Every organization on earth enter into contracts during their life cycle, some frequently and others not so often, and live through the process of executing and managing them. The question arises, that how many of them realistically evaluate the completed contracts entirely to investigate the gains and losses they have encountered in the execution of the contracts and money they could have earned if they had been more careful in formulating and agreeing for the terms of such contracts. On the other hand, how much money they could have saved if they have reviewed and appointed another vendor for those contracts each time without allowing automatic renewals. The answers for both of these questions could be surprisingly a small percentage, and that is the painful truth.
Astonishingly, most of these organizations have dedicated contract management professionals in their cadres though their main duty have been formulating, compiling, monitoring on-going contracts rather than reviewing already executed contracts and learning lessons and rectifying those unworthy clauses for better favourable conditions. They do their work efficiently but less likely to understand impending issues or identify them before they become issues. Unless letting the contracts renewed automatically if some time was spent learning how to negotiate better terms with an established vendor or replaced him with a more competitive one. These organizations would have a substantial amount if their contract professionals employ some time in reviewing executed and on-going contracts to pinpoint less favourable clauses and modify them to save more money for the organizations they work for. This could have been done fairly easily by understanding risk levels and associated costs of each and every term and condition in the contracts and revise or modify them to yield or save better earnings.