When it comes to managing supplier relationships, it’s tempting to treat contracts like one-and-done exercises—negotiate the deal, file it away, and move on. But that mindset can cost businesses dearly. I want to talk about two subtle but critical challenges that erode contract value over time: contract creep and contract fatigue.
The Market Never Stands Still
Let’s be clear — contracts don’t work perfectly. They can’t. For all sorts of reasons, from the dynamic nature of markets to the ever-evolving needs of businesses, the reality on the ground constantly shifts. And while clients often see contract management as a tick-box exercise — “project done, move on”—that’s where trouble starts.
Meanwhile, suppliers, and I’ll say this carefully, are always looking for opportunities to drive up their margins—sometimes at the client’s expense. It’s not about being cynical, it’s about being realistic. Suppliers are commercial entities, and if there’s an opening to increase their margins, many will take it. That’s just how the game is played.
Contract Creep vs Contract Fatigue
At ERA Group, we help clients tackle two distinct but related problems through our audit process: contract creep and contract fatigue.
- Contract creep happens when suppliers—or even internal teams—don’t stick to the original, negotiated terms. For example, a stationery supplier might quote for an unbranded product. But when the client tries to reorder, they’re told it’s obsolete or out of stock. Instead, they’re offered an “alternative” that just happens to be significantly more expensive. And rarely does that alternative come with a better price—quite the opposite. The supplier pockets the extra margin, while the client pays more for something they didn’t ask for.
- Contract fatigue, on the other hand, is more passive. It’s what happens when everyone forgets about the contract. It gets ticked off the list and life moves on. But the benefits of that contract? They quietly evaporate. In fact, there are studies suggesting that within three years, only about 40% of the originally negotiated value remains. The decline happens fast—steep in the first year, then tapering off—but by then, 60% of the benefits have slipped through the cracks.
Keeping Control, Delivering Value
That’s where we come in. Our audit process digs deep—into the data, into the contracts, and into the fine print. The goal? To maintain and protect the full value of what was originally negotiated. Whether you call it savings, value for money, or commercial benefit, we ensure it’s fully realised throughout the entire contract lifecycle.
We don’t just negotiate a better deal—we make sure that deal is delivered to its optimum level, consistently and over time. That’s a key differentiator of ERA’s approach.
Mini Tenders: A Proactive Enhancement
Alongside this, my colleague James and I keep an eye on the market. If we spot trends—for example, fluctuations in the lubricants and oils sector—we act. We run what we call mini tenders, carving out parts of a larger contract to re-tender. That way, we can reintroduce competitive tension and often unlock fresh value. It’s a way of enhancing the contract, not letting it fade.
Lời kết
Clients often underestimate just how quickly a contract can lose value. But with the right oversight, tools, and market intelligence, you can keep it sharp. Contract fatigue and creep aren’t inevitable—they’re avoidable. You just have to know where to look, and keep looking.
That’s exactly what we do at ERA Group.
