Realizing Need Of Enterprise contract Lifecycle Management - Icertis

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Contract Risk and Compliance (CRC) at the heart
of Value Creation in Enterprise CLM
Issue 1
Welcome Letter Traditional wisdom in contract
management does not deliver the results
required. A solution limited to workflow and
document management, though useful, limits the
organizations ability to strategically leverage
contracts in improving business performance
while managing the associated risks. Icertis
Contract Management (ICM) enables enterprises to
not only revitalize their contract operations
but to also manage contract risk and compliance
for better business performance.
2 Realizing Enterprise Contract Lifecycle
Management (CLM)
parties, etc. all requiring the enterprises to
have the set of tools to not only get the
contract done the right way but more importantly
bring the contract to life in day- to-day
business transactions. This ensures compliance,
helping an organization realize the full
potential of a contract while identifying and
mitigating any contractual risk through the
lifecycle.
6 From the Gartner Files Market Guide for
Contract Life Cycle Management
22 About ICERTIS
A contract management solution initiative in any
enterprise starts with automating the contract
lifecycle process to bring in some form of
governance and control. Automation brings
improvements in productivity and visibility.
Though useful, this is not enough to deliver the
ideal performance impact. Contracts today are
complexbusiness relationships in new markets,
sales and procurement arrangements with outcome-
based pricing and penalties, linked value
chains with interdependencies between
Samir Bodas, CEO and cofounder
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Realizing Enterprise Contract Lifecycle
Management (CLM)
Post-execution compliance is about ensuring
business is done in accordance with the terms in
the contract. This requires contracts to be an
integral part of the selling and buying
transactions. Terms enforcement on selling and
buying transactions helps realize the full
potential in contracts.
Onboarding a single, enterprise-wide contract
management solution is first step to equip
enterprises to embark on proactive compliance
and risk management. Gartner States, A
significant proportion of all CLM-related
inquiries entering Gartner (40 to 50) are now
aimed at an enterprise scope. One can manage all
types of contract sell side, buy side, admin,
employee, etc. in a single system.
Conventional fragmentation of the buy and sell
sides is counter- productive in todays linked
value chains. One needs the ability to setup any
contract type and its attributes, configure its
workflow, and in turn, manage it in the context
of different functions in business. A highly
configurable contract management platform is
critical to enable these needs. Long term
sustainability is often dependent on how many of
the enterprises needs are addressed by
configuration and how much by customization. It
can be interpreted that the Gartner report
advises businesses to evaluate this aspect
thoroughly. Enterprises should undertake a proof
of concept evaluation to see not just how the
system helps meet user requirements but to also
determine how the configurability and flexibility
of the solution can meet the enterprise needs in
a sustainable way.
Achieving Pre-Execution Compliance An enterprise
CLM is not just about creating and approving
contracts in one system. It is about how to
rationalize and standardize the language across
the enterprise and bear in the system to drive
the inclusion of the right language into a
contract.



Adoption is the Biggest Factor in Enterprise
CLM The most critical aspect of an
enterprise-wide solution is its adoption, as
that in itself lays the foundation of ensuring
compliance and managing risks. Adoption hinges
on ease of use, convenience and how the solution
provides contextual experience for its users.
Enterprise-wide adoption gets enabled through
configurability of the system for different user
segments, support for devices and mobility to
offer convenience, and most of all empowering end
users to engage with the solution through
personalization and self- help. Contextual
experience is often an underestimated factor in
enterprise-wide systems.


Understanding Contract Compliance Contract
compliance is best understood in stages
pre-execution and post-execution. Pre-execution
compliance is all about getting the right
contract done by ensuring the right terms and
language are included in the contract and align
with the business strategy and policies. It also
involves making sure the right governance is
enforced as the contract is negotiated, reviewed
and approved. Most often organizations struggle
with non-standard language, variation in
templates, lack of enforcement of language,
maverick contracting, etc.
Contract Risk and Compliance (CRC) at the heart
of Value Creation in Enterprise CLM is published
by ICERTIS. Editorial content supplied by ICERTIS
is independent of Gartner analysis. All Gartner
research is used with Gartners permission, and
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For example, one of Icertis Fortune 100
customers leverages the platform globally to
author contracts. The enterprise has global
operations in 90 countries and had thousands of
templates in over 40 languages with a large
clause library. Managing the vast expanse of
this content and keeping it updated to align with
changing business needs was a huge expense,
often riddled with incidents of deviations. The
platform not only helped rationalize the clause
and template library but now manages contract
authoring, driven by a robust rules engine that
looks at all the attributes of the deal and
brings in the right clauses to build the
contract. This significantly improved business
velocity while ensuring compliance by including
the right approved language dynamically into the
contract documents. A dynamic approval workflow
that adapted to every negotiation change to
enforce the governance policies of the enterprise
ensured that no undue risk creeped into the
contract during negotiations and all the right
reviews and approvals were in place before
execution.
Enterprises today are a complex form of linked
value chains. Functional silos are sub-optimal.
A digital business today should be able to
surface data and information across the value
chain. In the context of contracts, whats
needed is the ability to establish and manage
relationships between various contracts and their
associated transactions. The ability to link
sell-side and buy-side contracts to drive
mitigation of risks by enforcing terms, alignment
of objectives and roll-up financials is
critical. The Icertis platform supports
enforcement of terms and language across
relationships, enabling outcome management.
Many organizations have fragmented systems across
their global footprint. Not only ERP but even
procurement systems are separate across regions.
This hampers the effectiveness of global sourcing
organizations as contracts tend to live outside
of this ecosystem, making it difficult to
enforce terms, leading to leakages and missed
savings. Icertis Contract Management, deployed in
cloud, not only manages global sourcing
agreements but easily connects with procurement
systems to enforce contract terms on pricing and
discounts, and also brings purchase orders and
invoice data back into the contract system. This
enables wider adoption of global sourcing
agreements and better opportunity to tap into the
savings potential of the contracts. The
availability of the information in the contract
system makes it a consolidated hub of data,
giving significant insights into supplier
contract performance. This extends beyond
commercial terms compliance to include SLA and
penalty tracking. Transaction data from
enterprise systems is easily pulled into the
platform to review SLAs, monitor potential
deviations and also provide inputs on penalty
implications as per the contract terms.
Ensuring Post-Execution Compliance Often
enterprises and contract management solutions
will help get a good contract done. But that is
not enough to ensure the promise and potential
of the contract is realized. Managing the
contract obligations and bringing the contracts
to bear in business transactions to ensure
compliance in a way that does not hamper with
speed of execution is critical. Traditionally
contracts, once executed, resided in repositories
that delivered good search capability but often
had a hand-shake with other enterprise systems.
The ICM platform delivers a best- in-class
capability to manage contract compliance post
execution in integration with other enterprise
systems. Enforcement of terms, calculation of
incentives / rebates / discounts, tracking of
contract SLAs and resulting penalties are some
of the key compliance areas that enable true
value realization for enterprises.
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A sell-side example of post-execution compliance
is best explained by an Icertis customer who
leverages the system to manage dealer
agreements. Not only does the platform manage the
contract lifecycle along with the definition of
all pricing terms and discount structures but
extends the usage to helping the customer
actually calculate the dealer discounts and
incentives. Integration with a sales order
system brings in the order data, which is then
matched and validated against contracts. A
calculation engine then triggers the calculation
of discounts and rebates based on pricing terms
defined in the contract. The right discounts are
applied and the rebates processed through the
system. This has significantly improved the
velocity of business, plugged leakages and also
improved customer satisfaction all tangible,
measurable impacts on business performance.

