Poor contract lifecycle management can take nine per cent off your bottom line

How much does it cost if you can’t secure the agreed discount on a framework agreement? How much do you lose when options aren’t exercised on time? How much does it cost when contracts are not renegotiated? One thing that all Complete Control customers have in common is that they have considered these challenges.

In essence, a contract should be designed precisely to ensure economic values and be an instrument for commercial management and control. But, sometimes the actual contract documents or the way they are managed is less than optimal. Problems with either of the above can result in significant financial losses.

Better design and management of contracts could add nine per cent to your company’s bottom line, according to a global survey of contracts in 12,000 businesses carried out by the International Association for Contract & Commercial Management (IACCM).

IACCM emphasised that nine per cent is the average, across all sectors, company sizes and contract values. They estimated that the bigger and more complex the projects and deliveries regulated by the contracts, the greater the losses. For our part we would like to add that the more subcontractors a company has – and the more business that is outsourced – the greater the potential losses.