Contract governance
Auto-renewal is a decision. Make it on purpose.
Most technology contracts renew by default. The leverage disappears the day the notice period closes.
· 3 min read · ClearPath Technology Advisors
Nobody decides to overpay for software. It happens through inaction: a notice period passes, a renewal triggers, and a price escalator applies to licenses that may no longer be in use. The contract says it was agreed. In practice, nobody agreed to anything.
Leverage has a deadline
A supplier negotiates very differently six months before renewal than six days after it. Early, you have time to right-size, benchmark and credibly evaluate alternatives. Late, you have a signature page. The savings available in a renewal are mostly determined by when you start.
A simple discipline
- Keep one register of every technology contract, with owner, value, term and notice date
- Set a decision point well before each notice period, not at it
- Check usage before you negotiate, not after
- Treat every renewal as a sourcing event, even when the answer is to stay
None of this requires new software. It requires ownership and a calendar. It’s also the first thing we put in place for clients, because savings that aren’t governed tend to return at the next true-up.
The cheapest negotiation is the one you start early.