Risky Business: Contracts and the loss of value

What makes a contract risky – and what are the causes of value loss?

You might think the answers to these two questions would be the same, but it seems they are not. At least, that’s what the input to World Commerce & Contracting’s survey on contract value erosion is telling us. In fact, the picture is quite complicated:

• Buyers and suppliers have different views about why value loss occurs.
• Different industries have different views about the factors that make a contract risky.
• There are multiple views on which types of contract represent the greatest source of risk and value erosion.

Making sense of this data will provide us with far greater insight to the ways buyers and suppliers might work together to reduce risk and secure value. To date, over 200 organizations have submitted data, with a further 30 engaging in detailed interviews. In early November, participants will receive an exclusive report helping them to better evaluate their exposure to risk and loss – and how they might improve the situation.

The survey remains open for further input and can be accessed here.