When supplier contracts are actively managed, they can deliver far more than just baseline value. That was the focus of a recent CIPS Download webinar featuring PRGX and the John Lewis Partnership, where speakers explored how contract compliance, auditing, and AI tools are helping organizations recover lost margin, improve supplier relationships, and build stronger negotiation positions.

Key Takeaways from the Webinar:

• Contract compliance is about performance, not just enforcing terms.
• Auditing contracts before renegotiation reveals hidden value.
• AI tools can accelerate analysis and highlight risk areas.
• Internal buy-in is essential to scale compliance efforts.
• Missed discounts, vague clauses, and scope creep are common—and fixable.

Compliance Isn’t Just About Checking Boxes

Allan Bolam, Senior Manager of Audit Operations at PRGX, opened with a simple but effective analogy: contracts are like cars. They may appear to be running fine, but unless someone lifts the bonnet and inspects the engine, there’s no way to know if they’re performing as intended.

Bolam’s team routinely finds issues that go unnoticed for years—missed discounts, incorrect rates, and charges that fall outside agreed terms. These aren’t isolated cases. They’re common across industries and categories, and they add up quickly.

“Contracts are designed to protect margin,” Bolam said. “But if they’re not actively monitored, they can do the opposite.”

He emphasized that compliance isn’t just about recovering money—it’s about understanding how contracts are actually functioning, identifying inefficiencies, and using that insight to improve future agreements.

From Tactical to Strategic: The John Lewis Journey

Keith Rosser, Contract Manager at John Lewis Partnership, shared how his team has evolved its approach to contract compliance. With thousands of contracts and a limited number of contract managers, the challenge was clear: how do you ensure performance across such a large portfolio?

Rosser explained that the turning point came when they started small—with a proof of concept—and used early results to build internal support. Now, they’ve scaled up to multiple waves of audits and are seeing measurable improvements.

“We’ve had contract managers come to us asking for support,” Rosser said. “That’s a good sign. It means the value is being recognized across the business.”

He also stressed that contract compliance is really about contract performance. By understanding how contracts are actually working, his team can renegotiate with confidence and improve future terms. In some cases, they’ve uncovered misapplied management fees or rebate structures that weren’t being followed—issues that can’t always be fixed retroactively, but can absolutely be addressed going forward.

AI’s Role in Scaling Compliance

Amit Dingare, Chief AI Officer at PRGX, introduced “Contract Insights,” a tool designed to help teams analyze large volumes of contracts quickly and accurately. The tool uses AI to extract clauses, identify missing terms, and track how contract language evolves over time.

One of the key benefits is its ability to prioritize which contracts to audit—not just based on spend, but on risk indicators like pricing models and clause complexity.

“Spend alone doesn’t tell the whole story,” Dingare explained. “A contract with cost-plus pricing and vague terms might pose more risk than a high-spend contract with fixed pricing.”

The tool also helps teams build a hierarchy of contract documents, making it easier to understand which version of a clause was active at any given time. This is especially useful when reviewing performance against invoices or preparing for renegotiation.

Making Compliance Continuous

The speakers agreed that contract compliance shouldn’t be a one-off exercise. It’s most effective when built into regular review cycles, especially for high-value or complex supplier relationships.

Bolam outlined a few practical steps for improving compliance:

• Use clear, unambiguous language in contracts.
• Define financial mechanics with examples.
• Store contracts in secure, accessible repositories.
• Schedule regular reviews and track KPIs.
• Engage suppliers proactively to maintain alignment.

Rosser added that timing matters. “The best time to audit is before renegotiation,” he said. “But if you’ve never done it, the best time is now.”

Additional Thoughts

Contract compliance is often overlooked, but it’s one of the most direct ways procurement teams can protect margin and improve supplier relationships. Whether it’s through manual audits, AI-powered tools, or a combination of both, the goal is the same: make sure contracts deliver what they’re supposed to—and use that insight to drive better outcomes in the future.

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