Market Overview
The global contract management software market size was valued at USD 965.25 billion in 2021. It is expected to reach USD 2,940.36 billion by 2030, growing at a CAGR of 13.2% during the forecast period (2022–2030).
Contract lifecycle management is a practice that businesses have adopted to manage the entirety of the contracting process. The contract lifecycle management system handles each contract stage, which makes for the efficient administration of inter-entity contracts and agreements.
The initial request for a contract, and its renewal or termination, are all handled by the contract management software. The use of contract lifecycle management is growing because it protects users from various undesirable outcomes, including missed deadlines, penalties, and additional payments. The timely price of external vendors is another responsibility handled by contract lifecycle management, which also assists contractors with increasing their profit margins. The growing popularity of contract lifecycle management can be attributed to the fact that it simplifies the steps involved in forming partnerships and collaborating and acquiring new assets.
Contract management software automates and streamlines contract processes during critical phases, such as initiation, authoring, process and workflow, negotiation and approval, execution, and ongoing management. It is integrated with electronic signature (e-signature) tools that facilitate the creation of a user-friendly and secure central repository for contracts. Additionally, it offers reporting, contract analytics, email reminders, and other alerts. It is currently widely used to reduce infrastructure investments related to contract management and boost overall profitability in various end-use industries, including automotive, electronics, healthcare, and e-commerce.
Market Dynamics
Contract Management Software Market Driving Factors
Time Integrity and Flaws Detection to Drive Market
For research, lawyers can use contract management software to locate similar contracts in the library, which can be viewed in Microsoft Word, PowerPoint, and Excel. This cuts down on the time needed for the review and enables companies to find weaknesses in their system. This software also offers efficiency and transparency in reporting mechanisms and management controls, allowing organizations to ensure compliance with acts implemented by governing authorities. Additionally, the emergence of cloud-based contract management software is driving demand for this solution across various industries.
This is since cloud-based contract management software provides an intuitive user interface, enables dynamic workflow approvals, provides seamless integration with popular contract management systems, and significantly reduces overall costs. In addition to this, it assists businesses in reducing the amount of infrastructure-related investments necessary for contract management. The requirement for a collaborative approach in the direction of projects and joint ventures has gained immense significance due to rapid globalization. Businesses are starting large-scale collaborations to deal with the ongoing changes in their operations, which is anticipated to produce a positive outlook for the contract management software market.
Contract management software assists in efficiently managing the complete process of a contract signed between two or more organizations. This software can manage the following processes, i.e., Drafting of the contract, negotiations of the contract, approval of the contract, administration of the contract, a repository, compliance optimization, retrieval of the contract, amendments, and disposition of the contract. It assists the organization in developing partnerships with other businesses to broaden the scope of their existing customer base. Consequently, there has been an increase in demand for contract management software in various industries worldwide, including the public sector, healthcare, manufacturing, and financial services.
Contract Management Software Market Opportunity
Adoption of Artificial Intelligence (AI) and machine learning (MI) to Boost Market Opportunities
The growing complexity of business operations is one of the primary factors driving the adoption of contract management software. This software reduces risks, designs a more effective compliance management framework, and improves the customer experience. Additionally, small and medium-sized businesses (SMEs) increasingly use cloud-based contract lifecycle management software because it supports self-service contract creation, manages templates and pre-approved alternative clauses, and provides real-time collaboration for a quicker contract turnaround. Additionally, it protects emails and attachments, automates the contract approval process, lowers the risk of compliance violations, and includes version control and comparison tools that make tracking and managing contract negotiations easier.
Incorporating features like artificial intelligence (AI), the internet of things (IoT), machine learning (ML), and voice activation offers a high level of accuracy and efficiency. Key market players operating in the industry can benefit as large-scale collaborations are becoming increasingly important to many businesses to keep up with the constant industry changes.
Segmental Analysis
The global contract management software market is segmented based on deployment model, contract management offering, enterprise size, and industry.
Based on the deployment model, the global market has been segmented into cloud-based and on-premises.
The cloud-based deployment model has been gaining huge traction in the contract management software market lately due to the many advantages it gives over traditional on-premises solutions. Flexibility, scalability, and cost-effectiveness are among the virtues that make it especially suitable for small and medium-scale enterprises that do not have the resources to put into large IT infrastructures. Cloud-based contract management solutions are designed for remote access and allow teams to operate their contracts from anywhere; a feature so important in today's hybrid and remote work settings. Besides, such solutions come with automated updates and enhanced security, mostly being taken care of by the service providers, which significantly reduces most of the burden off the backs of an internal IT department.
