Contract Lifecycle Management (CLM) Software Space in 2020

Contract Lifecycle Management space is evolving at a rapid pace. Both the number of providers as well as the overall spend on contract lifecycle management has increased significantly over the past few years. A space that has traditionally been championed by the likes of SAP Ariba and IBM Emptoris is now being redefined by a new generation of technology companies who have taken a fresh outlook and are breathing in new life to CLM technology.

These new generation providers have given a tough competition to the existing leaders and have made their mark by consistently by quickly acquiring noteworthy market share coupled with significant startup financing. 

Here's what the CLM space looks like in 2020. 

Disclaimer: Please note that the below categorization is not a comparative listing and is simply an independent perspective on the CLM space based on various parameters.

The Undisputed Leaders 

This comprises of contract lifecycle management vendors that are frequently cited as the top providers with strong CLM capabilities and noticeable market share in various independent research reports.

• Apttus
• Agiloft
• DocuSign (SpringCM)
• Exari (Coupa)
• Icertis

Leaders of Tomorrow

Providers that are frequently recognized for their strong CLM capabilities and proven ability to deliver strong value for their clients. 

• Conga (Apttus)
• GEP
• SirionLabs

The Deep-Rooted Chiefs

Providers with significant market share, influential customer relationships, service delivery capabilities, support structure, and/or unique capabilities that enable them to hold a strong place. 

• Exigent
• Legal Suite CLM
• Oracle Contract Management
• SAP Ariba
• Seal (Docusign)

The Challengers

Providers with strong capabilities, demonstrated strength, noteworthy clients, and top of the mind recall in CLM space. Some of them offer CLM capabilities as part of the bigger software suites (

• CLM Matrix (Wolter Kluwer's)
• CobbleStone
• Concord
• Coupa
• Determine (Concentric)
• Ivalua
• Jaggaer Contracts+
• Symfact
• SynerTrade
• Zycus

Emerging Players

CLM vendors that have started to make their mark in this space, or have been present for sometime but aren't necessarily the most cited ones. One or more of these providers may have higher market share or revenues than players cites in some of the previous categories.

• Brightleaf Solutions
• Corridor Contracts 365
• Contract Express
• ContractRoom
• ContractPodAi
• ContractSafe
• Contract Wrangler
• Gatekeeper
• Ironclad
• Kira Systems
• Medius (Wax Digital)
• Onit
• OpenWindows
• OptimusBT
• Outlaw
• Ultria
• Volody

Icertis, HighRadius, AppDirect and AvidXchange featured in the 2020 Forbes Cloud 100 List

Forbes recently released the fifth annual listing of world's 100 top private Cloud companies. The list, accessible here, takes into account various factors such as growth, sales, valuation, and culture, as well as a reputation score that's derived in consultation with 43 CEO judges and executives from their public-cloud-company peers. 

The listing comprises a diverse set of cloud companies from various sectors such as Enterprise AI, sales enablement, sales engagement, data management, analytics, payments, security and risk management, customer communications, and more.

Fig. Forbes 2020 Cloud 100 List

Several companies from Contract Management, Source to Pay, Procure to Pay, and related fields have been featured in this list in the past. Examples include Coupa which now is publicly listed and Apttus which acquired Conga and subsequently branded itself as Conga. It is noticeable that both Apttus and Conga were ISV partners of Salesforce.

This year too some of the leading companies from CLM, procurement, accounts payable and related fields have been featured in the list.

• AvidXchange - Featured at 42nd place in the list, AvidXchange is the industry leader in automating invoice and payment processes for mid-market companies. It was founded in the year 2000, and processes over $140 billion transactions annually across its network of more than 600,000 suppliers.

• Icertis - Featured for the second time, Icertis is the only contract management company that's found a place in this list. More than 900 employees out of a total of about 1250+ of Icertis employees are based in India (Pune and Mumbai).

