(I-BusinessNews.Com, March 16, 2022 ) The Global Contract Analytics Software Market size is forecast to reach $3.4 billion by 2027, growing at a CAGR 15.1% from 2022 to 2027. Increasing software installations within business organizations to streamline contract management process, utilizing advanced technologies such as Artificial Intelligence (AI), Natural Language Processing (NLP) is attributed to the market growth. Contract analysis software tools are mostly used in legal activity, finance and procurement study in order to aid businesses in understanding the implications of contract language. Contract Analytics Software is a part of contract lifecycle management process, (CLM), associated with organizing, managing, monitoring, analysing, as well automating contractual processes within enterprises. Contract Analytics Software is involved in analysing force majeure clauses, as a part of extracting subsequent obligations efficiently. Increasing penetration of AI-enabled project management software and growth in automated General Data Protection Regulation (GDPR) to author stronger agreements, manage regulatory compliance and risk assessment while strengthening counterparty relationships are estimated to foster the market growth of contract analytics software during 2022-2027.
Contract Analytics Software Market Segment Analysis – By Deployment
By deployment model, Contract Analytics Software Market has been segmented into cloud and on-premises. Cloud segment is analyzed to grow with the highest CAGR of 10.6% during the forecast period 2022-2027. As compared to on premise models, cloud based software act as a cost-efficient solution, eliminating requirement of additional infrastructures, attributing to its market growth. Increasing adoption of cloud infrastructure in various business organizations to improve data accessibility from remote locations is also aiding the market growth over time. Cloud deployment enables synchronization of data seamlessly from multiple sources which provides the ability to communicate and transfer data more easily than on premise model. Furthermore, benefits of cloud deployment such as ease of deployment, and pay per usage model are considered to be some of the prime factors boosting its market growth. In August 2021, Hosting Tribunal global reported, enterprises have allocated 30% of the IT budget for cloud computing solution and 66% of enterprises have necessitated the presence of central cloud team or a cloud center of excellence for gaining improved business outcomes. In March 2021, SirionLabs announced a strategic partnership with Fluxym to expand its cloud-based contract lifecycle management platform. Such factors are further set to propel the market growth of cloud contract analytics software in the long run.
Contract Analytics Software Market Segment Analysis – By Industry Vertical
By industry vertical, Contract Analytics Software Market has been segmented into Banking, Financial Services, and Insurance (BFSI), IT and Telecommunications, Healthcare, Transportation & logistics, Manufacturing, Retail & E-Commerce, Government, Media & Entertainment and Others. Healthcare sector dominated the global contract analytics software market with a share of 39% in 2021 and is also anticipated to have a significant growth during 2022-2027. Increasing demand towards gaining real time visibility for business associate agreements in clause level, as a part of meeting regulatory compliance throughout the lifestyle, attributes to the market growth. Moreover, growing scrutiny towards compliance regulations such as HIPAA (Health Insurance Portability and Accountability Act) for the healthcare industry drives the need for well-defined standard operating procedures and along with many other stringent medical regulations, standards or policies have been also aiding its market growth. Contract analytics software assists healthcare organizations in reducing risks while designing a better compliance management framework. In October 2021, Signant Health announced a strategic investment in one of the leading providers of clinical data aggregation and analytics software, Thoughsphere, capable of helping clinical trial sponsors as well as contract resource organizations to take control over the increasing volume and variety of the clinical trial data. Such investments are poised to create significant growth opportunities for the market during 2022-2027.
Contract Analytics Software Market Segment Analysis – By Geography
By geography, Contract Analytics Software Market has been segmented under North America, Europe, APAC, South America and RoW. North America dominated the global contract analytics market with a share of 37% in 2021, owing to factors including well-established IT infrastructure and high investments towards new and upgraded technologies within the region. Increasing adoption of automated AI-based healthcare contract analytics software in U.S., for streamlining entire contract lifecycle is also assisting its market demand in this region. In October 2021, a U.S. based company, InCloudCounsel announced raising US$200 million in a Series B funding with a vision to enhance its automation tool capabilities as a part of efficiently streamlining contract management solution. APAC is analyzed to emerge as the fastest growing region in the global Contract Analytics Software Market with a CAGR of 9.5% during 2022-2027 owing to massive transition towards digitalization and increasing demand for cloud based applications. Growing need for software ensuring regulation compliance as a part of protecting the organization from incurring penalties for non-compliance and mitigating risks associated with the contract is anticipated to assist in Contract Analytics Software market expansion. In July, 2021 Singapore Communications and Information Minister announced that Infocomm Media Development Authority (IMDA) and National Research Foundation Singapore will invest US$50 million over the next five years to develop the city-state’s digital trust capabilities. Such factors are set to drive the market growth for contract analytics software in the coming time.