There are many aspects of contractual commitments
that are not captured in an enterprise system. A
robust way to manage these obligations is
critical. An IT Services Company discovered that
its commitment to have its consulting staff
undergo special drug testing (before being
deployed on customer engagements) was missed
somewhere along the way, leading to penalty for
non-compliance. They also noticed provisions on
forex fluctuations or data security commitments
had serious implications of non-compliance. A
complete obligation lifecycle management
capability that can help identify, assign and
track these to completion is critical to ensure
that such contractual obligations are as equally
managed as the commercial aspects.
A configurable risk model looks at risks across
various categories of contractual risk,
financial risk, performance risk, compliance risk
and supplier/customer risk. The model natively
hooks into contract data, associated
transactions and identifies risk as per the risk
rules setup. Changing attributes of the contract
and its transactions or the profile of
participating entities drives the risk model to
calculate risk scores on each category (based on
the scoring rules) and identify high risk areas
for immediate alerts and visibility to the
stakeholders. A holistic view helps businesses
understand the contract in its totality and not
in just isolated incidents of risk, which
typically get surfaced during negotiations. For
example
Managing Contract Risk The traditional CLM
perspective had, at best, a constricted view of
risk management. Gartner reports Few companies
have viewed CLM as strategic, or from a risk
management perspective. Contract risk is not
just about deviations in language or terms taken
on during negotiations. It needs to have a more
holistic view of all aspects of the lifecycle
the financials, actual performance, the risk
associated with participating parties and the
risk of non-compliance. Icertis Contract
Management has a completely integrated contract
risk management model that helps identify and
proactively manage risk across these categories
throughput the lifecycle of a contract.

• It tracks the language and terms in the contract
  and identifies deviations, outliers to calculate
  contractual risks. A non-standard liability
  clause or a use of a fallback instead of a
  primary has a different risk profile associated
  with the contract.

• It captures financial terms like contract value,
  payment terms and pricing to assess financial
  risk

• Actual transaction data, SLA data for the
  contract or from related contracts is assessed
  to calculate the performance risk

With almost all business transactions conducted
on the basis of a contract, identifying and
managing risk arising out of contractual
relationships is more critical than ever before.
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• The ICM platform can also connect to outside data
  sources like DB and bring in credit appraisal,
  supplier evaluation and other risk related data
  to bear into risk profiling of the contract

Summary Icertis Contract Management is a
comprehensive platform that enables enterprise
contract management with a high adoption rate
and the easiest-to-use user interface. The system
builds on this foundation to deliver a robust
contract compliance and risk management
capability, helping organizations achieve higher
levels of maturity in their contract management
operations.

• Integrate with external data sources like Thomson
  Reuters to get live feed, process events data to
  identify and notify on potential risks or
  opportunities

• The compliance risk is evaluated on issues with
  obligations or non- compliance in transactions

1 Deploy the contract management solution to
manage enterprise- wide contracting processes by
onboarding all contract types across functions
and regions. Leverage this to make the system a
single source of truth on everything related to
contractual relationships.
The consolidated risk gets assessed on scheduled
frequency (like monthly / quarterly) and on key
events throughout the lifecycle of the contract.
The ability to identify the risk right from
creation through its negotiation and post
execution is critical, and presenting this
information in a timely manner equips the
business to take quick action and respond faster.
2 Drive adoption through the enterprise with a
focus on contextual representation with the
right convenience of usage with enablement of
mobility. Evaluate the solution not just for end
user usage but also for ease of configuration
and how it enables the enterprise to be agile in
responding to changing business needs.
A holistic model to identify contract risk helps
enterprises plan mitigation actions in time. The
Icertis platform helps customers also setup
mitigation actions to manage the resulting risk.
Such actions can be assigned to individual owners
and can be tracked to completion. Getting
proactive visibility on contract risk on a global
scale and across a portfolio of contracts helps
enterprises manage their contracts better.
3 Integrate with enterprise systems to drive
compliance of contractual terms. Leverage the
platform to extend its usage in order to drive
commercial processes to ensure savings and
significant improvements in business velocity.
4 Provide holistic contract risk management to
enable proactive visibility and management of
high risk contracts. Leverage the system to not
only identify risks but to also set mitigation
actions in order to manage the contract risk to
help enterprises reduce exposure and protect
against liabilities and business losses.
Source ICERTIS
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Market Guide for Contract Life Cycle Management
From the Gartner Files
Many vendors handle international support
through loosely coupled partners or via a
remote resource.
CLM is evolving from an operational record-
keeping system, primarily used for legal audit
purposes, to an enterprise-level core system
addressing business risk, costs and the pursuit
of revenue maximization. CIOs and
line-of-business management need to identify the
right solution for their needs.
structures required to enable the optimal
management of all contracts affecting the
business.

