Why contract management is indispensable for public organisations

Contract management is about more than just document retention. It is about the complete process: from collecting supplier data and recording agreements, to actively monitoring renewals and performance. "For government organisations, this is extra important. Think of legislation such as the Procurement Act, internal control requirements and accountability to boards and regulators," said Dirk Jan Leppers,  Product Manager at ISPnext.

In many public organisations, there is no central and structured system for contract management. Contracts are scattered across personal network drives, email inboxes or even paper archives. This leads to common problems such as:

• Unplanned automatic renewals: Contracts are renewed automatically without reassessing the terms or necessity.
• Incomplete financial documentation: Obligations are not properly recorded, creating risks in budgeting and audits.
• Difficult-to-find accountability information: Essential information for audits or board reports is not readily available.
• Loss of knowledge: When employees leave, valuable knowledge about ongoing agreements is lost.

This fragmentation increases the likelihood of legal issues, financial losses, and reputational damage. As Dirk Jan Leppers states: “Without central storage, there is no clear overview: who made which agreements, when does a contract expire, what are the financial obligations?”

In addition, gathering contract information for audits or subsidy applications often requires extensive manual effort, leading to higher workloads and inefficiency. Without a centralised, digitised, and well-categorised system, there is a risk of missing critical deadlines, contractual obligations or policy objectives.

In many organisations, contract management remains underexposed for years, simply because it has ‘always been this way’. But this attitude is risky. Especially in a public context, where accountability and transparency are key, the absence of good contract management can lead to missed grants, undue expenditure or negative findings in auditor's reports. Moreover, precious hours are lost searching for documents or fixing errors. "Without good contract management, agreements are forgotten and risks become invisible," says Dirk Jan. By not investing in contract management, you are, unintentionally, investing in inefficiency and uncertainty.

A professionally set up contract management process brings stability, assurance, and control to public organisations. By centralising and digitising contracts, the following is achieved:

• Full insight and transparency: Everyone works with the same, up-to-date information, from procurement advisors and policy officers to controllers and board members.
• Compliance and auditability: Well-documented contracts enable simple and reliable accountability towards boards, auditors, and regulators.
• Risk control: No more surprises from automatically renewed contracts or missed termination deadlines.
• Improved collaboration: As everyone has access to the same information, synergy arises between procurement, policy, control, and operations.
• Strategic management through categorisation: Grouping contracts by procurement categories (e.g. ICT, Social Domain, or Facilities) offers policy insight and allows better monitoring of objectives.
• More efficient management through automation: Notifications for expiry dates, automated approval workflows, and performance monitoring via KPIs ensure deadlines are met and performance is continually monitored.

As Dirk Jan emphasises: “Digitalising contract management is not an IT project, but an organisational improvement. You create transparency, strengthen collaboration and build a strong foundation for accountability and policy.”

Professionalising contract management is not a one-off action, but a process. "The first step? Making sure you know what you have in place. From there, you can build up the management step by step, matching the needs of your organisation," says Dirk Jan.