No two technology asset classes follow the same path through the market. Some quickly ascend to must-have elements for almost every business, with lots of vendors competing for market share; others remain fairly niche solutions throughout their lifecycles.
That said, nearly all technologies follow a predicable arc, going from emerging, to established, to legacy.
To track this lifecycle for a wide variety of IT solutions, Gartner Research has developed the IT Market Clock, a conceptual model that shows where different technologies are amid these predictable patterns. The clock is meant to inform decisions on whether to adopt a technology, how much value it can deliver, or to retire it and find a new solution. On the 12 hour clock, 1 o'clock means that a technology is just emerging, with just a few early adopters, while 11 o'clock means it's at the end of its life and should be replaced.
CLM Debuts on the Market Clock
As an example of the growing interest in Contract Lifecycle Management (CLM), it appears for the first time in the 2018 IT Market Clock for Procurement and Sourcing Solutions, debuting at 5 o’clock. This puts CLM in the "Choice" category, which indicates the market is in the "early mainstream" phase, seeing more widespread adoption as demand grows.
"Effective contract management is important for the commercial success of any business. CLM adoption is increasing as organizations implement their digital roadmaps and to improve both their workflows and collaboration," writes Desere Edwards, Research Director at Gartner, in the IT Market Clock Report.
Edwards goes on to note the benefits of mature enterprise CLM processes. They include:
- Increased governance and control over what is signed, when and by whom
- The protection of knowing the valid contract terms applicable at any given time
- Deeper insight across all contractual agreements analyzing content and conditions
- The ability to recognize changing supply network contract trends and maximize benefits from negotiations
The reports notes the market is very fragmented with a large number of vendors, with lots of differentiation between them. "There are clear leaders in revenue and capabilities" among CLM vendors, Edwards writes.
What This Means
As always, Gartner has some valuable advice. Edwards suggests current CLM users should "expand CLM adoption as part of an enterprise-wide strategy that considers the interdependence between contracts, business processes and operational/financial results." This insight from Gartner is key and an approach that leading companies are adopting.
For prospective buyers, she advises that companies "develop a multifunctional team"—that is, a team from a wide cross section of an enterprise—to choose a solution. "This approach increases the likelihood of a successful vendor selection and implementation with high user adoption," she writes. She also advises prospective buyers to "prioritize the vendors' growth and financial viability," as the competitive nature of this space has financially stressed some vendors.
If you are looking to gauge the benefits an enterprise contract management CLM solution can deliver for your organization, we here at Icertis have developed a comprehensive toolkit that walks you through the process – from understanding the value of enterprise contract management, to defining the project requirements, to conducting an effective RFP.