-- A new joint report from World Commerce & Contracting (WorldCC) and Ironclad finds that organizations lose an average of 11% of total contract value after agreements are signed, a phenomenon described as “post-signature value leakage.” The research shows that for large enterprises with approximately $500 million in annual contracted spend, this represents potential losses of up to $55 million per year.
The findings are published in the report Closing the Procurement Value Gap: How Smarter Contracting Can Prevent 11% Value Leakage, which examines how value is lost during the post-award phase of the contracting lifecycle. The study focuses on how contracts are implemented, governed, and managed once agreements move from negotiation into operational delivery.
According to the report, value leakage occurs through a combination of operational and structural issues, including unauthorized scope changes, missed or incorrect price adjustments, untracked performance obligations, and innovation commitments that are negotiated but not activated. These issues accumulate across contract portfolios and result in significant financial impact over time.
A central factor identified in the research is the “handover gap,” which refers to the transition point where procurement and legal teams exit after contract signature, while operational teams assume responsibility without full commercial context or clear accountability for managing contractual commitments. The report finds that this disconnect contributes to poor visibility of obligations, missed opportunities to realize negotiated benefits, and limited oversight of supplier performance.
“The research shows that the 11% value gap is not caused by poor negotiation, but by how contracts are managed after signature,” said Tim Cummins, President of WorldCC. “The findings highlight the importance of treating contracts as ongoing commercial assets rather than static documents.”
The report also identifies the most severe capability gaps contributing to value leakage as process maturity and clarity of responsibilities, followed by weaknesses in governance, operating models, and capability development. These gaps are described as enterprise-wide challenges that extend beyond procurement and legal functions.
WorldCC and Ironclad estimate that organizations that modernize their contracting practices can recover between 2% and 3% of total spend in the first year, and up to 5% to 10% over three years, depending on contract complexity and management maturity. For high-spend organizations, this equates to potential recovery of $25 million to $50 million over time.
Dan Springer, Chief Executive Officer of Ironclad, said the findings demonstrate the importance of post-award contract visibility. “Most organizations already have significant value embedded in their contracts, but they lack the systems to track and manage that value consistently. Contract lifecycle management technology provides a way to monitor obligations, performance, and outcomes throughout the life of an agreement.”
The report outlines recommendations for reducing value leakage, including redesigning contracting operating models, strengthening post-award governance, improving cross-functional accountability, adopting the Contract Management Standard™, and deploying integrated contract lifecycle management (CLM) systems supported by artificial intelligence.
The study is based on WorldCC research, practitioner interviews, and benchmarking data from the Commerce & Contract Management Institute (CCM Institute). It forms part of a broader research program focused on improving commercial performance, governance, and contract management practices across industries.
The full report, Closing the Procurement Value Gap: How Smarter Contracting Can Prevent 11% Value Leakage, is available at:
https://info.worldcc.com/closing-the-procurement-value-gap
About World Commerce & Contracting (WorldCC)
World Commerce & Contracting is a not-for-profit global membership association dedicated to helping organizations achieve high-performing and trusted trading relationships. With more than 75,000 members from over 20,000 organizations across 180 countries, WorldCC supports professionals involved in commercial and contract management through research, certification, standards development, education, and events. The association focuses on improving the quality and integrity of trading relationships worldwide.
About Ironclad
Ironclad is a contract lifecycle management platform that helps organizations manage contracts from creation through execution and renewal. The platform provides tools for contract automation, obligation tracking, and performance monitoring, enabling legal, procurement, and business teams to manage agreements more efficiently. Ironclad is used by global enterprises across multiple industries to support contract governance and operational visibility.
Contact Info:
Name: Kate Hodgins
Email: Send Email
Organization: Commerce & Contract Management Institute
Website: https://ccm.institute/
Release ID: 89182773
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