Why Is The Contract Management Solutions Market Expected To Grow In 2024?

The legal landscape has undergone numerous changes over the years. With end-to-end contract management tools available, businesses are beginning to see the advantages of automated procedures. It allows companies to boost productivity without sacrificing effectiveness and legitimacy. That is why the market for contract management solutions will maintain its rapid growth in the following decade with the ongoing demand from various industries.   

For most businesses, managing the contract lifecycle—from creation to negotiation, execution, and post-contract management—is a daunting task. Contract management software with a centralized platform and automated workflows has become sought-after to boost procedural efficiency, reduce administrative costs, and propel contract performance. Here are a few factors contributing to the contract management solution market's continued expansion in 2024.   

Increasing contract scrutiny across industries 

Amidst escalating contractual risks and ever-changing regulations, organizations require a sophisticated system to scale contracts without compromising compliance or security. Keeping up with regulatory requirements is more vital than ever for organizations. Although they vary by industry, an average enterprise's fundamental contract compliance criteria include  

• Ensuring the contract language adheres to organizational, industrial, and legal standards.  
  
• Keep track of contractual commitments and deadlines to guarantee that all parties abide by the terms and conditions. 
• Additionally, businesses must ascertain that the contract successfully navigates each contract management stage without experiencing holdups or obstacles.  

Contract compliance processes, however, call for additional tools and workflows due to the sheer volume and complexity of business agreements. Naturally, enterprises will look to contract management software to streamline contract creation and management while lowering the risk of non-compliance.  

• Templates & clauses libraries

Contract management systems allow organizations to curate pre-approved templates and clause libraries for quick contract generation. Thus, the legal team can standardize the contract language across the organization and establish compliance for even self-serve contracts.  

• Approval workflows

Customizable workflows for contract review and approval processes enable enterprises to assign relevant stakeholders and legal counsel to oversee the quality of the contractual agreements. The thorough compliance checks ensure that only relevant contract makes it to the execution phase of the contract lifecycle.  

• Contractual milestones

Organizations must keep track of contractual events and milestones to comply with review, renewal, and expiration dates. Users can trigger automated reminders for critical contract dates using contract management software.  

• Obligation management

Another crucial component of contract compliance is ensuring all the parties stay true to the terms and stipulations outlined in the business agreement. Organizations can set up notifications for significant obligations using contract management software to guarantee full performance and compliance.

Growing demand for contract business intelligence 

Organizations no longer consider executed contracts and data as purposeless and static. They have come to understand that business contracts are mine for contract intelligence. With the stakes too high and stiff competition, enterprises need to utilize every tool in their arsenal to streamline processes and boost results. They can employ advanced data analytics and reporting to uncover actionable insights from contractual agreements. Due to this growing need for business intelligence, companies prefer CLM (Contract Lifecycle Management) solutions with competent contract reporting and analysis features rather than manual contracting.  

To monitor significant contract management events, milestones, and deadlines, contract management software provides configurable dashboards and reports. Additionally, enterprises can use data analysis to get insights into contract performance, value, and compliance. They can generate reports on upcoming deadlines, vendor risks, contract lifecycle duration, real-time status, and more. As a result, contract lifecycle management systems make it incredibly simple for businesses to manage contracts without overlooking any vital details.   

• Contract management dashboards 

The CMS (Contract Management Software) systems offer configurable platforms to create vendor, customer, contracts, and project dashboards to reduce information overload in the contract management lifecycle. To gather pertinent information, they do not need to go through each agreement manually; they can simply find it on the dashboard.  

• Contract report & analysis 

The contract management software enables businesses to streamline contract reporting and analysis by supplying real-time information on contract finance, processes, performance, risk, and compliance. They can use custom reports to keep track of the duties, deadlines, parties, and other information throughout the contract's lifecycle. They can also integrate with other business applications to accumulate information relevant to their operations. 

Rising interest in cloud-based solutions 

The growing demand for cloud-based contract management systems among scaling businesses is primarily due to their accessibility, affordability, and scalability. The use of cloud-based contract management benefits any organization that needs to be constantly connected and gather reliable data collection to advance the contract lifecycle. The rise of remote working during COVID-19 encouraged businesses to turn to a centralized platform to collaborate on contracts.  

Cloud-based CLM solutions automate every step of the contract lifecycle, from the request for a new contract to data collection, review, approval, monitoring and analysis, and termination or renewal. It enhances business operations by making real-time data available anywhere, anytime. It improves visibility, compliance, and efficiency in contracting processes. Contract management software with cloud technology has the flexibility to adapt the platform to suit your business needs.  

