 2022, North America contract lifecycle management market took the lead by bringing the bulk of revenue. The existence of important regional players is the main element determining growth. Key regional contract lifecycle management companies including Icertis, Coupa, Apttus, Zycus, and SAP SE, are investing heavily in research and development. They intend to include cutting-edge technological features in their products and improve customer experience.
CLM software is adopted across industries including healthcare, IT & Telecom, Banking Financial Services and Insurance (BFSI), government, and others. Among these, the BFSI sector is the leading adopter of CLM software in the United States given the complex and lengthy contract processes involved in the sector.
Companies have experienced an increase in customers for their contract lifecycle management service. For instance, Apttus's Conga Contract Intelligence and Conga software both experienced increasing dynamism and invention in April 2022. The solution incorporates cutting-edge technology like machine learning and artificial intelligence.
FMI projects that the United States contract lifecycle management market could dominate about 57% of the market share in North America until 2033. Regulations like the Health Insurance Portability & Accountability Act (HIPAA) have increased the usage of contract lifecycle management solutions in North America. Thus, the demand for contract lifecycle management is expected to rise across the country during the forecast period.
| Region | Europe |
|---|---|
| 2022 Value Share in Global Market | 23.30% |
| Top Country | Germany |
| 2022 Value Share in Global Market | 8.60% |
Europe contract lifecycle management market is dominated by the United Kingdom, Germany, Spain, and France. Nevertheless, amid the pandemic crisis, Europe has demonstrated a fast rate of advanced technology adoption. This tendency of the region shows a promising future for this market.
As investments in cutting-edge technologies increase, the region is anticipated to incorporate new technologies into its current CLM systems and strengthen their functionalities.
In Germany’s contract lifecycle management market, rapid developments are taking place in contract management technologies and methodologies. These developments include hybrid cloud solutions that make it easy and cost-effective to access new markets. By using these innovations, contracts can be managed in real-time, providing better visibility, choice, and control over the cloud and other infrastructure. This flexibility offers established and growing vendors of contract lifecycle management services the opportunity to take advantage of booming opportunities in countries like Germany.
Given the flexibility, scalability, and affordability of cloud-based CLM solutions, businesses are gravitating toward them with increasing frequency. Over the forecast period, this trend is anticipated to persist as several businesses seek to automate their contract administration procedures. The application of AI and ML in CLM is also gaining traction in Germany.
Several companies are using these technologies to automate contract review and analysis, identify contract risks, and improve contract drafting and negotiation. For instance,
The purpose of this collaboration is to construct a blockchain experiment that could really track the lead production cycle for its batteries from the initial source to the manufacturing. Blockchain technology from Icertis is going to help Volkswagen in recording supply chain agreements and screening outside parties.
| Country | Value CAGR (2023 to 2033) |
|---|---|
| India | 15.8% |
Asia Pacific contract lifecycle management market is anticipated to have tremendous growth during the forecast period. This is a result of CLM solutions being used in developing countries like India and China. Small and medium-sized enterprises (SMEs) in these nations have demonstrated great growth in the implementation of cloud-based solutions. The purpose of these enterprises is to enhance contracting procedures and lessen company complexity.
TIndia contract lifecycle management market is anticipated to experience substantial growth during the forecast period. The primary reason behind this is the increasing demand for automatic contract modifications.
A shift toward cloud services and the integration of advanced technologies also open up growth opportunities for contract lifecycle management companies in India.
In India, there is widespread adoption of cloud-based contract lifecycle management software. The reason behind this is it allows businesses to benefit from the as-a-service business model.
Cloud-based solutions offer several advantages like unlimited data storage, strong security, and access from anywhere. Government policies that assist IT infrastructure have also accelerated market expansion in the country. Also, the expanding digitization activities have boosted the demand for cloud-based CLM software.
Regarding data privacy, cybersecurity, and intellectual property rights, the government of India has put in place numerous policies and regulations. The Information Technology Regulations, 2021 were released by the Ministry of Electronics and Information Technology on February 25, 2021. This intends to give regular users of digital platforms the option to seek redress for grievances and impose further due diligence on businesses. Therefore, organizations in India are adopting CLM solutions to ensure compliance with these regulations.
