#United States #Redwood City #procurement #contract management #Agiloft

Agiloft's Research Unveils Procurement Value Gap

Agiloft, a leader in data-driven contract lifecycle management (CLM), has released new findings that illustrate a troubling trend within enterprise procurement. According to their recent survey involving 2,005 senior procurement professionals in the U.S. and U.K., many organizations are struggling to capitalize on the value that is negotiated through their contracts. The report, titled "The Confidence Paradox: What Procurement Leaders Reveal About the Gap Between Negotiated and Realized Value," reveals shocking statistics that signal a gap between intention and execution.

Key Findings

Agiloft discovered that while 82% of procurement teams assert that they own or lead the supplier contract lifecycle, a staggering 52% reported failing to collect contractual remedies due to issues with timely tracking and notifications. Furthermore, a notable 15% of supplier expenditures were identified as flowing outside of contracted agreements. This leakage often results in lost value for the organization, where negotiated savings do not materialize into tangible outcomes.

Procurement's Evolving Role

Over the last two years, there has been a significant shift in how procurement teams function within companies. The data highlights that 81% of procurement professionals have seen an increase in their authority over contract ownership or approval processes. Legal departments, traditionally key players in contracting, are increasingly relegated to supporting roles, confirming a transformation in procurement dynamics.

The Challenge of Execution

Despite procurement teams expressing confidence in their abilities to capture negotiated values—97% maintaining they do so systematically—the reality shows a mismatch. Of those surveyed, 52% admitted they failed to secure a remedy within the past year, with 74% of organizations managing 10,001 to 50,000 contracts experiencing similar tracking challenges. There is an evident dichotomy where a firm grasp on negotiation does not translate into effective contract execution.

Discrepancies in Spend Management

The research reveals concerning statistics about spending outside of contractual agreements. Procurement leaders reported that at least 15% of supplier spending occurs off-contract, with some estimating this number could be as high as 30%. Frequent discrepancies between invoiced amounts and contracted prices were acknowledged by 81% of respondents, indicating systemic issues that could hinder financial performance.

Addressing System Disconnects

A significant challenge identified is the lack of integration between different systems used in procurement. Only 36% of procurement teams reported automatic connections between awarded sourcing terms and resulting contracts. Manual data entry remains a crutch for over half of the teams, showcasing the inefficiency in workflows that can lead to wasted resources and missed opportunities. Moreover, while 94% use some form of automated invoice validation, only a slight majority have completely automated this process.

The Path Forward

In line with these revelations, organizations are seeking to bridge the value gap through enhanced technology solutions. Agiloft emphasizes the importance of improved connectivity between contract data and execution systems to realize the value negotiated. Their data-first CLM platform offers a pathway for firms to convert contract data into actionable insights that can enhance procurement workflows.

Upcoming Presentation

Agiloft is set to present these key findings at the 2026 Gartner Procurement Conference, showcasing their next-generation approach to contract management. Senior Product Manager Alisha Ahuja will join Rush Medical’s Procurement Director Christie Savage to discuss practical applications of AI in scaling procurement processes effectively.

Conclusion

As procurement teams take on more responsibilities, understanding the implications of their negotiated agreements remains critical. Agiloft's report serves as a wake-up call for organizations to evaluate how they manage contracts and ensure that the value promised in negotiations is not lost in execution. To download the full report and gain deeper insights, visit Agiloft's website.

For ongoing developments and insights into procurement and contract management, stay tuned as Agiloft continues to lead in this space.