Procurement teams now lead or fully own supplier contract lifecycles in 82% of organizations, but struggle to capture negotiated value due to poor execution and tracking, with over half missing contractual remedies and at least 15% of supplier spend occurring off-contract.
- 82% of procurement leaders say procurement now fully owns or leads the supplier contract lifecycle, including 38% with complete ownership
- 52% of organizations failed to collect contractual remedies in the past year because they weren't tracked or triggered in time
- At least 15% of supplier spend flows outside contracted agreements, with 40% reporting off-contract spending between 16-30%
- 81% of organizations shifted more contract ownership toward procurement in the past two years, yet 97% claim confidence in capturing negotiated value
- 81% encounter price discrepancies between invoiced and contracted amounts at least occasionally, with 28% experiencing them frequently
Procurement has taken control of contracting, as organizations struggle to realize negotiated value, according to a study presented by Agiloft.
In fact, 82% of procurement leaders say procurement now fully owns or leads the supplier contract lifecycle before legal involvement is required, and 81% say their organizations have shifted more contract ownership or approval authority toward procurement in just the past two years.
“Procurement teams may be confident they are capturing negotiated value, but when more than half of organizations miss contractual remedies because they are not tracked in time, and when off-contract spend and pricing discrepancies remain this common, the issue is execution quality,” says Jason Barnwell, chief product officer at Agiloft. “The value was agreed to, written down, and then too often lost somewhere between the contract, the purchase order, the invoice, and the systems people actually use to run the business. Teams have more authority and more technology at their disposal, yet significant value is still being left on the table.”
Key takeaways:
· More than half (52%) of organizations failed to collect a contractual remedy in the past year because it was not tracked or triggered in time, while procurement leaders estimate at least 15% of supplier spend is off contract.
· 82% of procurement teams now own or lead contracting before legal involvement is required, including 38% with full ownership and 44% that lead, with legal in a supporting or escalation role.
· 81% have shifted more contract ownership or approval authority toward procurement in the past two years, with 29% describing the shift as significant; just 1% say authority has moved in the opposite direction, toward legal.
· 97% are confident they systematically capture the full value of what was negotiated, even as the data reveals significant leakage after signature.
· 52% failed to collect a contractual remedy in the past year because it was not tracked or triggered in time; among organizations managing 10,001-50,000 active contracts, that rises to 74%.
· Procurement leaders estimate at least 15% of supplier spend flows outside contracted agreements, with 40% putting off-contract spend between 16-30%.
· 81% encounter discrepancies between invoiced and contracted prices at least occasionally, including 28% that experience them frequently or always.
· Only 36% automatically connect sourcing award terms to the resulting contract, while 57% rely on some manual re-entry.
· While 94% use some automated invoice validation against contract terms, only 46% have fully automated the process.
· 82% already have a procurement orchestration tool in place, are evaluating one or have one on their 12-month roadmap; just 2% say they aren't considering one.
