Where savings leak
Five leakage paths account for 91% of lost savings:
- Scope creep on negotiated contracts (28%)
- Reverted pricing on auto-renewals (21%)
- Off-contract maverick buying (19%)
- Volume below committed tier (14%)
- One-off exceptions approved by managers (9%)
The governance pattern that works
The teams that reach 80%+ savings realization run a single monthly meeting we call the 'Savings Reconciliation Review.' Procurement, finance, and category owners sit together for 45 minutes and reconcile, line by line, what was negotiated vs. what was invoiced for the top 20 contracts.
It sounds tedious. It is the highest-ROI meeting on the calendar.
What to automate, what to keep human
Automate the data prep — pulling negotiated rates, invoiced amounts, volume tiers, and renewal dates. Keep the conversation human. Software can flag the variance; only the category owner can explain why scope crept.