Contract Analytics Software Market Drivers
Growing inclination towards AI to improve data insights in business organizations are impacting the market growth
Increasing penetration of artificial intelligence among enterprises to utilize sophisticated data analysis technique is the key factor driving the growth of the market. AI powered contract analytics software assists in highlighting essential clauses or data points within a specific contract so that an organization can make much more informed business decisions. The burgeoning demand for using a combination of Optical Character Recognition (OCR) and deep learning algorithms to extract contractual terms, clauses, and provisions, large amounts of data is augmenting the market. Thus, rising popularity among business enterprises to gain valuable insights into business performance for driving profits is catalyzing the market. According to 2019 report of Legal Future, an authoritative legal-industry, more than 37% of renowned organizations have utilized AI for analysis and reviewing of contracts. In July 2020, SirionLabs announced about the launch of an AI driven contract analytics and extraction platform, named SirionAE, capable of delivering higher level of insights at faster speeds as well as 50% of costs. This development was done to digitize legacy contract portfolio as well as gain full visibility of risks, entitlements or obligations from a central dashboard automatically, and is set to fuel the market growth in the long run.
Increasing number of AI-enabled General Data Protection Regulation (GDPR) compliant contracts are driving the market growth forward
Growth in contract AI within GDPR and regulatory mandates due to the rising importance of data privacy and protection is stimulating the market. The process of ensuring contracts with GDPR compliance is one of the most challenging and time-consuming aspects of the new legislation. Huge volumes of contracts need to be reviewed, prioritized, checked and amended for compliance. The rising adoption of technology-enabled GDPR Contract Analysis to ensure contracts comply with all regulatory, technological or financial requirements, on a mass scale by using a combination of machine learning-based automation and human expertise, is analyzed to drive the market growth during the forecast period 2022-2027. For instance, Legal OnRamp uses IBM Watson platform to help legal departments deliver results more efficiently with higher quality and lower cost by leveraging machine learning tools. In June 2021, The European Commission published two sets of new standard contractual clauses (SCCs) governing cross-border data transfers and data exchanges between controllers and processors (i.e., service providers), reflecting requirements of the GDPR more vividly. The new SCCs are done to improve the previous standards as a part of providing greater flexibility for long and complex processing chains, and is set to accelerate the global Contract Analytics Software Market growth in coming years.
High initial costs associated with installation, integration, deployment or maintenance of contract analytics software hinders its market growth
Contract Analytics Software incurs high costs associated with installation, integration, deployment and additional maintenance services owing to its robust infrastructure combined with stringent security policies. Price of Contract Management software for enterprises ranges between US$800 – US$1200 per month. Small enterprises are limiting its adoptability due to its high financial requirement. Traditional legal departments never used to invest in technologies and thus many enterprises are still reluctant to adopt this technology due to limited budget allocation. Such factors have been creating an adverse impact on its market growth.
Contract Analytics Software Market Landscape
Product launches, acquisitions, Partnerships and R&D activities are key strategies adopted by players in the Contract Analytics Software market. Contract Analytics Software top 10 companies include:
Apptus Technologies AB
HighQ Solutions Limited
In August 2021, Cobblestone announced about the launch of European data center, as a part of expanding its product line of contract lifecycle management compliance solutions.
In October 2020, Integreon and SirionLabs announced a strategic partnership towards introducing a cost effective Contract Management solution for enterprises and law firms, capable of transforming contract digitization as well as repapering processes.
In February 2020, DocuSign Inc. announced about the acquisition of Seal Software, a global leader in AI driven contract analytics platform for US$ 188 Million in cash. This acquisition was done to utilize AI tools of Seal Software as a part of fostering DocuSign Contract Lifecycle Management offering.
Cloud deployment is analyzed to witness the highest growth in the global Contract Analytics Software Market during 2022-2027, owing to ease of deployment and pay per usage model.
North America Contract Analytics Software Market held the largest share in 2021, attributing to factors like early adoption of digital platforms and high investments towards advanced technology including AI, machine learning.
Increasing penetration of artificial intelligence in business organizations and growth in contract AI within GDPR and regulatory mandates are analyzed to significantly drive the market during the forecast period 2022-2027.
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