• First establish your current process
  capabilities before engaging vendors, plus your
  short-term and long-term capability aspirations.
  Assess short-term capability requirements based
  on needs versus likes to get to minimum
  essential, core, capability enablement.

Market Direction Historically, CLM has been
viewed by user organizations as an operational
cost of doing business. Few companies have
viewed CLM as strategic, or from a risk
management perspective. There has been a failure
of the contracts/legal team to make a strategic
case to C-level executives on how CLM can save
(or make) money and how the applications, when
appropriately applied with reasonable controls,
can reduce corporate risk. C-level executives
wont understand until contracts/ legal and, in
many companies, procurement and sales join
forces and create a strategic business case.

• Key Findings
• The vendor market for contract life cycle
  management (CLM) solutions is fragmented and for
  the most part
• immature when compared with ERP or other
  enterprise-level markets. Providers range from
  small vendors with 2 million to 3 million in
  revenue to modules within multibillion-dollar
  enterprise vendors.

• Evaluate vendors CLM offerings but also broader
  suite capabilities where applicable, since
  natively integrated complementary modules can
  improve CLM value-add and ROI.

Market Definition This document was revised on 25
September 2015. The document you are viewing is
the corrected version. For more information, see
the Corrections page on gartner.com.

• The historic roots of a vendor, either buy
  side or sell side, plus the percentage of
  customers using its solution for one
• or other of these contract types, can be a
  strong indicator of the vendors level (depth)
  of experience, or lack thereof.

As result of this failure to capture the
attention of the C-level, IT investment in CLM
has been minimal. Vendors, too, have represented
the market poorly, selling departmentally, with
few vendors historically presenting their case
for an enterprise- centric approach to CLM.
Contract life cycle management denotes a
solution and processes for managing the life
cycles of contracts and agreements created
and/or administered by, or affecting, an
organization. These include third-party or
internal contract agreements, such as
outsourcing, procurement, sales, nondisclosure,
intellectual property (IP), leasing, facilities
management, employment and other licensing, plus
any other agreements or contractual documents
containing obligations that affect the
organization now and/or in the future.

• Most customer deployments are custom builds,
  specifically created, configured and/or modified
  for that specific customer, which makes the
  comparison of reference customers challenging.

CLM Is Moving From Nice to Have to Need to
Have A significant proportion of all CLM-related
inquiries entering Gartner (40 to 50) are now
aimed at an enterprise scope. Leading
organizations are seeking a wide CLM context,
encompassing all (or most) contract processes
and agreement types across the organization.
This wider context is referred to by Gartner as
enterprise CLM.

• Product maturity varies widely by process, and
  while CLM is used in all industries, with highly
  regulated industries exhibiting the highest
  adoption, most vendor solutions are generic,
  delivering little industry specialization out of
  the box.

CLM spans all processes associated with the life
cycle of each contractual agreement, from
initial request through contract discovery,
authoring, redlining and negotiation, valuation,
approval, execution, order tracking/matching,
compliance/ obligation management, amendments,
dispute management, auditing, reporting, and
fine-tuning to eventual archiving. CLM
encompasses repository and clause library
construction and management, integration with
other systems, and the organizational

• Recommendations
• Beware User references are more likely
  representative of the vendors professional
  services capability than the vendors solution.
  Investigate references
• thoroughly. In most cases, customers have been
  supplied custom solutions, which are not
  representative of what you would receive without
  similar custom activity.

A proportion of organizations will select to
outsource all or part of their CLM requirements.
Many user organizations are ill-equipped for the
changing complexity of contractual processes, nor
do they have the organizational structure to
effectively manage contracts globally, across
all departments. Few have budgets to increase
internal legal department staff to handle

• Ensure you speak to the local resource when
  local vendor support is required.

