The lack of adequate contract visibility can lead to annual contract leakage of 2 to 3 percent.
If you happen to be a large company as all in the fortune 500 are, this number is enormous.
The reality is that most of the information in a contract is not language one needs to be concerned with unless there is some form of break down in the relationship, product or services deliverables. There are however some fields that we want to know about such as expiration dates, escalator language, written notice dates, milestone attainment and service levels to name a few. Most of this data can be referred to as Meta data or essentially data about data. These data represent the information companies should be aware of in order to reduce their exposure to leakage and evergreening.
After many pages of definitions and legalese, most contracts can be broken down into the following areas.
1. Mutual Consent
2. Offer and Acceptance
3. Mutual Consideration
4. Performance or Delivery
5. Good Faith
6. No Violation of Public Policy
Contract management does not have to be a difficult process. Contact SafeSourcing if you’d like to begin to bring your contracts under smart management with SafeContract™ which includes the development of your Meta data tables.
We look forward to and appreciate your comments.