Supply Chain Resilience: Tackling New Challenges and Risks
Learn how to build a resilient supply chain strategy to navigate IT outages, geopolitical tensions, and regulatory complexities. Explore key action steps.
Advisory
Supplier & Contract Management
Unleash the full strategic value
of your sourcing relationships.
How can you capture the full value of your supplier relationships, from day one?
You've put major time and resources into choosing the right suppliers and crafting complex agreements. Now you have to make sure you're getting the performance and service quality you're paying for. Inadequate contract management can lead to serious deterioration in both. We call it value erosion, and it can cost you as much as 15% to 30% of total contract value.
We not only help recapture this lost productivity, but also uncover more value in your supplier relationships, working with you to supercharge your vendor management organization and free your teams up to do what they do best—focus on strategic opportunities to expand and enhance your contract portfolio.
Learn more about our Vendor Management Office as a Service capabilities.
The market has moved from ambition to accountability.
AI investment is accelerating, but results remain uneven. Only one in four initiatives is meeting revenue impact expectations, at an average spend of $1.3M per use case. Enterprises are no longer asking whether AI works. They are being asked to prove that it pays.
What We Deliver
AI strategy, governance and intelligence, built for execution.
Autonomous Enterprise
Operations built for autonomous execution, not retrofitted for it.
We help you identify where AI agents deliver the most value, restructure workflows around them and build the accountability models that keep autonomous execution auditable. The enterprises that win won't be the ones that reacted. They'll be the ones that designed for it first.
Autonomy-Level Pricing
Pricing that reflects how AI-enabled services are actually delivered.
We give enterprises transparent, benchmarkable pricing models that tag each resource unit with the autonomy level used to deliver it. As AI capability advances, your pricing keeps pace. Both buyers and providers can quantify what that progress is worth.
AI & Software Intelligence
Build-versus-buy decisions grounded in what AI is actually delivering.
We bring analysis of more than $2.6 billion in tracked AI spend to every sourcing decision. Procurement, technology and finance leaders get the independent intelligence to rationalize vendor portfolios and hold providers accountable to measurable outcomes.
AI Governance
Governance that accelerates AI adoption rather than constraining it.
We embed controls at the point of data creation, define accountability for autonomous actions and build adaptive frameworks that keep pace with AI without impeding it. Enterprises that get this right don't just manage risk. They build the trust that lets them scale faster.
AI Strategy
AI investment aligned to where impact is most achievable.
We ground strategy in research across 2,400 enterprise use cases, aligning investment to where impact is proven and designing the data, talent and governance foundations that move AI from pilots into the workflows that drive commercial results.
AI Maturity Index
A clear view of where you stand and a roadmap to where AI starts delivering.
We benchmark your AI readiness against peers across 75 countries, identify the dimensions holding you back and give you a personalized roadmap to close the gap.
The market today
Enterprise AI has moved out of IT and into the revenue line.
AI investment is shifting decisively toward revenue-generating functions. CRM automation, sales enablement and forecasting have replaced chatbots and IT productivity tools as the leading use case priorities, reflecting enterprise recognition that productivity gains alone do not satisfy board-level scrutiny. At the same time, use cases in production have doubled since 2024, and the portfolio is diversifying rapidly, with over 300 distinct function and industry-specific use cases now in active deployment.
ISG research across 2,400 enterprise use cases shows that the strongest AI returns are currently concentrated in compliance, risk management and quality control, not in the growth and cost outcomes most enterprises originally set out to achieve
The gap between where enterprises are investing and where AI is actually delivering is the defining commercial tension of 2025. Organizations that close it by targeting functions with structured, revenue-attributable data and clear ROI measures will establish performance benchmarks that compress the window for competitors still cycling through pilots. The standard is being set now.
Where enterprises are feeling the pressure
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Business outcomes are lagging AI ambitionEnterprises are scaling Al faster than they are realizing value from it. The number of use cases in production doubled between 2024 and 2025, yet only one in four initiatives is meeting revenue impact expectations, and broad cost savings remain elusive. At an average spend of $1.3M per use case, the ROI gap is sharpening board-level scrutiny and forcing a harder question: are we building Al for impact, or for activity?
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Data infrastructure exposing deferred investmentAl does fail in isolation. It fails on the foundations beneath it. Most enterprises are running modern Al on architectures built for reporting and compliance. Generative and agentic Al demand real-time contextually rich, governed data at the point of use. Without it, pilots stall and value dissipate before it reaches the business.
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The barrier to scale is organizational, not technicalOrganizational readiness as the bigger constraint on Al adoption, not talent or tooling. Workflows haven't been redesigned. Decision rights haven't shifted. Enterprises that treat Al as a pure technology deployment, without investing in the human side of adoption, consistently report underwhelming ROI.
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Agentic AI is outpacing governanceAs Al moves from generating outputs to executing tasks autonomously, the governance gap widens. Agentic Systems introduce a new class of risk that static compliance frameworks were never designed to catch. Governing what Al does, not just what it produces, is now a business-critical requirement.
Solutions designed using decades of sourcing experience and input from leading global companies.
85+
blue chip clients
20+
countries
11K
contracts managed
$65B
total contract value under management
up to
80%
increase in contract compliance within first year of operations
A proven supplier and contract management framework, tailored to your business.
It can be tough to coordinate the processes, systems and people you need to manage a large portfolio of contracts. Many businesses need outside help with this.