On-Premise refers to installing and running software on a company's own servers and infrastructure. Most organizations go in for on-premise solutions so that they may have better control over their data, enhance security measures, and allow customization as per their requirements. The on-premise model is mostly preferred by industries with stringent regulatory requirements, such as financial institutions, healthcare service providers, and law firms, for compliance and protection of the privacy of the data stored. While the trend has been toward the cloud, the on-premises segment is pretty strong due to concerns related to the sovereignty of data, integration with existing systems, and cost management in the long term. It is expected that on-premises deployment would be an enormous share for the Contract Management Software market, given that businesses are increasingly considering data security and control.
Based on Contract Management’s offering, the global market is divided into licensing, subscription, and services.
Licensing and Subscription form a key segment of the Contract Management Software market. The license model in this segment comprises software solutions that are delivered based on perpetual license or subscription-based models. Licensing typically requires a onetime charge for use in perpetuity but often is also supplemented by optional annual maintenance and support contracts. Subscription models entail periodic fees, normally monthly or yearly, in return for access to the software and their successive updates. These models are increasingly preferred by all because they allow for flexibility, scalability, and reduced upfront costs—this goes a long way in helping organizations manage their budgets more effectively. With a view to achieving better agility and cost efficiency, the subscription model is increasingly being put into practice by SMEs and start-ups. In addition, subscription models usually have cloud-based delivery options, which greatly enhance the accessibility and collaboration capabilities of applications in today's most common settings of remote and hybrid work.
Services might typically include advisory services in evaluating the contract management needs of an organization and selecting the proper software, implementation services to set up the software and configure it to meet special requirements, and integration of the software with existing systems. There are also customization services, which tailor the software to a given unique business process or workflow. Besides this, it offers training services for the proper use of software and support services that help users receive technical assistance in the enablement of ongoing support and troubleshooting. This sector is very important because it helps organizations get the most out of a CMS investment improved contract management efficiency, compliance, and general operational effectiveness.
Based on the enterprise size, the global market has been segmented into large enterprises and small and medium enterprises.
Large enterprises are in high demand of robust, scalable, and flexible solutions in contract management. Large enterprises have sophisticated requirements for contract management because they engage in many contracts, the nature of these contracts can be diverse, and the nature of the regulatory and compliance requirements imposed upon them by various authorities is often complex. These organizations want end-to-end software with feature sets that include automated workflow management, AI-driven analytics, integration with other enterprise systems (such as ERP and CRM), and tight security measures. The principal drivers for adoption in this section are basically based on the need to bring improvement in areas like efficiency, risk management, compliance, and reaping benefits from the embedding of data insights in making strategic decisions.
SMEs had challenging issues because of their limited resources and manual means of contract management that caused inefficiency and compliance risks. With the growing availability of cloud-based CMS solutions, SMEs can now access more affordable and scaled tools than what was usually accessed by larger organizations. These solutions provide SMEs with automated creation of contracts, centralizing repositories, and compliance management to help them be more operationally efficient, reduce errors, and be more compliant with regulations. Not to mention that subscription-based pricing models—so common within the CMS market place these kinds of tools within the financial reach of SMEs, who will only pay for those features used. Thus, the adoption of CMS by SMEs is expected to increase rapidly due to the need for better contract management and digital transformation.
Based on the industry, the global contract management has been segmented into Legal and Compliance, Banking, Financial Services, and Insurance(BFSI), Government, IT and Telecom, Healthcare and Life Sciences, Retail, Energy and Utilities, Education
The Banking, Financial Services, and Insurance (BFSI) sector is a significant market segment for Contract Management Software (CMS). In this industry, the adoption of CMS is driven by the need for enhanced regulatory compliance, risk management, and operational efficiency. In general, financial institutions maintain many complex contracts that involve rigorous monitoring and detailed record-keeping. Such contract management solutions automate the process of each stage in the cycle of the contract and ensure proper tracking of each agreement that the company enters. Second, they support compliance with financial standards and regulations, thereby minimizing the probability of non-compliance and related financial penalties. Further, CMS empowers better collaboration across stakeholders and improved transparency that enables faster approval cycles in an increasingly fast-moving BFSI environment.
Government agencies at all levels—federal, state, and local—generally deal with high volumes of contracts, including procurement, grants, and compliance agreements. These contracts usually have stringent standards of regulations and compliance, and their management without specific software solutions can become cumbersome. Contract management software in this industry helps smooth workflows, ensures all activities are carried out in adherence to the legal and regulatory requirements, and facilitates transparency in contract execution and monitoring. The software solutions meet all of the complicated requirements asked for by government entities with the features they offer for automated creation of contracts, risk management, and detailed reporting.
