More than half of mid-market enterprise organizations don’t have clear, centralized access to contracts, while the other half rely primarily on unreliable solutions such as shared drives, email chains and a smattering of tools that fail to track obligations and deadlines.
According to a survey of 120 procurement and legal professionals from AI agent platform Vallor, nearly 60% of organizations still review contracts by hand, while almost a third of respondents admitted to missing rebates, discounts or obligations because agreements were either difficult to access or poorly tracked. Vallor also cited an analysis from McKinsey, which estimated that poor contract management can erode as much as 9% of annual revenue.
“Contracts are the operating system of procurement, yet they’re still treated like static PDFs,” said Vallor CEO Antonio Gracias in a November 4 release. “When teams can’t see terms and obligations, they can’t enforce them.”
Poor contract management can lead to broad impacts across an organization, Vallor warned. More than half of respondents reported that it can take up to two hours to manually locate and validate a single clause, delaying deals and slowing down the onboarding process for suppliers. Missed incentives and unclaimed rebates can also hit a company’s bottom line, while overlooked regulatory clauses can become “ticking risks” down the line.
Vallor asserted that artificial intelligence can act as an “inflection point” to address these shortfalls, with 20% of organizations reporting extensive use of the technology already, and 33% “actively exploring” AI. In total, 80% of respondents flagged improved contract visibility and automation as either “important” or “critical” priorities within the next 12 months.