The need for provider & contract management
Having the right partners and contracts is good, but not enough to realize the full potential in IT sourcing. During the contract period, the potential of the contract is often not realized and may even lose value. The term contract value leakage refers to the difference between the potential value of an agreement and the value actually realized. Such leakages may occur when the contract basis is not optimal or during execution due to lack of understanding of the contract content and inability to execute terms. As modern contract constructs, particularly in the IT environment, become more complex and encompass a broader range of end-to-end capabilities, it is important for organizations to establish internal provider and contract management capabilities.