Contracts Management Software: How to Choose the Right Solution

Modern organizations face unprecedented challenges in managing their contractual relationships. Poor contract management costs businesses a staggering $2 trillion annually, with the average company sacrificing up to 9% of its total revenue due to inefficient processes. However, a paradigm shift is underway as modern contract management software evolves beyond basic document storage to become a strategic driver of operational efficiency and financial performance.

The evolution of contracts management software

Contract management software has undergone a remarkable transformation in recent years. What began as simple digital repositories has evolved into sophisticated platforms that leverage artificial intelligence to extract valuable insights from agreements. This evolution reflects a fundamental reconceptualization of contracts—no longer viewed as static legal documents, but as dynamic data assets critical to business success.

“Contracts are no longer just static legal documents. They are dynamic, data-rich assets crucial to a company’s financial health,” explains Michael Bearman, Chief Legal & Safety Officer at Vecna Robotics. “The shift toward viewing contracts as strategic tools for driving operational efficiency and smart financial planning has been transformative for our organization.”

This perspective shift is driving rapid market growth. According to Verified Market Research, the global contract management software market was valued at approximately $1.26 billion in 2024 and is projected to reach $3.97 billion by 2031, growing at a CAGR of 16.98% during this period.

Why businesses are prioritizing contract management

The cost of inefficient contract processes

Traditional contract management methods create significant inefficiencies that directly impact the bottom line:

• Organizations with at least 1,000 employees spend between $2.5-$3.5 million annually searching for or recreating lost documents
• The cost of manually creating and managing a single contract ranges from $6,900 for basic agreements to over $49,000 for complex contracts
• Without effective contract management systems, up to 40% of an employee’s time is spent on low-value contract tasks, translating to approximately $2.7 million in lost productivity each year

The transformative impact of modern solutions

Contract management software delivers substantial benefits that address these challenges:

• Contract digitization improves compliance by 55% according to Forrester and Aberdeen research
• Administrative costs decrease by 25-30% with effective contract management software implementation
• Organizations report an 80% faster average cycle time from bid to signed agreement when using contract management software

The rise of agreement intelligence

The next evolution in contract management is “agreement intelligence”—a strategic approach that transforms how organizations extract value from their contracts through AI-powered insights, streamlined workflows, and data-driven decision-making.

AI-powered insights

Artificial intelligence is revolutionizing contract analysis by automating data extraction, identifying risks, and providing deeper insights. While 88% of survey respondents recognize AI’s revolutionary potential in contract management, many acknowledge the need for thoughtful implementation with human oversight.

Julie Delayo, Executive Director for Sponsored Programs, Grants and Contracts at Pima Community College, notes: “It gives us the ability to have those discussions right in the discussion tab. And it sends out emails so everybody stays in the loop.” This transparent communication has eliminated delays caused by fragmented email chains and version control issues, accelerating approval processes and improving grant funding success.

Key AI applications in contract management include:

• Automated data extraction: AI can identify and extract key terms from contracts, saving hundreds of hours of manual data entry
• Clause identification: Systems can automatically identify and classify key clauses, such as termination conditions and payment terms
• Risk assessment: AI evaluates contract risk levels based on predefined criteria and historical data
• Compliance monitoring: Software ensures contracts comply with relevant regulations and internal policies

Streamlined workflows

Modern contract management platforms provide automated workflows that dramatically improve efficiency across the contract lifecycle, from initiation to renewal or termination.

Jenny McMullen, Corporate Contract Administrator at Yates Construction, highlights the impact: “All messages and comments live right inside the agreement. Instead of five separate email chains, we’ve got everything in one place now.” This approach has saved Yates Construction $15,000 per month in reduced administrative overhead—a 25% reduction in contract administration costs.

Contract workflow automation delivers:

• Reduced contract cycle times from weeks to days or even hours
• Improved consistency through standardized templates and processes
• Enhanced collaboration between departments and with external parties
• Decreased manual effort through automated approvals and notifications

Data-driven decisions

Unlocking actionable contract data empowers organizations to make more strategic decisions. According to Deloitte’s Global Chief Procurement Officer Survey, 65% of CPOs believe that contract management software improves risk management by identifying potential issues before they escalate.

Michael Cuschieri, Group Head of Legal at LeoVegas, explains the value: “The custom properties functionality, that’s where Concord really helps us save time. We save about 5 to 10 minutes per contract—and when you’re dealing with hundreds of contracts, those minutes really add up.”

Key benefits of data-driven contract management include:

• Real-time visibility into contract status and performance
• Proactive identification of renewal opportunities and risks
• Enhanced negotiation leverage through historical insights
• Strategic alignment of contracts with business objectives

Implementation strategies for success

Successfully implementing contract management software requires thoughtful planning and execution. Based on extensive research and customer experiences, here are key recommendations for organizations at different stages of contract management maturity:

Phase 1: Quick wins (within 3 months)

1. Conduct a contract inventory audit to identify where contracts are stored, what data is captured, and where inconsistencies exist
2. Implement standardized naming conventions and tagging within your existing system to improve searchability
3. Start tracking key contract metrics such as active contracts, total contract value, and average contract cycle time

Phase 2: Short-term priorities (within 6-12 months)

1. Evaluate and select a CLM solution that prioritizes data accuracy, robust reporting, and integration capabilities
2. Implement automated alerts for key contract dates to prevent missed renewals and deadlines
3. Establish clear guidelines for AI usage within the contract review process, maintaining human oversight

Phase 3: Long-term investments (12+ months)

1. Foster a culture of contract awareness through training and clear role definitions
2. Explore advanced capabilities such as AI-powered risk scoring and predictive analytics
3. Track ROI metrics like contract cycle time reduction, cost savings, and compliance improvement

Industry-specific applications

Higher education

Colleges and universities face unique contract management challenges. A National Association of Educational Procurement study found that the average higher education institution spends $70 million on outside vendors and maintains relationships with 1,230 different vendors.