• High Radius - HighRadius is a Fintech enterprise Software-as-a-Service (SaaS) company that leverages Artificial Intelligence-based Autonomous Systems to help companies automate Accounts Receivable and Treasury processes. The company is headquartered in Houston, Texas with a significant presence in Hyderabad, India for product, engineering, and product marketing operations.

• AppDirect - AppDirect offers a subscription commerce platform that removes the complexity of building a recurring business model. Key investors of AppDirect include StarVest Partners, J.P.Morgan, Foundry Group, and Mithril.

Coupa's acquisition of Spend360: Implications for Procurement and Sourcing Technology

Earlier this week, Nasdaq listed, Coupa Software (COUP) announced its acquisition of the U.K. based spend analysis specialist Spend360 which has large global companies such as HSBC, BBC Worldwide, Nissan, and BAE Systems as its clients.

As per the official press release on Coupa's website, the acquisition is aimed at enabling effective classification of spend data by leveraging modern and innovative technologies. Currently, this is done using rule-based classification processes with frequent manual intervention to ensure accuracy.

A closer look at Spend360

At a high level, the key services/solutions provided by Spend360 include:

• Spend Analysis
• Data Cleansing
• Due Diligence, and 
• Supplier Compliance

In combination, Spend360 specializes in enabling organizations of all sizes to collect, enrich, and classify spend data accurately and in turn drive savings to the bottom line by leveraging the generated insights.

An average multi-national tends to have 60 percent of its spend under management i.e. visible spend. More than 20 percent of this spend is often categorized incorrectly. These inaccuracies lead to leakage in the form of duplicate invoicing, high invoice processing costs, erroneous supplier classification/consolidation, ineffective procurement resource utilization, etc. The existing outdated procurement platforms, and legacy IT systems make it difficult to identify and eliminate these issues.

Spend360 eliminates such issues by directly sourcing data from multiple source systems such as ERP and P2P, and applying artificial intelligence to automatically classify the data correctly. The intermediate quality assurance (with some human intervention - as per information available in some of the presentations online), and automated learning capability which makes the automated classification progressively leads to 15 to 20 percent of savings over a period of time. The improved classification also has a positive impact on downstream activities such as auctions, inventory management, and supplier relationship and risk management.

Some Key Insights

• Spend360, as per the information available on its website, has more than 70 billion pounds spend under analysis. 
• For security purposes, the data never leaves the UK.
• Gartner Magic Quadrant for Strategic Sourcing Application Suites mentioned that Scanmarket
  outsources spend cleansing and data enhancement services to London-based Spend360.
•  Spend360 was ranked #1 in a recent report on procurement intelligence by Capgemini, and was recognized amongst the top 5 spend analysis vendors across the world by Gartner

Implications for Procurement and Sourcing Technology Market

This is the 5th acquisition made by Coupa over a period of two years. Earlier in Feb 2015, Coupa acquired enterprise procurement software company ZenPurchase, followed by e-invoicing vendor InvoiceSmash, open booking vendor TripScanner, and the modern contract management vendor Contractually.

Fig. Coupa's Share Prices over the Past 3 Months

While all of the earlier acquisitions have their own role to play in strengthening the overall Coupa offering, contract management and spend analysis capabilities can be a big differentiator from a Source-to-Pay and/or Procure-to-Pay perspective. Coupa's acquisition of Spend360, while it may seem like overlapping/redundant to some, is like a major contract lifecycle management company acquiring a nice contract discovery company like Seal Software. In both scenarios, your ability to achieve the ROI from your technology investments is significantly amplified by the richness of information available in your system.

In the light of the fact that Spend360 has 400+ global clients, about a 100 in North America alone, it clearly seems like two high growth companies merging together. If nothing it should enable Coupa to give some boost to its share prices which have fallen significantly since its IPO in October last year.

The success however will lie in leveraging the complimentary strengths and being able to overcome the ground level issues of difference in culture, approach, and technology stacks.

