Over the past decade, many organizations have made significant investments in Contract Lifecycle Management (CLM) systems, achieving gains in efficiency, compliance, and document control. Yet despite this investment in contract infrastructure, a critical capability remains underdeveloped
This is Contract Performance Management (CPM), a strategic operational discipline, one that is essential for procurement and finance leaders seeking measurable, repeatable value from supplier agreements.
We are not alone in this observation. Recent research from Deloitte, McKinsey, and Gartner echoes the same underlying message: that the next phase of contracting maturity must move beyond lifecycle management toward performance realization. Deloitte calls this shift "unlocking the value of agreements"; McKinsey emphasizes the need to operationalize commercial levers embedded in contracts; and Gartner's most recent Magic Quadrant for CLM underscores the growing role of AI, analytics, and post-signature obligation tracking in delivering business value. This alignment across industry research reinforces the urgency and opportunity of Contract Performance Management as a core capability.
To better understand how organizations are progressing toward this goal, we recently surveyed 311 professionals in procurement, finance, and operations across North America and Europe. The results highlight an ecosystem where contracts are systematically captured and centrally managed, but performance remains largely unmanaged.
Based on these findings, we developed the Contract Performance Maturity Model (CPMM). This simple four-stage model reflects the realities uncovered in the research and provides a clear path for organizations to evolve from document control to measurable outcome delivery.
1. Contract Management Ends Where It Should Begin
When asked what "contract management" meant in their organizations:
This reinforces a long-standing issue: contracts are often treated as static documents rather than instruments of ongoing commercial value. Without structured performance oversight, negotiated terms risk being ignored post-signature.
2. CLM Tools are Widespread, But Not Sufficient
The proliferation of CLM software hasn't eliminated the reliance on manual processes. The post-signature phase—involving obligations, milestones, KPIs, and supplier accountability—remains fragmented, suggesting that many CLM deployments stop short of enabling performance insights.
3. Performance Metrics are Currently Undervalued
When asked to prioritize contract goals:
Financial impact understandably takes precedence. We recently introduced a Working Capital solution specifically to ensure that contract Performance Management results in cash returned to the business.
However, the underweighting of performance metrics suggests a missed opportunity. KPIs and SLAs are early signals of supplier delivery issues, value leakage, or misalignment, all of which have downstream financial consequences.
4. Supplier Oversight is Incomplete
Without a complete view of the supplier base or contractual obligations, performance cannot be consistently monitored. This lack of visibility undermines commercial governance and makes proactive intervention difficult.
To help organizations move beyond contract visibility toward performance accountability, we developed a simple four-stage contract performance maturity model. It combines our decades of contracting experience with insights from our recent survey.
This model focuses on how organizations manage post-signature performance, rather than pre-signature activity alone. It's built specifically for procurement and finance teams, those closest to value realization, supplier delivery, and commercial risk.
| Stage | Label | Primary Focus | Key Characteristics | Enabling Technologies |
| Ad Hoc | Manual & Unstructured | Contracts as disconnected documents |
|
|
| Foundational | Process Standardization | Laying a foundation for control and compliance |
|
Repository |
| Integrated | Cross-Functional Integration | Lifecycle and performance data integration across functions |
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Integrated CLM platforms, dashboards, APIs |
| Strategic | Performance & Value Management | Contracts as strategic assets driving business value |
|
AI/ML, analytics engines, performance scorecards |
Before performance can be tracked, obligations enforced, or value leakage addressed, organizations must first ensure they have a complete and accurate view of their active contracts. This foundational step, Contract Discovery, is essential, and we’ll be exploring it further in an upcoming blog series that examines how discovery enables confident decision-making, effective supplier management, and performance accountability.
Prior maturity models in contract management—such as the Garrett & Rendon Contract Management Maturity Model (CMMM), CMMI for Acquisition, and the Built Intelligence Framework laid down foundational thinking in standardization, governance, and process maturity. These models were especially useful in regulated or defense-oriented contexts, where documentation, risk control, and policy compliance are paramount.
However, they tend to prioritize pre-signature activities and process efficiency over post-signature performance. Few provide a structure for managing supplier delivery, financial realization, or obligation tracking across complex, global supply bases.
The model we propose addresses that gap by focusing on contract performance as a source of commercial value, integrating with procurement and finance to ensure that what's signed is actually delivered.
We did not design this model as a theoretical framework. Firstly, it aligns directly with the realities uncovered in our survey:
Secondly, it provides a simple language and structure for benchmarking progress, identifying gaps, and building a roadmap towards outcome-driven contract management.
The core conclusion from our research is clear: contract performance is not yet standard practice - it is still a frontier. While most organizations have invested in centralizing and systematizing their contracts through CLM platforms, far fewer have built the capabilities to manage the outcomes those contracts are meant to deliver.
This gap between documentation and delivery represents a material opportunity for procurement and finance leaders. It is an opportunity to redefine the role of contracts, from static legal artefacts to active instruments of commercial performance. Managing contracts post-signature means tracking obligations, enforcing service levels, and ensuring that negotiated terms translate into measurable results.