Contract management software helps higher education institutions:

• Improve budget efficiency by reducing overhead costs and eliminating duplicate vendor relationships
• Ensure regulatory compliance with laws like FERPA and other privacy regulations
• Streamline grant management processes and increase funding success rates
• Protect intellectual property and sensitive information

Healthcare

Healthcare organizations must manage complex regulatory requirements while controlling costs. Contract management software provides:

• Enhanced HIPAA compliance through standardized agreements and security protocols
• Improved vendor relationship management for medical supplies and services
• Streamlined credentialing processes for practitioners and facilities
• Risk mitigation for patient care agreements and insurance contracts

Manufacturing

Manufacturing companies benefit from contract management software through:

• Improved supplier relationship management and performance tracking
• Enhanced visibility into component pricing and warranty terms
• Streamlined compliance with industry standards and regulations
• Optimized production scheduling through better contract insights

ROI calculation framework

Understanding the return on investment from contract management software implementation is crucial for securing buy-in and justifying the expense. Here’s a framework for calculating potential ROI:

ROI Category	Calculation Method	Average Impact
Time Savings	(Hours saved per contract × Average hourly rate × Number of contracts per year)	82% reduction in time spent
Process Efficiency	(Average cycle time reduction × Cost per day of delay × Number of contracts)	80% faster cycle time
Risk Reduction	(Potential cost of non-compliance × Risk reduction percentage)	55% compliance improvement
Administrative Cost Reduction	(Current administrative costs × Expected reduction percentage)	25-30% cost reduction
Revenue Capture	(Value of improved renewal rates × Contract renewal percentage improvement)	56% renewal rate (vs. 25% industry average)

Common implementation challenges and solutions

While the benefits of contract management software are clear, organizations often face challenges during implementation. Understanding these potential roadblocks and their solutions can help ensure success:

Challenge 1: Securing stakeholder buy-in

Research shows that 44% of in-house lawyers cite getting buy-in for process changes as one of their biggest challenges.

Solution: Build a compelling business case highlighting both hard cost savings and soft benefits like improved compliance and reduced risk. Involve stakeholders from all affected departments early in the selection process.

Challenge 2: Integration with existing systems

75% of respondents emphasize that seamless integrations between CLM systems and other core business applications are essential.

Solution: Prioritize contract management solutions with robust API capabilities and pre-built integrations with your existing tech stack. Develop a clear integration strategy with phased implementation.

Challenge 3: Data migration and cleanup

Poor data quality can undermine the effectiveness of a new contract management system and delay value realization.

Solution: Conduct a thorough audit of existing contracts, establish data standards, and implement a phased migration approach. Consider leveraging AI tools to assist with data extraction and categorization.

Challenge 4: User adoption

New systems often face resistance, particularly from legal teams accustomed to traditional processes.

Solution: Provide comprehensive training tailored to different user groups, create champions within each department, and emphasize how the system makes users’ jobs easier rather than more complicated.

Emerging trends in contract management

Looking ahead, several key trends are reshaping the contract management landscape:

1. Generative AI capabilities

Generative AI is transforming how contracts are drafted, analyzed, and managed. According to Gartner, AI is expected to cut manual labor in the contract review process by half in 2024.

Early adopters are already seeing results, with AI outperforming trained lawyers by 10% in accuracy while completing contract reviews in 26 seconds compared to 92 minutes for humans.

2. Blockchain integration

Blockchain technology is enhancing transparency, security, and traceability in contract management processes. The decentralized nature of blockchain ensures tamper-proof records, while smart contracts enable automated, self-executing capabilities that reduce errors and delays.

3. Mobile-first solutions

As work patterns shift toward hybrid models, contract management is adapting with mobile-friendly interfaces. 71% of legal teams now operate in a hybrid model, increasing demand for accessible contract solutions that work across devices.

4. Sustainability and ESG compliance

Environmental, social, and governance (ESG) factors are increasingly reflected in contracts, requiring management systems that can track and report on compliance with sustainability commitments.

Conclusion: The future of contract management

As we look toward 2025 and beyond, contract management is evolving from a tactical, legal-focused function to a strategic driver of business value. By leveraging AI-powered insights, streamlining workflows, and unlocking the value of contract data, organizations can transform their approach to agreements and gain a significant competitive advantage.

The most successful organizations will view contracts not as static documents but as dynamic data assets that inform strategic decision-making. Those that embrace this evolution will not only reduce costs and mitigate risks but also uncover new opportunities for growth and innovation.

Whether you’re just beginning your contract management journey or looking to enhance your existing processes, the time to invest in modern contract management capabilities is now. The potential return—in efficiency, compliance, and financial performance—makes this one of the most impactful investments an organization can make in today’s complex business environment.

Frequently asked questions about contracts management software

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About Concord: Concord empowers growing businesses to make smarter operational decisions by unlocking actionable insights from all their contracts using Agreement Intelligence. Trusted by over 1,500 companies and 1 million users worldwide, Concord enables people to swiftly sign agreements and easily access crucial business data. www.concord.app