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increased volumes. This is, in part, leading to
a growth in business process outsourcing (BPO)
service providers eager to assist with the
operational needs of global businesses.
to deal with the hundreds of contract types of
ever-increasing complexity necessary to run a
company.
Many CLM vendors have been in place for many
years. However, by comparison to other
enterprise solution areas, the vendor market to
support CLM is, for the most part, immature
and ill-equipped to support user organizations in
their quest for comprehensive process maturity
without extensive configuration and/or
modification beyond that of the basic setup.
This limitation includes an omission, among most
vendors, of prepackaged integrations to other
systems that, with the possible exception of
solutions such as Salesforce, are individually
built for each customer by the majority of
vendors. Also missing is an end- to-end view of
contract interdependencies, plus an ability to
protect the organization by proactively
capturing, scanning and routing all contracts
entering and leaving the organization (a control
tower model as seen at Level 5 of the discovery
process capability in the Gartner CLM maturity
model). Licensing styles also vary greatly, as
does the quality and comprehensiveness of
licenses and statements of work, which, given
the subject under discussion, is somewhat ironic.
But that does not mean that vendors must cease
approaching the market departmentally and focus
all effort at the executive level. Depending on
the type of organization, vendors need to have
multiple go-to-market messages for different
prospect targets (it may be strategic/risk for
large businesses, and tactical/operational for
small or midsize businesses SMBs). Today,
nearly all have a single go-to-market approach
and little industry-centric RD concentration.
CLM is not just a practice for the legal
department, nor is it just a big-organization
issue. It requires the focus of CIOs and IT
leaders, but it is not just an IT issue
although it is fast becoming a big data issue
for IT to support. Chief procurement officers,
sales and supply management must also take
responsibility for the organizations CLM
process competency.
Market trends are forcing recognition that CLM
is no longer a nice-to-have capability Its a
priority. These trends include
From a supply chain sourcing perspective,
large/mature companies are making CLM core as
part of the pace-layered system of record,
whereas SMBs can use CLM apps to differentiate
their contracts/legal capabilities as a system
of differentiation. Vendors must address these
differences.

• An increase in global business velocity
  requiring faster execution of the contracting
  process

• Increased demands on governance, risk and
  compliance (GRC) management

Market Analysis Introduction Through late 2014
and into 2015, Gartner gathered information from
a cross-sample of 30 vendors of CLM solutions,
plus a number of their customers, in order to
provide a Market Guide for CIOs, IT leaders and
line-of- business management to be leveraged
when identifying and selecting vendors to
support CLM process maturity.
This is not to say that all vendors are immature,
but it does mean that due diligence is required
when engaging vendors and finalizing licenses
and deliverables.

• A push for legal self-service to reduce
  operational costs and handle increased volumes

Cloud, or Bust While more than half the installed
base of customers is using their solution
on-premises, most (nearly all) new sales are
either hosted subscriptions or delivered under a
full software- as-a-service model. The decision
to implement in the cloud or on-premises depends
on the individual user organization and is
rarely justifiable when based only on price.
Indeed, there is little evidence that cloud
deployments end up less expensive in the long
run. Nevertheless, customers of CLM seem
comfortable with a cloud-based subscription model.

• Digitization of paper contracts, embracing
  e-signature and so forth

• The move by many companies toward more diverse
  sales and licensing models

Important The list of vendors included in this
report is by no means exhaustive. Nor does the
list suggest that listed vendors are in some way
superior to vendors not covered. There are more
than 80 vendors in the CLM market today, each
with very different characteristics and
abilities. Inclusion in this report was
determined in order to represent a wide spectrum
of vendor types, coverage and abilities.
Additional vendor names and analysis are
available through the Gartner inquiry process.

• Companies expansion into new markets (including
  merger and acquisition activity)

