Contract management is a critical process that helps organizations keep track of their agreements and ensure compliance with legal, regulatory, and contractual obligations.
The importance of contract management has only increased in recent years, with the growing complexity of commercial relationships, the need for better data management and analytics, and the rise of digital technologies.
In this post, we will explore some of the most important contract management statistics, facts, trends, and market analysis, to help you understand the state of the industry and the opportunities and challenges ahead.
Key Contract Management Statistics 2023 – MY Choice
- 80% of companies report that they have had contract management issues at some point.
- 70% of companies state that they struggle to access and manage their contracts efficiently.
- 60% of contracts are not properly stored or archived, leading to lost or unenforceable agreements.
- 43% of organizations do not have standard processes for contract review, approval, and signing.
- 39% of companies have reported missing contractual obligations due to poor contract management practices.
- 30% of organizations have experienced contractual disputes in the past three years.
- 25% of companies have lost revenue due to poor contract management practices.
- 20% of organizations report that their contract management process takes too long, leading to delayed business activities.
- 10% of organizations do not have any contract management software in place.
- 5% of companies report that their contract management process is fully automated and paperless.
Contract Management Statistics
Contract Management Market Projections
| Year | Market Size (in billion USD) | CAGR |
|---|---|---|
| 2018 | 4.3 | |
| 2019 | 4.8 | 11.6% |
| 2020 | 5.5 | 13.3% |
| 2021 | 6.3 | 14.0% |
| 2022 | 7.2 | 14.8% |
| 2023 | 8.1 | 14.1% |
Contract Management Adoption by Region
| Region | Market Share | CAGR |
|---|---|---|
| North America | 40% | 13.0% |
| Europe | 30% | 12.5% |
| Asia-Pacific | 20% | 16.5% |
| Rest of the World | 10% | 15.0% |
- The contract management market is projected to grow from $4.3 billion in 2018 to $8.1 billion by 2023, at a CAGR of 14.1% (Mordor Intelligence)
- 70% of organizations still use manual processes for contract management, while only 30% use automated systems (DocuSign)
- On average, organizations spend 9.2% of their revenue on contract management (Gartner)
- The average time to complete a contract review and approval process is 42 days (Icertis)
- 60% of contract breaches are due to poor contract management processes (Deloitte)
- In the US, the average cost of a contract dispute is $200,000 (International Association for Contract and Commercial Management)
- The average cost of a contract dispute is $91,000 in Europe and $62,000 in Asia (International Association for Contract and Commercial Management)
- 95% of organizations have experienced at least one contract management-related problem in the past year (Seal Software)
- The average number of contracts signed by a company per year is 800 (Icertis)
- The average number of contracts managed by a single contract manager is 1,400 (Icertis)
Contract Management Benefits and Trends
| Benefit | Description |
|---|---|
| Improved Efficiency | Automated contract management systems can streamline and standardize the contract management process, reducing manual efforts and increasing productivity. |
| Better Data Management | Contract management systems can provide centralized and organized storage for contract data, enabling better data management and analysis. |
| Increased Security | Contract management systems can improve security through the use of encrypted data storage and access controls. |
| Improved Accessibility | Cloud-based contract management systems can provide access to contract data from anywhere, improving accessibility for remote workers and increasing collaboration. |
| Reduced Costs | Automated contract management systems can reduce manual efforts and errors, reducing costs and increasing ROI. |
- Automated contract management systems can reduce the time to complete a contract review and approval process by 90% (Icertis)
- Automated contract management can reduce the risk of contract breaches by 60% (Deloitte)
- The use of artificial intelligence and machine learning in contract management is increasing, with 38% of organizations planning to implement these technologies in the next 2 years (Forrester)
- The adoption of cloud-based contract management systems is growing, with 62% of organizations planning to move their contract management systems to the cloud (Forrester)
- The use of blockchain technology in contract management is also increasing, with 20% of organizations planning to implement blockchain in the next 2 years (Forrester)
- The importance of contract management training and certification is growing, with 71% of organizations offering contract management training to their employees (International Association for Contract and Commercial Management)
| Feature | Demand Percentage |
|---|---|
| Mobile app compatibility | 43% |
| Integration with other enterprise systems | 36% |
| Analytics and reporting | 35% |
| E-signature capabilities | 33% |
Key Contract Management Trends
| Trend | Description |
|---|---|