10 Key Contract Management Stats

1. As per IACCM research, "Poor Contract Management Costs Companies 9% — Bottom Line"

2. Most of the large organizations have anywhere between 20,000 to 40,000 contracts on an average [Source: Price Waterhouse Coopers]

3. 65% of major projects 'fail' or severely under-perform, with average cost overrun of 80%. [Source: 2013 study by the European Commission]

4. On an average more than 10 percent of all executed contracts are lost due to file-and-forget tendency.

5. As per Gartner, Contract Lifecycle Management (CLM) has the potential to become USD 2.8 bn+ solution market in the U.S. alone.

6.  Ineffective governance of provider contracts can cause value leakage ranging from 17% to 40%. [Source: KPMG Research]

7. As per an EY report, an organization can save anywhere between 5 to 15 percent of contract spend by creating commercially efficient contracts and managing them effectively throughout the operation lifecycle and minimizing the waste in business activities with suppliers.

8. Top performing organizations have an average cycle time of 8 days for contract review and approval as against laggards which tend to have an average cycle time of 47 days. [Source: Aberdeen Group]

9. 60 percent of corporate litigation are related to contract disputes. [Source: Unknown]

10. Despite all of the above, less than 20 percent procurement departments currently deploy an automated, digital contract authoring tool. The number is higher for contract repository installations and as per various estimations stands anywhere between 40 to 50 percent. However, the adoption of technology for contract enforcement is less than 10 percent.

Tradeshift, Coupa, and Icertis in Glassdoor's '50 Highest Rated Private Cloud Companies to Work For'

Battery Ventures and Glassdoor recently released a list of '50 Highest Rated Private Cloud Companies to work for'. The list, accessible here, features companies which have received top review rating (4.5+) on Glassdoor from their employees. All these companies have a strong B2B focus and are disrupting the space they operate in through innovative products and solutions.

What's interesting is the median amount of funding received by these 50 companies is 96+ million, and the majority 60% of these companies are headquartered in California. Further, all these companies have been rated very high by the employees in terms of 'Positive Business Outlook' and 'Approve of CEO'.

"50 Highest Rated Private Cloud Companies to Work for"

We think this list is a great indicator that many of these companies are going to be exceedingly successful in coming years because employees are the best judge of a company's growth potential given that they know the company and its culture inside out.

Why we chose to talk about it is because as many as 5 companies which relate to contract management, document management, and supplier management, and broader procurement and sourcing technology domain have been features in this list. This represent 10 percent of the total number of companies featured on this list. Here, are is brief list of these companies:

1. Tradeshift - The upcoming procure-to-pay and spend analytics company which completed a USD 75 million Series D round has been featured on the list at 20th place with an overall rating of 4.5.

2. Docusign - Headquartered in San Francisco, Docusign while not necessarily a procurement and sourcing technology company, has had a significant positive impact on contract management and document management space and is the preferred e-signature integration partner for most CLM vendors. Sitting at 24th place on the '50 Highest Rated Private Cloud Companies to Work For' list, the company deserves a mention.

3. Work Market - The Freelance Management System and Workforce Solutions provider which positions itself as an integrated platform for managing the entire lifecycle of your freelancers and independent professionals, sits at 32nd position with an overall rating of 4.3. The freelance management and contingent workforce management software market has traditionally been dominated by players like Beeline, PeopleFluent, FieldGlass, etc. is sure evolve in some interesting ways in near future.

4. Coupa - Sitting right next to 'Work Market' at 33rd place, Coupa has been revolutionizing the procure-to-pay space for quite some time now. Having acquired Contractually - one of the noticeable contract management software providers, the company is already on the the way to further strengthening its product offering. There already are rumours in the market that Coupa is headed for an IPO in near future. If we have to pick one player from these five that is worth keeping an eye on for procurement and sourcing technology professionals, Coupa clearly stands out.

5. Icertis - Featured recently as a leader in Forrester's CLM wave, Icertis is now one of main players in the Contract Lifecycle Management space. Sitting at 45th position in this list, the company was in news earlier this year for closing a USD 15 million Series - B round.

We are pleasantly surprised to see 5 companies from our space to have been features on this list and look forward to more such refreshing news in the coming time.