• Increased personalization of customer
  requirements

Organizations are realizing that many contracts
across the business are interdependent and that
control of just the common contract types is not
enough to mitigate risk of nonstandard terms to
the business. Organizations are acting to mature
their contract process capabilities
Cloud or not, the dynamics of the market are
changing fast, and vendors must also adapt if
they are to capture the burgeoning market
opportunity.
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CLM Market Potential Table 1 is based on census
data provided by the U.S. government in 2012
related to the number of organizations in
the U.S. As shown, even when applying very
conservative estimates related to CLM uptake and
average solution cost, plus assuming that every
current worldwide CLM customer resides in the
U.S., CLM has the potential to become more than
a 2.8 billion solution market in the U.S.
alone. Europe would likely equate to double that
opportunity. Today, extrapolating from the
revenue and customer numbers of those vendors
surveyed, CLM globally registers less than 15
of the market potential in terms of numbers of
organizations and revenue generated. To call it
slow burning is an understatement, despite it
being a defined market for more than 10 years.
which is using one vendors CLM solution for all
contract types. Nor has any user company
presented itself at Level 5 of the CLM maturity
model, although many harbor the aspiration.
CLM Customers and Customer Needs CLM adoption is
primarily among large organizations, those with
revenue of more than 250 million (see Figure
1). This is partly due to portfolio and contract
complexity, but also because transaction volumes
become more noticeable, potentially
highlighting the legal department as a
bottleneck. Not many deals need to be lost
through tardy responses before someone senior
notices.
The vendor solutions have yet to be fully tested
because the vast majority of companies have yet
to mature beyond Level 2 of the CLM maturity
model, which means vendors are not encouraged
toward, or remunerated for, investment in
capabilities that take customers beyond the
first rung of CLM maturity (defined as Level 3 of
the maturity model). For similar reasons, few
vendors are experienced at negotiating at the
board level within enterprise-level user
organizations, from which future CLM sales will
increasingly be driven (signed off).
As highlighted in yellow in Figure 2, while CLM
spans many industries, highly regulated
industries lead the way in terms of CLM
adoption. But many other markets will greatly
increase adoption as products and services
become more personalized, global sales markets
open further, IP protection fears increase and
new technologies (such as 3D printing and the
Internet of Things) impact the market.
As explained earlier, the current shift of
inquiries seeking enterprise CLM may invigorate
the market and begin to grow it toward its
potential. Many vendors are enhancing their
services and readdressing their customer
engagement programs to account for this shift of
emphasis. Most seek to land and expand their
relationship with customers. Some have developed
consistent implementation methodologies and are
beginning to build stronger value propositions.
Yet few have productized their offerings to
enable a modular adoption experience for
customers as they increase capability. Even fewer
have consistent global support coverage.
The CLM market is poised for strong growth. Yet
today, the market reflects a the chicken or the
egg scenario, where one side or the other needs
to invigorate the market for it to grow.
The legal industry incorporates the highest
number of CLM customers based on the user counts
of those vendors listed, although this does not
signify maturity. In many cases, these
organizations simply use the tool in order to
gather contractual information for use related
to case history and so forth (below Level 3
maturity). After the legal sector, the public
sector/not-for-profit industries are the most
prominent.
Few vendor solutions possess strength across all
processes of CLM, nor do many easily account for
the management of both structured and
unstructured content. In fairness to the
vendors, however, Gartner has yet to meet a
reference for any of the vendor solutions,
whether on the list or not,
Table 1. U.S. CLM Market Potential
Number of Organizations Average Solution Cost Market Opportunity Assumptions
Large (1,000 or more employees) 9,158 120,000 384,636,000 35 of market licenses CLM
Midsize (100 to 999 employees) 92,484 70,000 1,294,776,000 20 of market licenses CLM
Small (fewer than 100 employees) 5,624,518 20,000 1,124,903,600 1 of market licenses CLM
Total 2,804,315,600
Source Statistics of U.S. Businesses, United States Census Bureau (2012) and Gartner (July 2015) Source Statistics of U.S. Businesses, United States Census Bureau (2012) and Gartner (July 2015) Source Statistics of U.S. Businesses, United States Census Bureau (2012) and Gartner (July 2015) Source Statistics of U.S. Businesses, United States Census Bureau (2012) and Gartner (July 2015) Source Statistics of U.S. Businesses, United States Census Bureau (2012) and Gartner (July 2015)
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FIGURE 1 Percentage of Customers by Customer
Revenue Size (Vendor-Reported Data)
Source Gartner (July 2015)
Note The others category incorporates
industries such as sporting event management and
hospitality, but it also includes uncategorized
responses from SAP (including SAP Ariba),
which was the only vendor to claim that it does
not categorize its customers by industry
vertical. This suggests a horizontal functional
footprint, but it may also reflect that many
licenses of its CLM modules are hidden within
wider ERP or procurement suite
implementations, where CLM is a line item but not
significant or specifically itemized.
A total of 8,023 user customers are represented
in Figure 2. During reference calls over the past
year, many customers commented that their
specific implementation was, in their opinion, a
custom build, based on a horizontal template or
framework system. However, most did not see this
as a negative or as detrimental because the
providers were very nimble in terms of their
ability to prototype, configure and customize
the solution such that implementation times were
rarely heavily impacted by the horizontal
starting point.
Beware User references are more likely
representative of the vendors professional
services capability than the vendors solution.
Investigate references thoroughly. In most cases,
customers have been supplied custom solutions,
which are not representative of what you
would receive without similar custom activity.
Also examine the experience of vendor-assigned
implementation resources, relative to the
contract types you intend to control.
However, the custom nature of so many
implementations does present a challenge to
prospective customers when deciding which vendor
solution to select for a project, particularly
when seeking representative references. It is
important that you investigate with every
reference what percentage of the solution was
out of the box and what was added through
customization.
It is for this reason that Gartner does not
primarily assess the current vendor market based
on its functional capabilities, beyond
suite-based, buy-side CLM solutions. Each vendor
claims to be able to do pretty much anything
required by the customer. Several customer
references mentioned this issue and stated that,
in their circumstances, this required significant
custom effort by the vendor on behalf of the
customer,
SAP is not alone in its horizontal approach to
the market. Most CLM vendors exercise a
horizontal, generic approach to sales
customizing and configuring solutions to
customer needs during the implementation phase
on an individual basis.
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greatly increasing costs. To overcome this
issue, Gartner assesses vendors based on the
vendors ability to aid customers to enhance
their CLM process maturity to their desired
level. The ability to assess the vendors
objectively is one of the reasons Gartner
developed the CLM maturity model contained in
Toolkit Contract Life Cycle Management
Maturity Model.
FIGURE 2 Number of Customers by Industry
(Vendor-Reported Data)
Subscription/license and service costs tend to
reflect customer revenue size. Midsize companies
are likely to pay twice as much as small
organizations, while large organizations can pay
more than double that of a midsize business.
Often, it is not the out-of-the-box solution or
even the subscription costs that inflate the
costs It is the configuration and customization
services that alter pricing dramatically.
Configuration is a necessary requirement, but
customization needs will greatly depend on the
vendor chosen. Based on a large number of client
inquiries and vendor customer references, what
is apparent is that the historic footprint of
the CLM vendor and the concentration of its
customers using its solution for contracts on
the buy side or sell side of the business can
greatly affect the vendors depth and experience
of different contract types and that of its
implementation resources (see the Historic
column in Figure 3). This is important when
considering a vendor to support an enterprise
CLM approach, covering all or most contract
types in the organization, as many vendors will
offer little best-practice guidance beyond their
historic roots.
Note Industries with less than 10 include
aftermarket, mining, non-life sciences contract
manufacturing, hospitality, paper and pulp, real
estate and facilities management, and
metals. Source Gartner (July 2015)
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Note The percentages are not meant to add up.
By example, a customer using the solution on the
sell side may also use it for NDAs, for example.
many vendors have not put formal channel
partnerships in place, or they cover a specific
location in an ad hoc, opportunistic manner.
Figure 3 represents the percentage of customers
using each vendors solution segmented between
In terms of Figure 4, the basic guidance is
this The more regions that a vendor claims to
cover with a direct local office, the higher the
risk that its claims will be inaccurate or
overstated. Of course, this is a generalization,
but it is a worthy (albeit skeptical) starting
point.

• Buy-side contracts (procurement-related
  contracts, including IT contracts)

CLM Vendor Regional Coverage Where local vendor
support is required, ensure you speak to the
local resource. Many vendors handle
international support through very loosely
coupled partners or via a remote resource.

