April 2007 IACCM survey shows data from 400+ companies representing almost $7 trillion in sales revenue

EDMONTON, ALBERTA, CANADA — Upside Software, the global leader in Contract Lifecycle Management software, is pleased to work in concert with IACCM (International Association for Contract & Commercial Management) to release the results of this new and exciting survey on the need for contract management software across organizations globally.

Tim Cummins, CEO & Executive Director of the International Association For Contract & Commercial Management states: “This survey is great news for anyone who cares about contract management. Whether the focus is governance or competitive advantage, we now have clear evidence that organizations with contract management software do better. Upside customers are among the key beneficiaries of this growing international trend".

Recently, Upside Software announced a partnership with EchoSign to offer an integrated e-signature solution that allows Upside customers to further streamline their contract lifecycle and add further reductions in the cycle time. Prior to the e-signature solution, Upside customers have typically realized a savings of 40% in cycle time and with the e-signature integration, it is estimated to top 50% in cycle time savings. 

“This contract lifecycle management vendor (Upside Software) announced a partnership to integrate EchoSign’s web-based electronic signature service with its contract management service. EchoSign provides Web 2.0 signature capabilities called E-Signature. The partnership is designed for users to sign contracts instantly, greatly reducing the cycle time of a signed and complete contract. With collaborative contract management applications, the average contract cycle time for negotiation and signature is 20 days. With e-signature capabilities, we expect at least three days to fall off that cycle time. While Upside Software continues to grow and be one of the leaders in contract management, it will be interesting to watch other competitors counter to offset this impressive technology partnership,” added Mickey North Rizza of AMR Research.

The demand for contract management software is increasing rapidly and Upside Software has about 200 customers as well is one of the only profitable pure-play providers in the market. Upside presently wins 8 out of every 10 deals that arise from a structured sourcing process (e.g. RFP, RFI, etc.). Vishal Patel of the Aberdeen Group says, “Upside continues to gain traction in various industries with an impressive list of customers, including 3M, NCR, HP, John Deere, JC Penny, Anheuser-Busch and others. Over the last five years, Upside has shown significant growth in both revenue and profit, which have grown by over 400%. In total, Upside Software has about 200 customers with approximately 500,000 users managing well over $500 billion in contracts.”

Upside Software CEO, Ashif Mawji indicates, “The IACCM survey is in sync with our findings in terms of the strong demand for contract & commitment lifecycle management software and we are honored to be respected as a leader in this market. Our track record of proven deployments around the world with over 200 customers from diverse industries demonstrates the strength of our product and our talented team.” He added, “We are proud to work with IACCM in strengthening the overall contract & commitment management market and praise IACCM for all its hard work and dedication to bringing excellence to the discipline of contract management.”

IACCM April 2007 Survey Results

The IACCM Market Sizing Survey for Contract Management Software attracted input from more than 400 corporations, together representing almost $7 trillion in sales revenue. 

This survey was undertaken at the request of many members who wished to understand whether the market has real momentum and whether adoption rates are increasing.

Based on the extensive input received, it is clear that the market is indeed gaining strength. Some highlights:

• The top industries planning to implement are Technology / Software, Oil & Gas, Banking / Insurance / Finance, Electronics, Aerospace and Services. 
  

• Momentum is picking up in the EMEA region and there are early indications of growth in Asia-Pacific. European volume could equal the US by second half of 2008. 
  

• While the implementation drive to date has been among larger companies and remains strongly weighted to this segment in the next few months, the survey suggests there will be strong growth in adoption by companies in the $500m - $1bn range in the next 18 months.

IACCM was not attempting to identify market-leading providers through this survey. We work closely with our members and the vendor community to understand the options available and the best fit for individual circumstances. We also have extensive data on the benefits that are achieved through contract automation. IACCM members are welcome to contact us for advice in these areas at any time.

Note: For purposes of analysis and reporting, we eliminated data from sources that could not be validated (e.g. anonymous input, input from individuals or from companies that are consultants or providers of related products / services)

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Determining the potential market for Contract Management Software

The survey captured information relating to expenditure on dedicated contract management applications (i.e. not ERP or spend management modules, or document management systems). It also sought input regarding the priorities for such applications, in terms of functionality, benefits and the group / function driving the acquisition.

