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.
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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.
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.
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.
Based on Contract Management’s offering, the global market is divided into licensing, subscription, and services. The licensing and subscription segment currently accounts for the largest market share as it helps protect the rights of the parties involved clearly and concisely.
Based on the enterprise size, the global market has been segmented into large enterprises and small and medium enterprises.
Based on the industry, the global contract management has been segmented into automotive, electrical and electronics, pharmaceutical, retail and e-commerce, manufacturing, and BFSI.
The global contract management software market has been segmented into North America, Europe, Asia Pacific, and LAMEA.
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North America dominates the global contract management software market during the forecast period. The existence of key market participants within the country, such as Coupa, Information Services Group, Model N, and Corcentric, is a significant factor contributing to the expansion of the market in the United States. The most important players in this country's contract management software market are investing considerable money into research and development. The rising number of partnerships, mergers, and acquisitions in the healthcare and life sciences will likely stimulate market expansion. It is anticipated that data security and privacy regulations such as the Health Insurance Portability and Accountability Act (HIPAA) will increase demand for contract lifecycle management solutions.
Healthcare organizations implement contract lifecycle management solutions to manage contracts, reduce manual tasks, and save time. As a result, the demand for contract lifecycle management would increase throughout the country. It is likely that shortly, the scope of penetration of contract lifecycle management will increase in these regions due to rising software spending and evolving business operation methods in the countries that make up the regions as mentioned above.
The global contract management software market’s major key players are