Contract management

In most organisations, at least 50% – and in some cases up to 80% – of spend is under contract. But all too often, there is little in the way of formal contract management arrangements, and contracts are filed in multiple locations with no central view.

There are a number of risks with such informal arrangements. It's estimated that up to 75% of the savings achieved by sourcing exercises are lost within the first 18 months without robust contract management arrangements, while off-contract spend goes unchallenged. It also leaves the organisation open to risks of service delivery failure and fails to generate the additional value that comes from strong supplier relationships.