• Contracts such as nondisclosure agreements
  (NDAs) or other agreement types not covered in
  the other groupings

• Employment-related contracts

Many vendors cover regional needs remotely,
either directly or with a partner in one region
that claims to cover the rest. Clearly, vendors
such as IBM, Infor and SAP are represented in
many countries, but even this does not guarantee
CLM experience or industry depth among the local
resources. In all cases where local deployment
is required, check local references, and do not
assume the vendor has direct
It is hard not to be slightly skeptical when
considering how many vendors in the CLM market
approach international support. Vendor size does
not indicate a wider perspective or coverage,
nor does the number of users necessarily
indicate increased depth of experience. The
smallest of vendors can develop relationships
with partners to support local international
deployment needs. The problem is that

• Sell-side contracts

• Customers using the product on the buy side and
  sell side1

Also represented is the age of the vendor and
its home location, plus guidance related to the
percentage of customers using the vendors
product to support processes related to buy-side
and sell-side contracts.
FIGURE 3 Contract Type Percentages
(Vendor-Reported Data)
Source Gartner (July 2015)
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resources or partners where it claims to have
representation. Many partners may be very
loosely coupled and may not know the product or
industry well, or they may not use the same
implementation methodology, or provide the same
response to SLAs. In short, apply caveat emptor
to regional deployments (the principle being
that the buyer alone is responsible for checking
the quality and suitability of goods before a
purchase is made).
FIGURE 4 CLM Vendor Regional Coverage
(Vendor-Reported Data)
CLM Vendor Functional Capabilities Before
engaging vendors, first establish your current
process capabilities, plus your short-term and
long-term capability aspirations. We asked the
surveyed CLM vendors to rank their functional
capabilities across the life cycle of CLM, based
on scores from 1 to 15, where 15 indicates the
highest functional richness (see Figure 5). The
aggregated results from vendor scores proves
that it is hard to find a single vendor with the
perfect solution for your needs. The
significance of the higher-average ranking is
less significant. More important are those
rankings below 8, with the exception of ranking
for discovery, which is a generally a specialist
enablement handled by vendors such as Seal
Software. If you complete the maturity model
Toolkit and aspire to Level 4 or above, many of
these process areas (such as obligation
management or risk/value assessment) may require
additional system development, stalling your
maturity progression. Source Gartner (July 2015)
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It will be hard for you to select from the wide
array of vendors, where some compromise may be
required, without first establishing your
existing capabilities and your short- and
long-term aspirations (your needs, not your
wants).
Evaluate vendors CLM offerings but also broader
suites where applicable, since natively
integrated complementary modules can improve CLM
value-add and ROI.
There are currently more than 80 vendors in the
CLM market, not including many document
management and enterprise content management
(ECM) system and tool vendors, some of which can
provide support for limited (below Level 3
maturity) CLM capabilities.
Many vendors offer CLM as part of a larger
suite, or they provide add-on or complementary
modules to their CLM offering. Where such
capability is natively integrated, it can remove
many integration issues or customization needs.
Advanced Software Concepts (ASC) ASC was
established in 1992. Its solution, ASC
Contracts, is aimed at customers seeking the
full life cycle of CLM. ASC is based from
offices in the U.S. and Canada and through
partners elsewhere, and its product is most
commonly used in the communications and media
sector, although it has a number of customers in
energy, healthcare, high tech and industrial
manufacturing. ASC claims that most of its
customers (more than 70) are large enterprises,
with more than 10 billion in revenue. ASC has a
slightly higher usage on the sell side than on
the buy side. Few
By utilizing Gartners Toolkit Contract Life
Cycle Management Maturity Model, you can
establish your current and aspirational capability
goals. Consider confining short-term
aspirations to minimum essential core needs,
which alleviate identifiable risks and costs.
Once value is established, further maturity is
more readily supported by the business.
Representative Vendors For the purposes of this
Market Guide, we have included details related
to 29 vendors in the CLM market. This list is by
no means exhaustive, nor is it an indication
that the listed vendors are more, or less,
comprehensive than others in the market.
Information on additional vendors not listed
here can be obtained through inquiry by
contacting your Gartner representative.
But the Toolkit can also help engage members
from other parts of the organization and
stimulate debate about the complete
organizations approach to CLM. Customers that
have used the tool report that the key value of
the model is its ability to stimulate internal
debate and recognition of current operational
frailties.
FIGURE 5 Average Rank of Functional Depth of
Vendor Solutions (Vendor-Reported Data)
Source Gartner (July 2015)
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customers use its solution outside these areas.
Nearly all its customers license by
subscription. ASC also provides solutions for
form management, as well as for pricing and
quoting requirements. The solution also
incorporates integration to Salesforce.
industries public sector (including not-for-
profit organizations), high tech, and banking
and securities. While Beach Street has a small
number of customers, many use its solutions on
the buy side and sell side. Its Clause Library
System and CLM solution modules are sold as
bundled packages that have a perpetual license
with an annual maintenance and support fee.
the U.K. It primarily serves the energy and
utility sectors, although it also has a small
number of midsize customers in the high- tech,
financial services and pharmaceutical
industries. While the product, Contiki ECM,
serves fewer customers than many other
providers, the nature of its customers
business environments means that the contracts
dealt with by the product tend to be highly
complex and long term and require the inclusion
and tracking of many interdependent documents.
Most of its customers use the product on the buy
side, with 25 using the product for both the
buy and sell sides.
Apttus U.S.-headquartered Apttus was founded in