A strategic partnership between KPMG in India and SirionLabs has been established in June 2022 to hasten the transition of the India contract lifecycle management software market. With SirionLabs' industry-leading AI-powered CLM solutions and KPMG India's extensive experience in contract management services, the combination plans to create business value for both clients and companies in India.
| Segment | Business Function |
|---|---|
| Top Sub-segment | Finance |
| 2022 Value Share in Global Market | 17.20% |
| Segment | Industry |
|---|---|
| Top Sub-segment | Government & Public Sector |
| 2022 Value Share in Global Market | 15.40% |
Contract lifecycle management is divided into sub-segments based on business functions. The finance sub-segment dominates the global market and is anticipated to retain its dominance. CLM is accountable for handling all contract-related finances, including budgeting, invoicing, payments, and revenue recognition.
CLM solutions offer many benefits for finance, such as avoiding penalties from missed financial milestones and reducing high-risk financial terms in contracts.
The finance function is crucial in CLM, ensuring contracts are financially viable, compliant, and aligned with company goals. The increased operational efficiencies and reduced risks are driving the adoption of CLM for financial operations. The ability to help financial institutions stay competitive, customer-centric, and compliant is likely to force market expansion.
The market is categorized into several industry segments, with the government and public sector leading the way. There is a rise in demand for contract management systems in the government and public sector given the global trend toward digitalization.
Contracts involving construction, services, and procurement are among the many types of agreements that the government and public sector deal with. It is necessary to have a strong and scalable CLM system to manage such a huge quantity of contracts.
CLM is a fully integrated system that streamlines procurement and payment processes. It helps the government and public sectors achieve efficiency by eliminating disconnected operations and executing tasks in the least steps possible.
CLM also offers various features, such as standardized contract processes, streamlining acquisition processes, enabling intelligence-driven decision-making, and ensuring accountability and transparency. These features are likely to force market growth during the forecast period.
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Contract lifecycle management providers aim to grow their business by acquiring companies that can complement their technology, expand their market reach, and increase their domain expertise. This helps them stand out from their competitors. They also plan to launch new and improved products to maintain their position in the market and provide a better customer experience.
Recent Developments in the Contract Lifecycle Management Industry
The primary consumer for CLM is the manufacturing industry.
The key players in the CLM market are IBM, Oracle, and SAP.
The market is estimated to secure a valuation of USD 1,189.4 million in 2023.
The market is estimated to reach USD 3,771.7 million by 2033.
The manufacturing sector holds high revenue potential in the CLM market.
1. Executive Summary 2. Market Overview 3. Market Background 4. Global Market Analysis 2018 to 2022 and Forecast, 2023 to 2033 5. Global Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Solution 5.1. Software 5.2. Services 5.2.1. Professional Services 5.2.2. Managed Services 6. Global Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Industry 6.1. BFSI 6.2. IT & Telecom 6.3. Government & Public Sector 6.4. Energy & Utilities 6.5. Manufacturing 6.6. Healthcare & Pharma 6.7. Others 7. Global Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Region 7.1. North America 7.2. Latin America 7.3. Europe 7.4. South Asia 7.5. East Asia 7.6. Oceania 7.7. MEA 8. North America Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country 9. Latin America Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country 10. Europe Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country 11. South Asia Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country 12. East Asia Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country 13. Oceania Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country 14. MEA Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country 15. Key Countries Market Analysis 16. Market Structure Analysis 17. Competition Analysis 17.1. Newgen Software Technologies Limited 17.2. SAP SE 17.3. Infosys Limited 17.4. Information Services Group, Inc. 17.5. Model N, Inc. 17.6. SecureDocs, Inc. 17.7. Corcentric 17.8. Ivalua Inc. 17.9. Agiloft Inc. 17.10. Apttus 17.11. CobbleStone Software 17.12. Conga 17.13. Contract Logix, LLC 18. Assumptions & Acronyms Used 19. Research Methodology
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Contract Lifecycle Management Market
