--- title: Closing the Procurement Value Gap description: This report in collaboration with Ironclad highlights how smarter contracting can prevent 11% value loss. image: https://info.worldcc.com/hubfs/ANZ%20Public%20Sector%20cover.png --- # World Commerce & Contracting [![WorldCC-logo-white-hrz](https://info.worldcc.com/hs-fs/hubfs/WorldCC-logo-white-hrz.png?width=244&height=50&name=WorldCC-logo-white-hrz.png "WorldCC-logo-white-hrz")](https://www.worldcc.com/) ## Closing the procurement value gap ### How smarter contracting can prevent 11% value leakage [![Already a member? 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WorldCC research reveals that organizations lose an average of 11% of contract value, and the gap is widening relative to suppliers. This report examines where value is lost, why traditional procurement approaches are insufficient, and how organizations can reverse the trend.** The evidence points to an overall lack of coherence in how the contracting lifecycle is managed. Value leakage happens after signature, in how organizations translate contracts into behavior, governance, and relationships. However, the gaps are not confined to any one phase of the acquisition process. They reflect an enterprise-wide failure to structure and manage contracts as living commercial relationships rather than static documents. Procurement and Legal, as traditionally configured, contribute to these gaps rather than closing them. Their tendency to focus on pre-award activity means the functions that might be expected to provide commercial expertise frequently exit at precisely the moment when that expertise is most needed. Closing the value gap requires not just better procurement, but a fundamental rethinking of accountability for contract outcomes. # Closing the Procurement Value Gap [![Already a member? 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Understanding where value is lost enables organizations to prioritize interventions and calculate their own exposure.   **Sources of value leakage broken down across categories** *Based on WorldCC research and practitioner interviews* ![Figure-02](https://info.worldcc.com/hs-fs/hubfs/Figure-02.png?width=2000&height=1809&name=Figure-02.png "Figure-02") # Key takeaways **The "post-signature" exit:** Value leakage happens after signature because Procurement and Legal, the functions with commercial expertise, frequently exit at the moment they are most needed. **The 11% cumulative loss:** The 11% loss is not a single leak but an accumulation of failures, including missed savings, unmanaged clauses, and unauthorized changes. Most organizations do not formally track this. **Risk allocation is not risk management:** Piling on risk clauses in templates does not manage risk; it simply determines who pays when things go wrong, often resulting in higher price premiums and "operationally hollow" contracts. **Foundational maturity failures:** The most severe gaps are "clarity of responsibilities" and "process maturity." These are enterprise-wide failures, not just procurement-specific ones. **Static contracts in volatile markets:**  traditional fixed-price, rigid contracts create an "illusion of control" and fail to provide the adaptability needed for today’s shifting trade dynamics and input costs. **The "human interface" in an AI world:** While AI has massive potential for obligation tracking, it is only 80% correct without context. Human judgment and "contextual understanding" remain the critical safeguard against leakage. # Conclusion **The strategic level steps needed to plug the gap and avoid continued value leakage:** ![Graphic-03-2](https://info.worldcc.com/hs-fs/hubfs/Graphic-03-2.png?width=804&name=Graphic-03-2.png "Graphic-03-2") The answer is not simply ‘better procurement’. Procurement, as traditionally configured, cannot close the gap because its primary mandate ends where the gap begins, at signature. Closing the value gap requires organizations to follow the