The Hidden Cost of Missing Contracts – What You Need to Know

Introduction

If you work in procurement, you’re probably being asked to do more than ever before. Strategic supplier management, ESG reporting, risk analysis, performance tracking, savings delivery. All of these depend on one thing that often gets taken for granted: having access to all relevant contracts currently in force.

And yet, many procurement teams aren’t confident that is the case. 

Despite years of investment in CLM systems and document repositories, contract landscapes remain incomplete. In most organisations, contracts are still scattered across shared drives, inboxes, desktops and legacy systems. Often, there’s no clear view of which contracts are in force, which have expired, or what’s missing entirely. 

The result isn’t just administrative frustration. It represents real operational cost. 

Understanding the Problem

There is considerable discussion about contract value and contract value leakage today. However, contracts only have value if they can be located, read, and utilised. 

When agreements are missing or incomplete, procurement teams lose the ability to manage what they’ve agreed to. This becomes apparent in several ways:

• Suppliers auto-renew when they should have been re-bid.
• Performance issues go unchecked because there’s no access to obligations.
• Renegotiation windows pass quietly because nobody had visibility of term dates.
• Key clauses affecting pricing, liability or service levels are unknown or outdated. 

None of these happen because someone made a bad decision. They occur because the decision-makers lacked the necessary information at the time. 

CLM isn't the Whole Answer

Many organizations assume their CLM system represents a single source of contract truth. However, this assumes that every contract was created within that system. In reality, many agreements are created outside the formal system(s), especially in organisations with distributed teams, or those that have undergone mergers and acquisitions.  

Some contracts are generated through Word templates or PDF forms. Others are signed via email or e-signature tools and never uploaded. And when employees leave, contracts sometimes go with them, stored in laptops that get wiped.

CLM tools are excellent at managing what’s been captured. But they can’t manage what hasn’t. 

Why it Matters for Procurement

Procurement teams are measured by outcomes. Cost savings, risk reduction, supplier performance, policy compliance. Each of these relies on knowing what was actually agreed. 

When contract visibility is incomplete, procurement is forced to work with assumptions. Supplier relationships are more challenging to govern, opportunities are harder to identify, and risks are easier to overlook. 

The impacts are wide-ranging. Teams can’t be certain they’re fulfilling obligations if they can’t see what was agreed. 

Opportunities for negotiated savings, such as bulk discounts, may never be realised, simply because the terms weren’t known. It’s also much harder to manage vendors effectively. Procurement teams need to understand who has been contracted for what, whether there are restrictions on usage, and whether clauses such as Most Favoured Nation or geographic limitations apply. These details can affect everything from pricing to risk. 

Even routine supplier management becomes strained. Quarterly business reviews, which depend on a clear view of obligations and performance, become difficult to run when key agreements are missing or incomplete. 

And when change comes, whether through supply shocks, regulatory updates, or shifting business priorities, the ability to respond depends on knowing exactly what your commitments are. Without visibility into the whole contract landscape, procurement is left reacting slowly, without the data to act with confidence. 

Addressing the Problem

At Digital Mirror, we believe that Contract Discovery is a foundational step, a necessary foundational step to contract performance. Before performance can be tracked, obligations can be monitored, or value leakage can be checked, there needs to be confidence that the contracts in scope are the correct ones and that they represent the full picture. 

This is where Contract Discovery comes in, not just as a one-time exercise, but as a regular piece of work that makes sense of the contract landscape. 

That’s why we’ve built a Contract Discovery engine focused on surfacing the contracts organisations don’t realise they’re missing. It works across contract repositories, such as file shares, using metadata extraction and version ranking to identify what’s likely to be a current contract and what’s not. It doesn’t replace your CLM; it complements it by ensuring the inputs are complete and you get the visibility you need to deliver value.

A Word on Discovery

We’ll cover the details of Contract Discovery in more detail in our next blog, but locating the contract files themselves is only the start. The next step is to identify the linkages to other files, uncover the relationships between different files, and extract the crucial information and metadata contained within them.   

This supports and provides a bridge to analytics, enabling the system to provide answers to specific questions posed by users and utilising the extracted information and linkages.  

A Practical Step Forward

If you’re in procurement and wondering how to move forward, the first question to ask isn’t about systems. It’s about confidence. 

Do you have confidence that every supplier contract currently in force can be located, reviewed and validated? 

If the answer is no, then addressing that visibility gap may be one of the most valuable things you can do this year. 

We can help you take the first step.