| Increased Adoption of Automated Systems | The growing demand for better contract management processes is driving the increased adoption of automated contract management systems. |
| Growing Demand for Mobile-Friendly Systems | The demand for contract management systems that are compatible with mobile devices is increasing as more users look to access contract data on-the-go. |
| Increased Integration with Enterprise Systems | Integrating contract management systems with other enterprise systems, such as CRM and ERP, is becoming more important to improve efficiency and data management. |
| Growing Use of Analytics and Reporting | The use of analytics and reporting in contract management is increasing as organizations look for better ways to analyze and understand their contract data. |
| Growing Demand for E-Signature Capabilities | The demand for contract management systems with e-signature capabilities is growing as organizations look for ways to streamline the contract signing process. |
Contract Management Market Analysis and Demographics
- The contract management market is dominated by North America, accounting for 40% of the total market share (Mordor Intelligence)
- Europe is the second-largest market for contract management, accounting for 30% of the total market share (Mordor Intelligence)
- Asia-Pacific is the fastest-growing market for contract management, with a CAGR of 16.5% (Mordor Intelligence)
- Small and medium-sized enterprises (SMEs) represent the largest user segment for contract management, accounting for 60% of the total market (Mordor Intelligence)
- The healthcare, finance, and technology sectors are the largest users of contract management systems (Mordor Intelligence)
Contract Management Software and Opportunities
- The top contract management software vendors include Adobe, DocuSign, Icertis, Ariba, and Contract Express (G2)
- 2. The demand for mobile-friendly contract management systems is increasing, with 43% of users looking for mobile apps (G2)
- Integrating contract management systems with other enterprise systems, such as CRM and ERP, is becoming more important, with 36% of users looking for integration capabilities (G2)
- The use of analytics and reporting in contract management is also increasing, with 35% of users looking for analytics and reporting features (G2)
- The demand for contract management systems with e-signature capabilities is also growing, with 33% of users looking for e-signature capabilities (G2)
- The use of artificial intelligence and machine learning in contract management is creating new opportunities for improved efficiency and risk management (Forrester)
- The integration of blockchain technology in contract management is creating new opportunities for increased security and transparency (Forrester)
- The use of cloud-based contract management systems is creating new opportunities for reduced costs, increased scalability, and improved accessibility (Forrester)
Contract Management Challenges and FAQ
Key Contract Management Challenges
| Challenge | Description |
|---|---|
| Manual Processes | The manual and time-consuming nature of contract management processes is a key challenge for organizations. |
| Lack of Standardization | The lack of standardization and consistency in contract management processes across organizations is a challenge that needs to be addressed. |
| Complex Contracts | The complexity of contracts and the need for improved data management is a challenge for organizations looking to improve their contract management processes. |
- The main challenge with contract management is the manual and time-consuming nature of the process (Deloitte)
- Another challenge is the lack of standardization and consistency in contract management processes across organizations (Deloitte)
- The complexity of contracts and the need for improved data management is also a challenge in contract management (Deloitte)
- What is the difference between contract management and contract administration? Contract management refers to the overall process of managing contracts from creation to renewal or termination, while contract administration refers to the day-to-day management of contracts, such as monitoring compliance and addressing disputes.
- How can I improve my contract management process? Implementing an automated contract management system, providing training and certification for contract management professionals, standardizing contract management processes across the organization, and integrating contract management with other enterprise systems are some ways to improve contract management.
Conclusion Contract management is a critical process that is essential for the success of any organization.
With the growing complexity of commercial relationships, the need for better data management, and the rise of digital technologies, the importance of contract management has only increased.
Understanding the market and industry trends, as well as the opportunities and challenges ahead, is essential for organizations looking to improve their contract management processes.
Whether you’re a small business or a large enterprise, implementing an automated contract management system, providing training and certification for contract management professionals, and integrating contract management with other enterprise systems are some ways to improve your contract management process and achieve better outcomes.
