A Guide to Read Gartner® CLM Magic Quadrant™ & Critical Capabilities Reports
- November 13, 2024
- 15 min read
- Sirion
Introduction
Contract Lifecycle Management (CLM) is a critical technology for businesses that want to optimize the way they manage contracts—from creation to execution and renewal. As organizations seek to adopt the right CLM solution, one of the most influential resources they turn to is Gartner Magic Quadrant and Critical Capabilities report for CLM.
This blog will help you navigate these reports and critically assess their key takeaways to make an informed decision when selecting a CLM platform.
Understanding the Magic Quadrant
The 2024 Gartner Magic Quadrant for CLM provides a graphical competitive positioning of four types of technology providers, in markets where growth is high and provider differentiation is distinct:
Leaders execute well against their current vision and are well positioned for tomorrow.
Visionaries understand where the market is going or have a vision for changing market rules, but do not yet execute well.
Niche Players focus successfully on a small segment, or are unfocused and do not out-innovate or outperform others.
Challengers execute well today or may dominate a large segment, but do not demonstrate an understanding of market direction.
Our understanding of key factors covered in the CLM Magic Quadrant:
Ability to Execute: This measures how well the vendor is performing in the market. Gartner evaluates:
- Product or service quality
- Overall viability (financial health)
- Sales execution
- Market responsiveness
- Customer experience
Completeness of Vision: This assesses the vendor’s future potential. It includes:
- Innovation in product offerings
- Understanding of market dynamics and trends
- Sales and marketing strategies
- Development of business models
- Geographic and vertical strategies
What the CLM Critical Capabilities Report Tells You
As an essential companion to the Gartner Magic Quadrant, 2024 CLM Critical Capabilities methodology provides deeper insight into providers’ product and service offerings by extending the Magic Quadrant analysis. Use this research to further investigate product ratings based on key capabilities set to important, differentiating use cases. Some of the most important capabilities include:
- Contract Creation & Authoring: The ease and flexibility of creating contracts using the platform.
- Contract Negotiation & Collaboration: The tools available to facilitate negotiations, collaborate with stakeholders, and manage changes.
- Obligation & Compliance Management: The platform’s ability to track, monitor, and manage contractual obligations and ensure compliance.
- Analytics & Reporting: The depth of analytics the system provides, including contract performance metrics and insights.
- Ease of Integration: How well the platform integrates with other systems such as ERP, CRM, and document management solutions.
- User Experience: Usability, interface design, and the ease of adoption by end-users, both legal and non-legal teams.
How to Critically Read the Reports as a CLM Buyer**
When reading these reports, it’s essential to balance the quantitative rankings with your organization’s unique needs. Here are some steps to critically analyze these reports:
Focus on Your Specific Requirements
Begin by identifying your organization’s most critical use cases. For example:
- Do you need strong compliance management for a highly regulated industry?
- Is scalability a priority as your contract volume grows?
- Do you need robust analytics for insight into contract performance?
Once you know your needs, match those with vendors who score highly in the areas that matter most to you in the Critical Capabilities Report. Don’t focus only on the overall ranking in the Magic Quadrant—companies excelling in areas that may not be your priority could distract you.
Evaluate the Vendor’s Ability to Scale with Your Business
The Magic Quadrant “Ability to Execute” category provides insight into a vendor’s capacity to deliver consistently. However, it’s crucial to look at specific execution factors like customer service, implementation support, and product updates.
Ask questions such as:
- How does the vendor handle onboarding and ongoing support?
- Are they continuously improving their product, or are they stuck in maintenance mode?
Don’t Be Swayed by the “Leaders” Label Alone
While the “Leaders” quadrant represents vendors with strong execution and vision, it doesn’t mean they’re always the best fit for every organization. Depending on your needs, a “Niche Player” or “Visionary” could be the better match.
For instance, a Niche Player may offer a specialized solution that aligns perfectly with your industry or business model, while a Visionary might introduce cutting-edge innovations in AI-powered contract management that could future-proof your operations.
Look Beyond the Graph—Understand the Vendor’s Roadmap
GartnerMagic Quadrant evaluates vendors based on their current standing and the immediate roadmap. However, CLM systems evolve quickly, especially with new trends like AI and automation. When evaluating vendors, consider their commitment to emerging technologies like generative AI, advanced analytics, and integration capabilities.
Ask:
- What innovations are they planning in the next 1-2 years?
- How are they leveraging AI to improve contract management?
Best Practices When Using Gartner’s Reports for CLM Selection
Cross-Reference with Other Sources
Gartner reports are a great resource, but they shouldn’t be the only tool in your evaluation. Look at user reviews, case studies, and other third-party reports such as the IDC MarketScape or Spend Matters SolutionMap. User reviews on platforms like Gartner Peer Insights or G2 provide real-world insights into implementation challenges and customer satisfaction.
Set Up Vendor Demos and Trials
After narrowing down your vendor list based on 202the Magic Quadrant and Critical Capabilities, set up demos and proof-of-concept trials. These hands-on experiences will give you a clearer picture of how the solution will work for your business.
Consult with Internal Stakeholders
CLM systems are often used across multiple departments—legal, sales, procurement, and more. Ensure that key stakeholders are involved in the decision-making process. Their feedback on usability, integration, and specific needs will be invaluable in selecting the right solution.
Pay Attention to Support and Ecosystem
Gartner emphasizes “Ability to Execute,” but support and customer success are often critical to your long-term relationship with a vendor. Investigate the strength of their support infrastructure, partner ecosystem, and user community.
The Bottom Line
The 2024 Gartner Magic Quadrant and Critical Capabilities for CLM reports offer valuable insights into the CLM market, but they’re just one part of the decision-making puzzle. By aligning the reports with your unique business needs, thoroughly evaluating vendor capabilities, and involving all relevant stakeholders, you’ll be well-equipped to choose a CLM solution that supports your organization’s long-term success.
Gartner, Magic Quadrant for Contract Life Cycle Management, Kaitlynn Sommers, Kerrie McDonald, Lynne Phelan, 14 October 2024.
Gartner, Critical Capabilities for Contract Life Cycle Management, Critical Capabilities for Contract Life Cycle Management, 21 October 2024
GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved. Magic Quadrant is a registered trademark of Gartner, Inc. and/or its affiliates and is used herein with permission. All rights reserved.
Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose
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