steps outlined in the 'Organizational check-list to close the value gap'. Market conditions have contributed to the increase in value leakage, and this trend will continue without deliberate action. Organizations that modernize their contracting approach, moving from template-driven control to adaptive governance, smarter digital workflows, and proactive performance management, will not only stem the leakage but turn contract management into a source of competitive advantage. **Organizational check-list of actions to close the value gap:** ![Figure-05](https://info.worldcc.com/hs-fs/hubfs/Figure-05.png?width=1021&name=Figure-05.png "Figure-05") # Closing the Procurement Value Gap [![Already a member? Access the report here](https://no-cache.hubspot.com/cta/default/23488298/interactive-203935441280.png)](https://info.worldcc.com/hs/cta/wi/redirect?encryptedPayload=AVxigLLjJI4wAlQVgREYIvjM%2FvpcoMwkICriN4%2FJ1b3TRH9iAFiof7E2e%2BB2%2BvmisaxndISmNvjHG4Daqkc9wCMg%2Bk6GGtpjOp7aT3wVIdHhuqmdDcHEmh8hYsXmxVQwJ%2FXFrL%2Fr9dnjIDQz9OK%2F9XeISkSjFke5hUkPk1lcsnhwvPsTu%2BkTm71P5ymvlubnWBSROHfcVL2jqCJM79TuAFdRjxDEPsPtBt5iMXbRK0mCVDfHCIvfln6gYZKazX%2F%2F66FP8qHQjNrIxEv3IJ5sBNlbTVyI33B%2B%2FO8NCJjUCNG1d3tQAfSVpbuy9o1St8SlGLLLdy0o&webInteractiveContentId=203935441280&portalId=23488298&hsLang=en) [![Webinar recording](https://no-cache.hubspot.com/cta/default/23488298/interactive-204779135244.png)](https://info.worldcc.com/hs/cta/wi/redirect?encryptedPayload=AVxigLKxLBNG%2BQ%2BdDOwTpqHWijpfp9NzjbnCwF0xpYbKFe%2FtCyStlsZHvd%2BjQbeMDIzCVv7Vvi3dG5dYlCXM1YOaVbaTuyvlOoQqLUAx5zIY584BRK2WpOyn0C0HOIwWf3wMITYEpp7SS8HTUicDfcN7sRzr4pxHlhVttkpK1E9Ky0wae5n8Tlv9PUlEWyZBO7dDMVEHuda7T97l6NIZHeIeiz8vW9bFV0qWwo22Cc6ilSagxwglBI6Tl7dO3W%2BxZHfDjojRbusxo7TAFszjoPRpJ5HgmB7ERAYbEdjs2LBrTiRjOCh%2BLw9qbMfjFlw9TT80zWSa%2BrkB&webInteractiveContentId=204779135244&portalId=23488298&hsLang=en) # Written by ### Tim Cummins [Follow me on LinkedIn](https://www.linkedin.com/in/tim-cummins-62248a/) President WorldCC ![Tim Cummins - WorldCC](https://info.worldcc.com/hubfs/Tim%20Cummins%20-%20WorldCC.jpg) Tim Cummins President WorldCC About Tim Cummins An international, cross-industry career that has moved from corporate management to extensive research, advisory and capability development services to public, private and third sector organisations. Tim has lived and worked in the UK, France (3 years), and the United States (20 years), building an impressive research and entrepreneurial record with a demonstrated commitment to delivering social benefit. As Founder and President of World Commerce & Contracting (formerly International Association for Contract & Commercial Management), Tim has built a 72,000-member worldwide non-profit association which increasingly influences commercial policies and contracting practices in major corporations and governments. In September 2019, he was presented with the Financial Times ‘Market Shaper of the Year Award. Tim was, until recently, Professor and Chair of International Commercial & Contract Management at the University of Leeds, School of Law, where he taught and led the development of inter-disciplinary commercial programs. Prior to founding World Commerce & Contracting, Tim was on the Chairman’s staff at IBM Corporation and led the development of worldwide commercial processes and skills. His early career included management roles in the banking, automotive and aerospace industries, where he led negotiations up to $1.5 billion in value. He has served in advisory roles for government departments in various countries, including the US, UK, Australia, Canada, and Japan. [LinkedIn](https://www.linkedin.com/in/tim-cummins-62248a/) ### Dan Springer Chief Executive Officer Ironclad ![Dan Springer](https://info.worldcc.com/hubfs/19481.png) Dan Springer Chief Executive Officer Ironclad About Dan Springer ### Sunita Verma Chief Technology Officer Ironclad ![Sunita Verma](https://info.worldcc.com/hubfs/19482.png) Sunita Verma Chief Technology Officer