2006. The Apttus solution, Apttus Contract
Management, is built on the Salesforce1
platform. Its CLM capabilities are closely
integrated with its other sell-side solutions,
but they are also applied to buy-side needs in
support of supplier relationship management (such
as supplier onboarding processes for sourcing
and requests for proposals, information, quotes
and so forth and vendor management). Its
primary industry is high tech, plus business
services and communications and media. Apttus
has also seen considerable growth of late with
enterprises in the manufacturing, life sciences
and financial services sectors. Customers of
Apttus Contract Management tend to be at the
upper-midmarket or enterprise level (250
million to 10 billion in revenue).
Business Integrity Business Integrity was founded
in 1997 and has offices in the U.K. and U.S. Its
solution, ContractExpress, has customers in all
size ranges above 50 million in revenue. The
solution includes integration to Salesforce and
Microsoft SharePoint. Its customers are
predominantly in high tech or business services.
The solution, which is used mostly on the sell
side but has one-fifth of its customers using
the product for both buy- and sell-related
contracts, focuses on the creation and management
of wizard-based contract templates. In addition,
Business Integrity holds several
contract-automation- related patents in the
U.S., emphasizing its focus on self-service ease
of use.
CobbleStone Systems U.S.-headquartered
CobbleStone Systems has been providing contract
management software, implementation and
maintenance services worldwide since 1995,
mostly serving midsize businesses (less than 1
billion in revenue) and large businesses. Most
of its customers (65) hold a subscription
license versus a perpetual on-premises
license. CobbleStone is a U.S. federal contractor
on the General Services Administration (GSA)
Schedule, and although its customers are spread
across many industries, healthcare, public
sector and pharmaceuticals are the most
prominent. Its flagship product, Contract
Insight, includes functionality to support full
CLM for buy-side and sell-side contracts, NDAs,
employment and partnering agreements, and so
forth, plus online bid/ solicitation management
and document scanning and management.
CLM Matrix CLM Matrix offers a SharePoint-centric
solution. Many of its customers begin small and
then grow in competency over time, using its
Visio-style business process modeling tool to
build a graphical representation of CLM business
processes. The CLM Matrix solution is found in
industries such as pharmaceuticals, healthcare,
high tech and the public sector. The solution
can be clause- or template- based, including a
rule-based clause library. While many customers
use the solution for buy-side or sell-side
contracts, only 10 use the solution for both.
b-pack (Part of Selectica) Among CLM vendors,
b-pack is rare in that it is headquartered in
France. The company was founded in 2001 and
delivers its contract management capability
tightly embedded within its procure-to-pay
solution and rarely if ever stand-alone.
According to b-pack, all its customers are on the
buy side. Most of its customers are midsize
(less than 1 billion in revenue), with most in
banking and securities, business services, or
energy. In March 2015, b-pack was acquired by
Selectica to enhance its own procure-to-pay
capability.
Contract Logix Contract Logix began its operation
in the U.S. in 1997. According to the company,
25 of its customers use the product for both
buy-side and sell-side contracts, plus all
customers use the product for NDAs. The system
comes in multiple editions and is modular,
allowing for flexible implementation. The
solution can be provided on-premises or hosted.
Its most prominent industry sector is healthcare.
Beach Street Consulting U.S.-headquartered Beach
Street Consulting was founded in 2004. Beach
Street says that its customers tend to be large
enterprises (more than 10 billion in revenue)
in three
CMA Contiki CMA Contiki is one of the longest-
established CLM providers, having been
established in Norway in 1989. Contiki now
operates from offices in Norway and
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Corridor Corridor is headquartered in the U.S.
and began business in 1996. The Corridor
Contract Management (CM) .app is built on top
of Microsoft SharePoint. Its customers use the
product predominantly on the buy side, and its
most penetrated industry is healthcare. Most
customers license the solution on-premises under
a traditional license and maintenance
agreement. Corridor claims to have direct offices
in all regions.
with less than 50 million in revenue. More than
80 of Gatewits contract management customers
are in the public sector or are not for profit.
The solution is licensed as a module within a
suite of products from Gatewit focused on
buy-side (e-procurement) requirements.
small businesses (less than 50 million in
revenue). Most of HotDocs customers use the
solution for agreements such as NDAs, with much
fewer using the product to manage commercial
contracts on the buy or sell side. Customers are
mostly in the legal, banking, the public
sector/not-for-profit or insurance industries.
HotDocs is deployed both on-premises and hosted
in the cloud.
GEP GEPs solution, Smart by GEP Contract
Management is a module within GEPs spend,
sourcing and procurement solution Smart by GEP.
The solution is primarily used by large
enterprises (more than 1 billion in revenue)
across a number of industries, with nominally
more customers in industrial manufacturing and
professional services/ consulting services.
U.S.-based GEP is the only provider on this list
that also provides a series of BPO services to
its customers, including transactional contract
management outsourcing services.
IBM (Emptoris) IBMs contract management
capability is available as a stand-alone
solution, as well as part of IBMs Emptoris
Strategic Supply Management solution suite. IBM
claims to have clients deployed in a wide
variety of global industries and has strength in
regulated industries, including financial
services, energy (oil and gas), pharmaceuticals,
biotech and particularly healthcare, which seems
to be its strongest industry. IBM notes that 50
of its clients use the product in support of
buy-side activities, 35 for sell side, and 15
for buy side and sell side. This is not
surprising, given the focus of the wider IBM
Emptoris suite, which is primarily focused on
supply-side requirements. Although headquartered
in the U.S., IBM has a strong global presence.
The vast majority using IBM Emptoris are
enterprise-level organizations (more than 1
billion in revenue).
Curtis Fitch U.K.-headquartered Curtis Fitch
focuses almost exclusively on buy-side contracts
with its product CF Contracts. The solution
provides the ability to build contracts from
