The Risks and Consequences of Poor Contract Management [Infographic]

February 18, 2020 |

We often get asked what the return on investment or ROI of contract management is. It makes sense. Those who are considering a contract management solution want to understand how quickly they can recoup their initial investment. However, while ROI can be a very valuable way to measure the success of one-time capital expenditures, contract management doesn't fall into that category. Contract management is the gift that keeps on giving. In fact, we like to redirect that type of question and ask a much more meaningful one: "How much is bad contract management costing you right now?" The truth is that the consequences of poor contract management are quite high and rising all the time. You will probably be surprised by just how much poor contracting practices can erode your company's financial health. We put together this helpful infographic (click the infographic to download and enlarge) with metrics from around the industry that identifies three of the biggest risks of poor contract management that will bleed you dry.

The price of a contract

According to IACCM, the average cost of a low-risk contract from authoring to signature is $6,900 and that number has increased 38% over the past 6 years. The cost of a high risk contract comes in at a staggering $49,000 per contract.

Lost annual revenue

Poorly managed contracts are expensive, but they also erode annual income. An WCC study indicates that an average of 9.2% of annual revenue is lost due to contracting pitfalls, like slow negotiations and missed milestones. The percentage is even higher, up to 15%, for larger organizations.

Missing contracts

A whopping 71% of companies are unable to find 10% or more of their contracts as reported by the Journal of Contract Management. Lost contracts can be very costly due to penalties, missed renewals, and other revenue-impacting governance.

Poorly managed contracts don't just lead to inefficiency and risk. They are also costly in terms of time, revenue, and missed opportunities. Malbek Contrax™ helps to improve your contracting efficiency and save you time and money. All those benefits are combined with a consumer-style user experience requiring no technical expertise. That's contract management reimagined.

Becky Holloway

Published on February 18, 2020

Becky Holloway began her marketing career in the world of consumer packaged goods when digital marketing was still in its infancy and social media was all about MySpace (remember them?), but she got her start in tech by answering a Craigslist ad for a marketing position at a brand new start-up in Philadelphia, which completely changed the course of her career. Since then, she has worked with numerous companies in technology, finance, and healthcare, helping to shape and develop them into robust, demand-generating machines that drive revenue growth. From content writing and educating to campaign creation, product launch, and business development, Becky is a student of the craft of marketing. She is trained and certified in Pragmatic Marketing’s methodology, which seeks to focus on market-driven problem solving to shape go-to-market strategy. She is also a firm believer that marketing gets a bad rep because too often its practitioners rely on gut instinct instead of on hard data. Marketing is both art and science, and, where the two meet, the magic happens. Outside of marketing, Becky has a serious case of wanderlust and travels as much as she can with her husband. Her crazy, blended, "Brady Bunch" family including five children keeps her very busy, but when time permits she is an avid birding enthusiast, gardener, knitter, and piano player. She is a former board member of the Honors College Alumni Association at Rutgers University-Camden, and, in quiet moments when inspiration strikes, she writes to soothe her soul.