The IT and Telecom sector establishes a huge market share in the CMS, as it is one of the sectors whose contract requirements are sophisticated and dynamic. Companies belonging to this industry generally deal with large volumes of contracts pertaining to software licenses, hardware procurement, service agreements, and compliance requirements. These contracts must be managed with extreme care, from compliance with the law to perfect procurement and risk reduction in case of breaches or dispute. Contract management software specifically designed for the IT and Telecom sector helps in these processes and automates the management. Besides, it provides features like contract lifecycle management, risk assessment, and compliance tracking.
The Healthcare institutions require sophisticated CMS solutions in order to manage multifaceted contracts in areas such as clinical trials, research agreements, vendor contracts, and regulatory compliance. These software solutions automate the entire process of contract creation, management, and analysis, making sure that all sensitive business data is treated in compliance with strict regulations, such as HIPAA (Health Insurance Portability and Accountability Act) and FDA (Food and Drug Administration) guidelines. Advanced capabilities, like automated tracking of contracts, risk assessment, and document storage, further strengthen these healthcare and life sciences firms in terms of operational efficiency, lightening their administrative burden, and responding to such dynamic changes in the regulatory environment and business needs.
The Retail sector forms a vital part of the Contract Management Software market in view of its huge volume of complicated, high-intensity contracts. Starting from major chain stores to small individual boutiques, retail companies have to run robust solutions to help manage various kinds of contracts, including vendor and supplier contracts and lease agreements. These solutions help in smoothing the creation of these contracts, following compliance with their requirements by law and regulations, and managing their renewal and performance. In addition to this, most of the retail contract management software is integrated with procurement systems and financial management tools for visibility of contractual obligations and undertaking decisions for the same. The increased focus on efficiency and transparency of operations in retail drives demand for sophisticated, specially developed contract management systems.
Educational institutions, including schools, colleges, and universities, require robust contract management systems to handle a diverse range of agreements, such as vendor contracts, student agreements, faculty contracts, and licensing deals. These systems help streamline the creation, execution, and monitoring of contracts, ensuring compliance with regulatory standards and institutional policies. The software often features tools for document management, automated approval workflows, and compliance tracking, which are crucial for managing complex and often high-volume contracts in educational environments. As educational institutions continue to emphasize operational efficiency and transparency, the demand for sophisticated contract management solutions in this sector is expected to grow.
Based on the components, the global market has been segmented into Software and services.
The software segment refers to various software solutions for management in streamlining and enhancing the lifecycle management of contracts. Typically, this segment involves software tools and platforms that provide services in the following areas: contract creation and negotiation; execution; monitoring of compliance; and management of renewal-related activities. These software solutions typically sport an automated contract workflow with analytics, and most offer integrations with common enterprise systems of record. Companies in the field are looking to achieve better effectiveness, lower errors, and have their duties in their contracts followed by and realized in the most optimal way possible by utilizing the best up-to-date technology.
Consulting services include giving of expert thoughts and techniques that empower associations to actualize and optimize contract management arrangements as a matter of best practice. This may incorporate requirement appraisal, framework outline, and recommendation of best practice as per the business needs. These support and maintenance services provide for the continuous functionality and performance of the software through technical glitches, updates, and upgrades. This is an important segment because it enhances realization of value from the software to enable organizations to efficiently manage their contracts and maintain compliance with the law and the provisions set by regulators. With a business world increasingly recognizing the value of robust contract management, demand continues to grow for the services driving innovation and improvement in the market.
Impact of covid-19
Covid-19 had some profound adverse impacts on the global advanced ceramics market.
COVID-19 spread across the world from China, making the whole world stand still and to a complete lockdown situation. Covid-19 is an infectious disease that was caused by a newly discovered coronavirus. During the time, the fatality rate among the population above 40 was also high globally. The disease causes severe illness for people suffering from medical conditions like diabetes, cardiovascular disease, chronic respiratory disease, etc.
Considering the situation during that time, it was declared a pandemic which led to numerous countries, including the major economies like China, the United States, India, and others, implementing lockdowns which adversely affected the global economy.
In the first two quarters of 2020, the economic and industrial operations temporarily halted. Almost every manufacturing unit where advanced ceramics is used, such as electrical and electronics, transportation, industrial, chemical, and other End-user Industries (except medical), reduced their manufacturing capacities due to the lack of workers. The lockdown implemented put a halt to global supply chains. This resulted in repercussions in terms of both production and demand for advanced ceramics.
Market Recovery Timeline and Challenges
With time the lockdowns were uplifted, and relaxation was made to the public. Gradually, the economy picked up the pace and started its operations, bringing the demand in the global advanced ceramics market and increasing among various industries. As the situation improved during the initial months of 2021, the economies also strengthened their fiscal policies and initiated their development process; the end-user industries began their activities, bringing the overall ceramics market back on track.
