You’re Killing your Savings and Value with Poor Contract Management

Contracts Are Losing in Procurement

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TL:DR

The article discusses the importance of contract management in preventing value erosion and lost savings. Many organisations prioritise the sourcing phase of the procurement lifecycle, but contracts are often neglected. However, the contract lifecycle must be understood and aligned with the business strategy and policy to prevent value leakage. Capturing and analysing contract data is crucial for identifying blockers in the process and budgeting. The article also emphasises the need for a data-first approach to improve the contract process.

To improve contracting and prevent value leakage, it is important to understand the contract lifecycle and have clear roles and responsibilities at every stage. The article highlights the importance of aligning with the business strategy and policy in risk, budgeting, and sustainability.

Contract data is another key component of successful contract management. Data points such as contract clauses, dates, values, ownership, and communication with suppliers and colleagues can provide valuable insights for improving the contract process and preventing value erosion.

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