ISG provides a unique combination of business services industry knowledge, contract expertise and automated technology. We aim to help you optimize every aspect of your supplier and contract management life cycle.
Capabilities from design through delivery
- Program strategy and design
- Negotiating and contracting tools
- Supplier performance analysis and optimization
- Market intelligence and benchmark data
- Continuous third-party risk assessment and management
- Managed services and fully outsourced solutions
Results you can achieve rapidly, and sustain for the long term.
Gain a better understanding of your contract portfolio and use it to improve performance and service quality.
Avoid the slippage, overages and inefficiencies that typically undermine contract performance.
Quickly and efficiently address problems and collaborate and innovate together to head off new ones.
Fully understand suppliers’ solutions, business models, risk exposure and position in the marketplace.
Capture the full value of your supplier relationships, and sustain—and even improve—that value over the long term.
A powerful combination of expertise, insight and automation.
We know about contracting and the complexities involved with managing a multi-supplier ecosystem. We have seen a lot in our 20 years of sourcing and managing $475 billion of enterprise-supplier transactions.
Our unmatched, hands-on experience gives us insight into supplier relationships and contract management you can't get anywhere else. It's our mission to use that experience to
ensure you get complete clarity and full value from all your sourcing relationships.
How do we deliver it?
A team of sourcing specialists, business strategists, contract experts, and data analysts with an intimate knowledge of your supplier ecosystem.
Access to ISG’s unrivaled sourcing industry data derived from hundreds of deals and contracts and our industry-leading trend and competitive research.
An easy-to-use automated platform that gives our analysts and your teams a complete, real-time picture of your supplier agreements and relationships
ISG GovernX®
ISG’s Supplier & Contract Management solutions are supported by GovernX, our world-class, end-to-end managed service and lifecycle management SaaS platform. GovernX provides our analysts and your teams with the real-time, AI-powered data necessary to manage complex contract portfolios effectively, and get the greatest value out of your supplier relationships.
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Research
Transforming Supply Chains for Resilience and Efficiency
In the current business landscape, enterprises continue to face disruptions such as tariffs, wars, political unrest and climate shocks. Hence, it has become mandatory for supply chain leaders to look beyond temporary fixes and pursue larger transformations to gain a competitive advantage. A siloed or process specific uplift provides short-term relief, but building future-ready, connected, intelligent and sustainable supply chains requires a comprehensive revamp, driven by technologies such as AI, analytics, supplier relationship management (SRM) and automation. This year’s assessment highlights a major shift in chief supplier officers’ approach, focusing more on enhancing process optimization and operational efficiency than merely targeting cost savings to stay ahead of the competition.
Research
Collaborative Supply Chain Forecasting Faces Serious Challenges
Collaborative Supply Chain Forecasting (CSCF) is a business discipline involving multiple supply chain stakeholders, including suppliers, distributors and sellers, that is aimed at producing a more accurate forecast of future demand and supply. Participants share supply and demand data, forecasts, assumptions and insights to improve visibility, reduce inefficiencies and attenuate supply-demand mismatches. ISG asserts that by 2028, one-third of larger enterprises will have adopted some form of CSCF to reduce costs and improve customer service and supplier relations. However, there are serious challenges to widespread adoption.
Research
Specialist providers deliver vertical expertise, AI-first capabilities and consultative approaches
Supply chains are being reimagined with intelligent orchestration, adaptability and resilience. Globally, they are under mounting pressure due to complexities driven by multitier supplier ecosystems, distributed manufacturing setups, hyperlocalized demand patterns and operational dependencies arising from geopolitical shifts. Supply chain companies
are increasingly recognizing that data and AI are essential for transforming supply chains, enabling responsive and even preemptive actions to minimize disruptions and their economic impact.
Research
Get the Inside Story on Your Suppliers
Use data to assess your supplier delivery against regulations and monitor customer-specific requirements. Complexity and regulatory scrutiny of third-party relationships are on the rise. Get a comprehensive and data-driven way to control risk throughout the life of the relationship.
Frequently Asked Questions
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Q1. What is value leakage (or erosion)?
Value leakage happens when a business loses potential profit or cost advantages somewhere between its operations and the customer. This means a deal or project doesn't deliver the full value it promised. Failure to achieve promised value often happens when established processes aren’t followed, performance management is poor, projects shift unexpectedly or opportunities for improvement are missed.
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Q2. How can organizations prevent value leakage?
Keep suppliers on track by monitoring their performance, making sure they fulfill their contractual obligations and maintaining clear communication. Continuously track results, identify and address issues, figure out their root causes and update agreements as circumstances evolve.
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Q3. How is supplier relationship management (SRM) different from contract lifecycle management (CLM)?
SRM focuses on building lasting, collaborative partnerships with suppliers to maximize value. CLM manages contracts from start to finish – including creation, negotiation, approval, obligation tracking, amendments, renewals and eventual archiving.
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Q4. What is the most effective way to manage my suppliers?
Build strong partnerships, monitor their performance and proactively solve issues. Continually refine the collaboration process. Foster honest and transparent communication with all stakeholders, maintain detailed documentation and always ensure your actions align with your objectives and relevant regulations.
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Q5. What is third-party risk management (TPRM)?
Managing third-party risk means identifying and reducing the potential problems that come with working with external companies or partners. TPRM helps you manage risks from vendors and partners from the moment you start working with them through the entire business relationship. It safeguards the organization by proactively identifying, monitoring and managing potential issues like financial loss, operational disruption, legal challenges, security threats and reputational damage.
