Most procurement teams do a great job negotiating contracts.

But what happens after the contract is signed?

That’s where millions in value quietly leak away.

A Silent Gap in Vendor Management

I rarely hear midsize firms or smaller enterprises talk about post-contract vendor cost management. They have sourcing. They have procurement.

But they don’t have a function responsible for governing costs after the contract is signed.

Larger firms, particularly those with a more built out procurement function, see this differently.

They know that vendor cost governance doesn’t end when the ink dries on the contract.

It’s where the real work begins.

Real-World Example: $10M in Value Leakage

A senior executive at a global firm recently told me:

“We found $10 million in value leakage – not through renegotiation, but by identifying misalignment between what the business needed and what the vendors were still selling us.”

And that’s the whole point.

Cost governance isn’t just about overcharges. It’s about managing what you’re actually buying, and why.

What Post-Contract Cost Governance Looks Like

Most organizations believe “the bill just reflects is the contract.”

It’s not.

The contract is related to the bill, and the bill is affected by the contract that is negotiated. But they are not the same thing or even two sides of a coin.

The bill is an evolving reflection of real business activity by the vendor – and without a structured process to manage it, 10% to 60% of your IT vendor spend can be waste.

Here’s what proper cost governance includes:

✅ An up-to-date inventory of every billing item and service

✅ Regular checks that each charge is:

• Correct (not a billing error)
• Needed (aligned with current business needs)
• Price optimized (priced at the lowest eligible market rates and discounts)

This is a process to reconcile billing data against contract terms as well as business needs and market prices.

Reviews should scheduled throughout the year – not just at contract renewal.

If your team doesn’t have visibility into what’s being billed and why… That alone is a massive red flag. (Write us for a complementary consultation to identify red flags in your process.)

Proper post contract governance of vendor spending entails all of the above steps. Your team should be able to share an up to date inventory and evidence that all costs have been checked for savings opportunities.

Without this thorough process in place, we’ve found up to 60% of complex spends wasted on unneccessary costs.

A Hidden Problem: “Cost Management Tools Without Teams”

One executive told me:

“We didn’t want another tool giving us a task list. We wanted the managed services team that comes with it.”

That comment hit hard, because it’s common.

🟥 Companies often invest in software to track vendors

🟩 But they lack the resources (e.g. time) or expertise to interpret the data, or implement the findings

Services that provide tools and expert staff turn insight into savings, prevent solutions from becoming no ROI shelfware.

Why AI Alone Can’t Save You

There’s a lot of buzz around using AI to manage vendor costs.

And sure, AI has potential – but here’s the reality:

You’re not ready for AI if you don’t have clean, structured, accessible data.

Most companies aren’t suffering from a lack of intelligence – they’re suffering from a lack of input.

Here’s what we see again and again:

🟥 Incomplete data in vendor bills

🟥 Vendor billing data left in the vendors’ portals

🟥 No clean inventory of services

🟥 No visibility into what’s billed vs. what’s used

🟥 No structured mapping from services to business needs

The result?

🚨 Garbage in, garbage out.

There’s No AI Transformation Without Data Maturity

If your systems don’t contain the foundational data, in this example vendor contracts, services mapped to business needs, granular billing data from vendor portals …

Then no amount of AI will fix it.

🔁 If Automation Anywhere or your RPA tools can’t automate the first-level tasks…

💡 Then your AI can’t “learn” from the right examples to drive cost savings.

AI doesn’t solve foundational data problems. It amplifies them.

The Watermelon Effect

Without a true foundation good data and end to end value mapping most organizations fall into what one exec called:

“The watermelon effect.”

📊 Everything looks green on the outside – dashboards, reports, KPIs…

🔥 But it’s bleeding red ink underneath – missed savings, misaligned services, no insight.

Our Approach

That’s why one of our first foundational steps is this:

1. Identify key data sources at the vendor level
2. Extract and standardize service and billing data
3. Transform that into actionable insights for cost governance

This allows decisions to be made with accurate cost insights. Savings opportunities become visible, and we can then implement them for the organization.

Until you have all the foundational visibility, AI is a nice idea – not a practical solution.

Final Thought

Sometimes, executives tell the market they’re going to reduce costs, boost operational efficiency, and reinvest the savings into AI and innovation…..

….but the internal machinery isn’t ready to deliver.

The tools are there, but the team isn’t.

The intent is real, but the execution is missing.

That’s where post-contract cost governance comes in.

📩 If you’d like to learn more about how to manage IT vendor costs after the contract is signed, feel free to reach out and DM or call or email me.

I’m happy to share what’s worked for other firms, and we may have “done-for-you” services that can help too.