predefined clauses or from template documents.
Curtis Fitch also provides CF Contracts alongside
its sourcing solutions. CF Contracts is used in
a number of industries, including Financial
Services, Food and Beverage, and Retail, but is
extensively industry-agnostic. According to the
vendor, the product is used by most organization
sizes on a subscription basis.
Gimmal Gimmal Contract Management was created
through the recent acquisition of Prodagio
Software, which was established in 1997 in
the U.S. Gimmal provides solutions and services
to support enterprise collaboration. Gimmals
customers use the solution to manage the life
cycle of NDAs and other agreements. Thirty- five
percent of customers use the solution to support
buy-side activities, with 28 using it to support
the sell side. Less than 10 of its customer use
the solution for both. The solution is licensed
by the user and is available in the cloud or
on-premises. It is primarily used by
organizations in the public sector/not-for-
profit and communications and media, but also
other industries. Most of its customers are lower
enterprise (1 billion to 10 billion in
revenue), which predominantly license the
solution under a subscription model.
Exari Exaris Contract Management solution is
used in banking, insurance, financial services
and technology/media companies and in government
departments. Customers use the solution
primarily on the sell side. Ten percent of
customers use the product on both the buy side
and the sell side. Exari is headquartered in the
U.S. and serves customers of most sizes. Exari
says that, while nearly all customers license on
a subscription model, 80 of customers use the
product on-premises.
Icertis Icertis was formed in 2009. Its flagship
product is Icertis Contract Management ( ICM).
Most ICM implementations tend to be
enterprisewide, covering multiple contract types
across global operations. The public
cloud-delivered tool is very configurable, easy
to use and fast to deploy, according to
customers, although most projects are subject to
some custom build. Icertis can be of interest
when multiple content types are required or
where integration to other enterprise systems is
required. Icertis has customers in
manufacturing, business services, pharmaceuticals
and IT, among others.
Gatewit Gatewit is unique in this list as the
only vendor headquartered in Portugal. Its
solution, Gatewit Contract Management, is almost
exclusively focused on very small organizations
(primarily in local government),
HotDocs U.S.-headquartered HotDocs was founded
in 1989. HotDocs has a large volume of
customers, more than 80 of which are
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covers the full life cycle of CLM. Despite
Novatus buy-side focus, 25 of its customers
use the product on both the buy side and sell
side. The hosted/private cloud,
subscription-based solution is mostly licensed
by midsize businesses (100 million to 1
billion in revenue) within the healthcare,
high-tech and retail industries. Novatus has
partnered with Seal Software for discovery.
some customers have extended its use to
sell-side and other types of contracts, such as
NDAs. SAPs Ariba has one of the largest CLM
customer communities in the market, despite only
a quarter of its total procurement customer base
using its CLM solution. Established in 1996,
U.S.- headquartered Ariba sells Ariba Contract
Management as a module of its suite into most
industries, including financial, business
services, manufacturing, oil and gas, utilities,
telecommunications, consumer packaged goods,
retail, university and education, and
healthcare. Sixty percent of its customer base
are lower enterprises (1 billion to 10 billion
in revenue), and a further 20 are upper
enterprises (more than 10 billion in revenue).
Customers are generally midsize ( with 250
million in revenue) or bigger, although lately
most are above 1 billion in revenue.
Infor Infor Lawson Contract Management is a
tightly integrated extension of the Infor Lawson
Supply Chain Management solution. Licensed
on-premises or hosted, its small list of
primarily U.S. customers (less than 100) utilize
the solution, almost exclusively, for buy-side
activities. Customers are primarily in the
healthcare or public sector industries. The
template-based solution is mainly valued for its
repository, rebate management, tier-pricing
functionality, enterprise search engine,
contextualized alerts and Infors integration
platform (Intelligent Open Network ION) which
aids integration to other products. Infor has
also announced a newly created, cloud-delivered
contract management solution due to launch
before the end of 2015, which will be aimed
initially at sell- side manufacturing or
distribution-centric contract requirements.
Revitas Revitas Contract Manager is an integral
part of the Revitas solution suite. It covers a
wide span of contract management needs,
including document authoring and global and/or
multidivisional user security controls.
Established in 1989 in the U.S., Revitas focuses
strongly on the sell side, where 80 of its
customers reside. The majority of its customers
are large enterprises (more than 10 billion in
revenue), with a high emphasis on the
pharmaceutical and biotech industries, plus
aerospace and defense, food and beverage, and
high tech. Revitas CLM solution is designed to
be CRM- and ERP-agnostic, offering
off-the-shelf, prebuilt integrations for
Salesforce, Oracle and SAP.
SciQuest Based in Morrisville, North Carolina,
with offices in multiple U.S. cities, plus in
Canada (Edmonton) and the U.K., SciQuest is a
cloud- based source-to-settle solution provider.
It was founded in 1995 and is publicly traded
on Nasdaq. Originally targeting higher
education, government and healthcare, SciQuest
has grown rapidly and become industry-agnostic
by virtue of its acquisitions. SciQuest acquired
CLM vendor Upside Software in 2012. Despite its
CLM solution being historically stand-alone and
focused on the buy side and sell side, it is now
more recognized as a module within SciQuests
spend management suite and less frequently
licensed stand-alone.
Ivalua Established in 2000, Ivalua is a provider
of spend management software, with main offices
located in the U.S. and in Europe. As a result,
the Ivalua Buyer contract management solution
focuses heavily on buy-side agreements.
Unusually, Ivalua says that its customers are
licensed primarily on a subscription basis,
despite 40 of customers deploying on-premises,
with 50 in a hosted model. Most of its
customers have revenue exceeding 1 billion,
although it does have customers as small as 50
million in revenue. Ivalua partners with Seal
Software for the discovery phase.
SAP SAP Contract Lifecycle Management is sold
stand-alone or fully integrated to SAPs core
ERP suite. SAP does not disclose the industries
where the solution is used, although banking,
high tech,