Ironclad About Sunita Verma # Resources We have a whole host of resources to help you on your journey to Commercial and contracting excellence. ![Presentation - CMS Roadshow](https://info.worldcc.com/hs-fs/hubfs/Presentation%20-%20CMS%20Roadshow.png?width=1920&height=1080&name=Presentation%20-%20CMS%20Roadshow.png "Presentation - CMS Roadshow") **Contract Management Standard (CMS)™** The Benchmark Report 2025 highlights a lack of consistency and accountability in contracting. The CMS is the globally recognized, definitive framework that provides a common language and a structured view of the contract lifecycle (pre-award, award, and post-award) required to drive consistency and achieve better outcomes. [Download the Standard](https://www.worldcc.com/Research/CCM-Institute/Contract-Management-Standard) ![Benchmark 2025 - mockup](https://info.worldcc.com/hs-fs/hubfs/Benchmark%202025%20-%20mockup.png?width=800&height=450&name=Benchmark%202025%20-%20mockup.png "Benchmark 2025 - mockup") **Latest Research** Curious about the shifting landscape of contracting? Dive into our latest research. Get cutting-edge insights on current trends, innovations, and the practical implications for commercial and contract management, examining both today's applications and tomorrow's possibilities. [Latest Research](https://www.worldcc.com/Research/Latest-Research) ![benchmark\_cover](https://info.worldcc.com/hs-fs/hubfs/benchmark_cover.png?width=1128&height=635&name=benchmark_cover.png "benchmark_cover") **Capability Maturity Analysis (CMA) and Benchmark** The Benchmark 2025 report is an aggregate analysis. The individual CMA is the practical tool for organizations to take the next step: gaining a fact-based view of their own current performance against industry norms and world-class standards. The report identifies a growing performance gap; the CMA helps an organization see exactly where it stands. [Find out more](https://www.worldcc.com/Research/Capability-Maturity-Analysis-Benchmark) ![Article](https://info.worldcc.com/hs-fs/hubfs/Canva%20images/Article.jpg?width=800&height=450&name=Article.jpg "Article") **Articles** Our Content Hub boasts an extensive collection of AI articles, delving into the transformative impact on contracting and commerce. As leaders in the field, we offer valuable insights and thought-provoking content, illuminating AI's revolutionary potential in the contracting landscape.  [Explore the Content hub](https://www.worldcc.com/Resources/Content-Hub?categoryIds=10&keyword=AI&) ![Copy of Brochure - Commercial & Contract Management Associate Program and Certification](https://info.worldcc.com/hs-fs/hubfs/Copy%20of%20Brochure%20-%20Commercial%20%26%20Contract%20Management%20Associate%20Program%20and%20Certification.png?width=1920&height=1080&name=Copy%20of%20Brochure%20-%20Commercial%20%26%20Contract%20Management%20Associate%20Program%20and%20Certification.png "Copy of Brochure - Commercial & Contract Management Associate Program and Certification") **CCM Associate Program & Certification** The report notes misalignment in priorities, where organizations want strategic relevance but de-prioritize talent development. The CCM Associate program addresses the need to develop a foundational skillset aligned with the CMS, making it an ideal first step for upskilling teams to manage the complexity and uncertainty highlighted in report. [Learn more and enroll](https://www.worldcc.com/Learn/Online-Professional-Development/Commercial-Contract-Management-Associate-Program) ![webinar-1](https://info.worldcc.com/hs-fs/hubfs/Research/AI%20enabled%20CCM/webinar-1.png?width=800&height=450&name=webinar-1.png "webinar-1") **Events** Join us for a variety of in-person and online events, from dynamic weekly thought leadership webinars and digital takeovers to our regional member meetings. Don't miss the chance to connect with the global community at one of our essential global annual summits. 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