We have now completed analysis of the data for North America, resulting in a market sizing forecast for 2007/8 of US$301million (with margin of error calculated at +/-10%). This is the total expected expenditure on Contract Management licensing, service and maintenance fees. It does not include internal expenditure. This number is somewhat higher than many analyst forecasts and suggests that there is now real momentum in the market, supported by the fact that 32% of respondents declare themselves to be either in the acquisition process or planning to acquire within the next 18 months.

Why might this data be more reliable than other forecasts?
There are three reasons. 

1. The size of the survey sample.

2. The focused nature of the study - we looked only at contract management applications. 

3. The ability to reach the professional community driving these projects, which are often low in visibility and priority for the IT community or other typical survey respondents.

What Are Organizations Planning To Implement - And Why?

The top priority is a contract repository, followed by a contract creation / drafting tool and internal distribution capability (version control, traceability). These fundamental attributes suggest that the focus for most organizations at this point is to establish control. And this impression is confirmed by the ranking of motivations for implementing a system:

1. To put a standard contract process in place 

2. To increase organizational efficiency and reduce cycle time 

3. To manage contract performance / compliance 

4. To ensure compliance with laws and regulations

Many of the metrics that can be extracted from an automated process to drive streamlined performance are a by-product rather than a goal of implementation. Similarly, cost reductions do not rank high in the decision process - and understandably so, since the undeveloped nature of most current processes severely limits the ability to calculate savings. 

User empowerment also comes relatively low on the list of drivers - but in many cases because this will feature in later phases of roll-out. It means that initial implementations are generally for quite limited user groups - the average is for around 100 core users and approximately 60 casual users. The median for contract volume is in the 1,000 - 5,000 range - but over 20% of those planning to implement will input 10,000+ agreements.

Overall, the survey reveals conservative planning; it is to be hoped that this does not reflect a lack of longer-term vision regarding the contribution that automation can bring to both workload and functional value.

Which Functions, Types Of Contracts Will Be Covered?

Procurement-based implementations continue to outnumber sell-side implementations by about 3-to-1. But a significant finding is that the largest single number of implementations are planned to cover both buy and sell contracts - and a high proportion intend this to cover all forms of agreement, including 'non-monetary' contracting. This appears to be a significant shift in historic market experience. 

Another important finding is that the Contract Management organization is a driver in nearly 45% of the acquisition decisions / implementations. Procurement is the next major driver. While Legal features much lower in the total survey results, analysis of current or imminent acquisitions suggests a significant role, with the law department recorded as the driver in almost 35% of decisions. Of course, this does not necessarily reflect the source of sponsorship; all indications suggest that Contract Management - at least in the US - does not generally have the power and influence needed to drive these decisions without a strong sponsor, typically in Legal or Finance.

For More Information about the survey

If you require further insights or information regarding these results, please do not hesitate to contact Tim Cummins (tcummins@iaccm.com) or Katherine Kawamoto (kkawamoto@iaccm.com)

About Upside Software Inc.

Upside Software is the worldwide leader in Contract Lifecycle Management (CLM) solutions. Customers around the globe use UpsideContract and other integrated business solutions to confidently perform Contract Management, Sourcing & Procurement, and Invoice & Billing Management activities throughout their organizations. Upside Software’s products address the needs of Enterprise (e.g. Fortune 500, Global 2000), Public sector (Federal, State/Provincial, Municipal and Health Care), and Small & Medium Enterprise (SME) customers. Customers realize significant cost savings while improving customer and supplier relationships. Upside Software’s solutions are deployed in as little as 3 days and typically provide a full return-on-investment (ROI) in under a year. Founded in 2000, Upside Software is a profitable, growing company with an advanced, yet mature, and comprehensive product suite. The company has extensive experience delivering real value to customers of every size and in most industry verticals. Upside Software is headquartered in Edmonton, Alberta, Canada – for more information visit the company’s website at http://www.upsidesoft.com/

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