Published on September 18, 2026<\/p>\n<\/div>
More than ten million dollars.<\/b><\/p>\n
A global pharmaceutical company discovered this much "value leakage" when it systematically compared invoices with the agreed contract terms. The company used an AI-based tool for this purpose. According to McKinsey, the proof of concept was developed within just four weeks. Subsequently, supplier negotiations were initiated to recover the lost value.McKinsey & Company<\/a>)<\/p>\n What impressed me about this example was not so much the technology, but the sheer scale. This is precisely one of the challenges that is easily underestimated in contract management.<\/b><\/p>\n<\/div><\/div><\/div><\/div><\/div> In my professional life, I have negotiated and managed very large contracts, particularly in the IT and outsourcing sectors. For example, at a major German bank, I was responsible for the operational and strategic management of an IT outsourcing project with a contract volume exceeding \u20ac120 million. At an insurance group, the contract volume was over \u20ac300 million.<\/p>\n At such scales, a great deal of energy is rightly invested in negotiation. Prices, services, service levels, liability, contract durations, and adjustment mechanisms must be clearly defined.<\/p>\n But eventually, it will be signed.<\/p>\n The project team is disbanding. The negotiators are moving on to the next task. In day-to-day operations, other people continue working with the supplier.<\/p>\n The true value of the contract will only be determined now.<\/b><\/p>\n<\/div><\/div><\/div> What's written in the contract and what actually happens in everyday life are not always the same.<\/p>\n An agreed-upon price scale is not fully applied. A discount is not claimed. A service level is not met without the intended consequences being taken. Benchmarking or renegotiation rights remain unused.<\/p>\n And the cause is not always with the supplier.<\/b><\/p>\n The company itself can also contribute to this: quantities are not bundled as planned, services are ordered outside of agreed processes, or forecasts are not delivered.<\/p>\n<\/div> This can lead to a loss of economic value, even though the relevant regulations are already included in the contract.<\/b><\/p>\n<\/div> For me, this is one of the crucial questions in strategic contract management. But rather: Who ensures that the company actually receives what was agreed upon over the entire term?<\/b><\/p>\n Depending on the contract, this could involve purchasing, a specialist department, finance, IT, or a dedicated contract management team. The crucial factor is not so much the organizational solution itself, but rather clear accountability.<\/p>\n For me, active contract management therefore primarily means regularly comparing three things:<\/p>\n That's precisely why I find the aforementioned pharmaceutical case so interesting.<\/p>\n Technology now makes it possible to systematically compare large quantities of contract terms, orders and invoices \u2013 an effort that would be almost impossible to manage manually.<\/p>\n This opens up new possibilities for detecting value leakage early.<\/b><\/p>\n McKinsey describes this approach as part of a development in which leading purchasing organizations are increasingly considering value creation across the entire source-to-pay process \u2013 and not just looking at the commercial terms at the time of contract signing.<\/p>\n But technology alone will not solve the problem. Not every deviation is automatically a mistake. A contract may run for years. Services, quantities, or general conditions can change.<\/p>\n Good contract management therefore means more than just monitoring compliance with a contract. It also means recognizing in time when adjustments need to be made.<\/b><\/p>\n Therefore, I would regularly ask three simple questions:<\/p>\n If a company cannot reliably answer these three questions, I would take a closer look at the contract. But because there might be value in it that no one is realizing.<\/b><\/p>\n<\/div><\/div><\/div> A signed contract is not yet an economic outcome. It initially describes what two parties have agreed upon for the future.<\/p>\n Whether the expected value actually results from this depends on the outcome. The negotiation determines the potential. \ud83d\udc49<\/b> <\/b>Learn more about how Emarticon negotiates large and complex contracts and strategically manages them throughout their lifespan:
\nBecause the terms were stipulated in the contracts. Nevertheless, the agreed value apparently did not reach the company in full.<\/p>\nThe real work begins after the signature.<\/h3><\/div><\/div><\/div>
![](\"https:\/\/emarticon.de\/wp-content\/uploads\/15-Impuls-Foto.png\")
<\/span>Contract and reality can drift apart.<\/h3><\/div>
Who bears the responsibility after the signature.<\/h3><\/div>
\nI don't mean: Who manages the contract? Who monitors the notice period? Who is formally designated as the responsible party?<\/p>\n\n
AI can make deviations visible<\/h3><\/div>
\nIt can make a deviation visible. What follows from that remains a management decision.<\/b><\/p>\n\n
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\nNot necessarily because he's bad.<\/p>\nA contract is a promise about a future outcome.<\/h3><\/div>
\nTherefore, for me, contract management is not contract administration.<\/p>\n<\/div>
\nContract management ensures that this becomes reality.<\/b><\/p>\n<\/div>
\n\u2192 Contract management at Emarticon<\/a><\/p>\n<\/div><\/div><\/div><\/div><\/div>