Apart from easy accessibility, cloud-based contract management also guarantees complete security for sensitive information. For instance, the Dock 365 CMS solution develops its platform on a pre-existing Microsoft 365 interface. Therefore, organizations do not have to depend upon third-party servers to store their agreements. Contracts and their relevant documents can be archived and accessed securely. It enables the legal team to improve version control, data security, and accuracy across the organization.  

Need for collaborative contract management 

A legal agreement's authorizers, scope, and objectives keep changing throughout the contract's lifecycle. With manual contracting processes, there is always the scope for miscommunication, human error, or inconsistencies. Moreover, more than one team is involved in the contract lifecycle, and they cannot afford to exist as information silos. Organizations with expanding needs, therefore, favor departmental collaboration-supporting contract management software.  

Enterprises can minimize misunderstandings and increase operational efficiency by implementing secure and user-friendly systems for contract creation, negotiation, review, approval, execution, and management. Additionally, it provides complete visibility across the entire contract management lifecycle to the pertinent stakeholders. Therefore, collaborative contract management is essential for businesses in 2024 to ensure everyone is always on the same page regarding contractual agreements.  

• Centralized storage 

A single source of truth is vital for multiple parties and teams collaborating for the contract lifecycle. Fortunately, contract management software provides a centralized location to initiate processes and store all contract-related information and documents. Cloud-based storage for contract repositories, pre-approved templates, and clause libraries to make it accessible across the organization. 

• Digital redlining 

The contract lifecycle includes negotiations, where cooperation and communication are essential to achieving the desired outcomes. Parties go and forth to work out the terms and conditions of the business agreement leading to multiple contract versions. Contract management software supports online redlining to track changes made to a contract, accept, or reject alterations, and maintain version control.  

• Interdepartmental transparency

Contract management software offers intuitive tools to improve transparency in the contract lifecycle. The system provides real-time alerts for document status to keep stakeholders apprised about contract changes. Moreover, the CMS platform comes with OCR (Optical Character Recognition) capabilities to enhance searchability. Parties can easily search and retrieve any contract-related information in no time.  

Process automation is mandatory for businesses 

With growing needs and competition, enterprises can no longer depend solely on manual processes to manage their contracts. For businesses, it is all about increasing profit and reducing costs, leading them to opt for automated solutions. Contract lifecycle management solutions enable organizations to automate many time-consuming manual tasks associated with contract management.  

Every stage of the contract lifecycle — creation, negotiation, approval, execution, and management — requires prompt action and accuracy. Companies can scale contracts and maintain efficiency and legal viability using automated processes. Moreover, there is no scope for human error, miscommunication, or unnecessary delays. Centralized platforms mean the legal team can oversee the contractual agreement throughout the lifecycle to establish compliance.   

• Custom workflows 

The contract management platform enables businesses to initiate workflows to automate each stage of the contract lifecycle. It ensures that the contractual agreements progress through generation, negotiation, approval, and execution processes without any roadblocks. Thanks to automated workflows, organizations can guarantee the business agreement gets to the right person at the right time.  

• Timely reminders 

Contract management software with automated notifications means companies can stay on top of every significant contractual event and deadline with little effort. They can set up reminders for contract milestones, obligations, document status, reviews, and expiry and renewal dates to avoid legal and financial repercussions.  

AI contract management is the future 

Advancements in artificial intelligence over the decades are sharpening contract lifecycle management systems. Contract management enables businesses to reduce risks and spot opportunities apart from advancing business agreements through the lifecycle. It is the quickest way for organizations to establish efficiency, productivity, and accelerated processes when scaling thousands of contracts.  

• Data extraction 

Contract management is a data-driven operation that requires quick access and extraction of relevant contract-related information such as contract name, location, dates, parties, finances, deadlines, and so on. AI-powered contract management systems can improve data searchability, consolidation, and extraction.  

• Streamline workflow 

AI contract management aids in ensuring that each task moves swiftly and without interruption through its lifecycle. They can easily identify and eliminate any bottlenecks in the contracting process to enhance efficiency. Moreover, AI instills accountability in the contract management lifecycle.  

• Risk assessment 

AI tools make it easy for organizations to assess and mitigate contractual risks. In advanced stages, AI contract management can identify and track significant obligations in each contractual agreement to guarantee compliance and performance. Also, it helps to perform a comprehensive analysis to evaluate the duration and efficiency of each stage of the contract lifecycle.  

Conclusion 

As a result of increased regulatory scrutiny and competition across several industries, businesses are putting more emphasis on efficiency and risk mitigation. With its unique set of role-based permissions, automated workflows, customizable processes, and AI and OCR features, the contract management software solutions make it effortless for organizations to establish productivity, compliance, and competency throughout the contract lifecycle.