The renewal of a sales contract provides opportunities to reset prices and to extend and improve the service.
Many procurement contracts roll over, often with inflation rises automatically applied. So companies often miss the chance to renegotiate, aggregate or rationalise these contracts, or to define new, more flexible working relationships with suppliers.
| Real-world examples include cases where equipment maintenance fees are still being paid for equipment already disposed of, and software seat licences still paid after staff were made redundant. Many companies think that if they manage their core contracts then the non-core do not matter. However, the aggregate costs soon mount up. | "Contracts are not reviewed properly-although at least one in four represents a potential opportunity to reduce costs." UK Chemicals Company |