Procurement Leaders Lose More Than $1 Million Annually in Unrealized Supplier Commitments, New Icertis Research Finds

Icertis Reveals Impact of Context Gaps, Contract Delays, and Supplier Underperformance at SAP Spend Connect

BELLEVUE, Wash.--(BUSINESS WIRE)--One-third of procurement professionals estimate their business loses more than $1 million annually due to unrealized supplier contract terms, according to new research from AI-native contract intelligence leader, Icertis. The survey of 500 U.S. procurement leaders suggests the function’s biggest challenges stem from a lack of contracting context – and the agility to capture value at scale – pointing to a material impact on company performance for 77 percent of respondents.

Sustained macroeconomic uncertainty and supply chain volatility continue to raise expectations for procurement teams to protect margins, manage risk, and optimize cash flow. Contracts contain critical context, from historical negotiations and concessions to patterns in business behavior, that can have a direct impact on the bottom line through their influence on decision making. The survey findings reveal that shortfalls in contextual visibility and post-signature oversight continue to prevent organizations from realizing the full potential of their supplier relationships.

According to the survey, three primary drivers of value loss exist across the contract lifecycle:

• Procurement lacks complete visibility into supplier context. Nearly 80 percent of procurement leaders enter supplier negotiations without all the information they would ideally want, and an equal percentage have discovered information after a supplier decision that would have changed their approach – such as a pattern of late shipments or a history of accepting certain provisions. At the same time, 40 percent already allow AI to negotiate supplier terms within defined parameters, and more than 60 percent trust AI with contracts valued at $1 million or more. As AI assumes a greater role in procurement, access to complete contract data and the business context surrounding it is increasingly essential to make informed sourcing decisions.
• Organizations struggle to respond quickly during disruption. 62 percent say contract delays affect their ability to procure goods and services on time – an acute pain point in periods of volatility. While most procurement leaders (92 percent) believe they can identify supplier exposure within 24 hours of a major disruption, the challenge lies in executing contract changes at scale before risk and financial impact escalate.
• Supplier commitments are lost in execution. Within the past year, nearly 60 percent learned they were paying suppliers more than contractually required, and 72 percent uncovered supplier underperformance only after it had already affected the business. Enterprises can reduce value leakage and turn negotiated savings into realized outcomes by leveraging contract intelligence to govern commitments, surface risk, and pinpoint opportunity across their contract portfolio.

“Procurement teams have been negotiating and protecting margins without a complete understanding of their supplier relationships. Businesses can no longer afford to work with these blind spots – in sourcing, contracting, and managing obligations – especially as every supplier decision carries significant financial consequences,” said Bernadette Bulacan, Chief Evangelist, Icertis. “As AI takes on a bigger role in sourcing and supplier management, companies need contract intelligence that provides this context across their entire supply chain. Icertis delivers by connecting contract data with the context that lives in governance, historical decisions, and patterns so teams can negotiate more effectively and ensure expected outcomes are realized throughout the full supplier lifecycle.”

Icertis delivers the AI-native contract intelligence layer that connects agreements, data, and systems – giving procurement teams the clarity and control they need to capture more value from their commercial relationships. Powered by Vera and built on millions of contracts, Icertis delivers unmatched precision through a deep understanding of the business and industry context surrounding every supplier agreement.

Read the full report to learn more.

About Icertis

Icertis is the AI-native platform that turns contracts into measurable business impact. At the platform’s core is Vera – the complete contract AI layer that understands business and industry context – connecting agreements, data, and systems to power the autonomous enterprise with contract intelligence.