A £600m problem: Treat the Disease, Not the Sneeze
Some time ago I was approached by the Procurement Department of a large company and asked to look at their procurement contracts.
The company’s yearly spend was about £600m, but its standard form contracts were causing problems: they took too long to close and caused too much friction.
The Procurement Department asked me to quote for producing a new set of contracts. They had made the same request to a number of law firms and were waiting to receive all the responses so they could pick the best offer.
I responded by telling them they were taking the wrong approach.
Before you try to fix a problem, you have to understand the problem. That’s just as true of contract problems as it is of any other type of problem. And one of the elements of fixing a problem is understanding its root causes. Most things experienced as a problem are symptoms of the problem, not the problem itself.
So, I continued, getting a new set of standard form contracts was not the right way to go about it. The first thing to do was to carry out a diagnostic so we could understand what was really going on.
So that’s what we did.
I read through all their standard form templates.
I read through a number of contracts that had been negotiated.
I met up with the members of the Procurement Department and discussed what was causing them, as individuals, problems.
I analysed the levels of spend (ie. how many contracts with TCV of X, how many with TCV of 2X, etc), and which types of purchase represented risks to the company and which didn’t.
I discussed the different workflows that procurement contracts entailed, and the different authorisations and sticking points each produced.
The end result was a report which analysed the problem (not just the symptoms) and set out a number of recommendations: in effect, a roadmap for the future.
Within the roadmap, fixing the contract was just a small part.
Moral: contract stuff never exists in isolation: it always exists in a context. If you don’t understand the context, you can’t fix contract stuff.
27th January 2026