Contract Compliance: How to Capture the Savings You Have Already Negotiated
Most procurement teams spend weeks negotiating large framework agreements — and then forget to measure whether the agreements actually get used. The result? The negotiated discounts are never fully realised. The Hackett Group find that buying outside approved supplier agreements costs 10–50 % of the negotiated savings, and that 5–16 % of targeted savings is lost to it. How much is left on your table depends on how much of your volume actually runs on contract — a figure few organisations measure.
In this article we explain what contract compliance is, why it's procurement's biggest missed gain, and how Vieri makes it measurable and automatic.
Key takeaways
- • Contract compliance = share of procurement done on negotiated agreements
- • Cross-industry average: 59.5% (Hackett) — most organisations do not know their own figure
- • World-class sits near 75% — that is where the bar is
- • Hackett: off-contract buying costs 10–50 % of what was negotiated
What is contract compliance really?
Contract compliance measures how much of your procurement actually goes through negotiated framework agreements. It's one of procurement's most important KPIs — and one of the most commonly ignored.
Contract compliance = (On-contract purchases / Total purchases in category) × 100
The opposite is «maverick buying» — purchases outside contracts — which typically costs 2-5% extra on price, plus huge amounts of administrative time.
How big is the hidden savings?
Example: an organisation with a €10M annual procurement budget, 30% strategic categories, 70% non-strategic. On the strategic categories — €3M — a 12% discount has been negotiated. Full capture would be €360K; what is actually realised is the share that runs on contract. The average and world-class levels below are Hackett's figures for contract compliance, not ours.
| Scenario | Compliance | Realised savings |
|---|---|---|
| Unmeasured | ~50% | €180K |
| Market average | 59.5% | €215K |
| World-class level | ~75% | €270K |
Five measures to increase contract compliance
1. Measure it! Without a baseline you can't measure progress. Vieri shows compliance in real time.
2. Make it easy to buy right. Vieri shows contract products first in search results.
3. Automatic approval on contract purchases. Reward correct behaviour.
4. Monthly report to leaders. Visibility creates competition.
5. Use data in the next negotiation. Show suppliers exact volume they got.
How Vieri automates contract compliance
- Real-time dashboard showing compliance per category, department and supplier
- Automatic alerts when compliance drops below thresholds
- Catalogue integration showing contract products with clear price advantage
- Approval rules that add friction to maverick buying
- Monthly reports automatically to leaders
- Negotiation data ready for export
💡 Did you know?
The goal is to move contract compliance upward and be able to evidence it. What that move is worth to you depends on volume and category mix — we work it out with your own figures in a demo, not with an average.
Capture the contract savings sitting in the drawer
Book a 30-minute demo and see how Vieri measures, shows and increases contract compliance automatically.
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