Contract hygiene: The art of properly managing your data
Published March 19, 2025
- Corporate Finance & HR, Risk & Procurement
- Data & AI
There are many reasons to digitize your contracts, but if we had to choose just one, it would be the ability to leverage your contractual data. Data is the true asset of your contracts—make it shine!
Why is your contractual data so valuable?
Your contractual data is valuable because it reflects the mutual commitments between you and your clients or suppliers. Too often, contracts are only reviewed when issues arise, or worse, when a dispute escalates.
However, having easy and regular access to contractual data offers significant advantages. Managing and fulfilling your contractual commitments effectively can generate substantial value. Here are a few real-world examples from our clients:
- Ensuring the proper application of commercial discounts throughout the contract’s duration, especially when they depend on reaching specific thresholds, volumes, or other conditions.
- Verifying compliance with Service Level Agreements (SLAs) and other commitments, such as payment deadlines.
- Executing price adjustment or indexation clauses smoothly and adhering to the scheduled revision dates.
If you are a client or a supplier, this could result in savings or gains worth millions of euros.
This is a matter of professional discipline. Consider personal hygiene: you brush your teeth at least twice a day, not just when someone reminds you. And when you do, you don’t waste time looking for your toothbrush or toothpaste, you know exactly where they are and how to use them.
Applying the same principle to contractual data management is an appealing idea. So why isn’t it as simple?
To unlock the full potential of your contractual data, you must align it with operational data
In most cases, contractual data needs to be cross-referenced with other operational data to deliver its full value. More often than not, challenges arise from operational processes.
On the contractual side, various digitization solutions enable access to the required data.
Take the straightforward example of a discount based on purchase volume. The contractual data includes:
- The thresholds or conditions for the discount
- The applicable rates or prices for each tier
However, this data only becomes valuable if you can link it to the actual amounts spent throughout the contract’s lifecycle. While this may seem obvious, implementation is often complex. It typically requires retrieving relevant data from multiple enterprise information systems.
By adopting a disciplined approach to managing and integrating contractual data, businesses can unlock efficiencies, reduce risk, and maximize value.
7 recommended steps for effective contract data management
To achieve this, consider using a contract management tool. This will enable you to extract new data from your contracts as you identify new use cases.
There are multiple ways to do this:
- If the data consists of contract “metadata” or “attributes,” you likely have automatic access to it.
- If not, you can leverage an artificial intelligence engine for extraction.
Regardless of the method, a contract management tool is essential. Would you have your wisdom teeth removed without anesthesia? Of course not. Similarly, manually extracting contract data would be unnecessarily painful, labor-intensive, and costly.
This platform can be your contract management system, but other alternatives may be suitable depending on your IT architecture.
Alongside Step 1, verify that operational data is readily accessible. Some information may not be immediately available in an enterprise system but instead stored in separate Excel files that are difficult to access. When operational data is available, identify the relevant data points and the information systems within your business applications (sales, procurement, finance, etc.).
Once you have identified the necessary data, extract it from the relevant business application. To maximize efficiency, consider automation from the outset rather than relying solely on manual extraction. Conducting an initial test is useful, but long-term success depends on transforming this process into a routine.
Next, compare your contractual data against operational data to identify any discrepancies.
For each discrepancy, you can implement corrective actions and ensure that both your commitments and those of your clients or suppliers are properly managed. In many cases, these actions can be automated, turning them into a regular and efficient process.
The key to success: Prioritizing analysis and remediation
The ultimate goal of this approach is to spend as much time as possible on the final step—analyzing and understanding discrepancies—so that corrective actions can be taken efficiently and at the right time.
How Wavestone can help
Each of these steps involves multiple dimensions where Wavestone can provide support:
- Organization – Who is responsible for these activities?
- Process – Who does what, and when?
- Tools – Contract management systems, business applications, and IT architecture.
- Project management
- Adapting to new workflows – Both internally and externally with clients or suppliers.
Author
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Franck Levy
Partner – France, Paris
Wavestone
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