When your finance manager leaves, what walks out the door with them?

It happens quietly. Your finance manager accepts a new role. HR processes the departure. IT collects the laptop. Everyone wishes them well.

Then, three weeks later, a vendor renewal lands on someone's desk.

"Why do we pay $50,000 a year for this?"

Silence.

The person who negotiated that contract is gone. The evaluation that led to choosing this vendor over four alternatives? Undocumented. The 15% discount secured after two rounds of negotiation? Nobody remembers how it happened or whether it's still in effect.

This isn't a hypothetical scenario. It's happening right now at thousands of mid-market companies. And it's costing them far more than they realize.

The institutional memory problem

Every vendor relationship carries context that lives in someone's head:

  • Why was this vendor chosen in the first place?
  • Who was the internal champion, and who's the day-to-day contact?
  • What were the alternatives considered, and why were they rejected?
  • How was the current pricing negotiated?
  • When did we last evaluate whether this tool still fits our needs?

This context—what we call institutional memory—is the difference between managing vendor relationships strategically and just paying invoices.

The problem is that institutional memory is fragile. It exists in email threads that get archived, in Slack messages that scroll away, in the minds of people who eventually move on.

Mid-market companies are particularly vulnerable. Unlike enterprises with dedicated procurement teams and vendor management platforms, most 50-500 employee companies manage vendors through a combination of spreadsheets, email, and tribal knowledge.

When a key person leaves, that knowledge evaporates.

The cascading costs

The immediate cost is obvious: someone has to figure out what's going on with each vendor relationship from scratch. But the downstream costs are where it really hurts.

Duplicate subscriptions appear. New hires don't know what tools already exist, so they purchase software the company already has. With the average mid-market company running 536 SaaS applications, it's nearly impossible to know what's already in the stack without a system to track it.

Negotiating leverage disappears. That 15% discount your predecessor secured? Without documentation, you're starting from zero in the next negotiation. Vendors know this. They count on organizational amnesia.

Auto-renewals slip through. Without context on which vendors are underperforming or overpriced, renewals happen on autopilot. The 30-day opt-out window passes. Another year locked in.

Training problems get misdiagnosed. Low satisfaction with a tool might mean it's the wrong solution—or it might mean employees haven't been properly trained. Without historical context, companies replace expensive software when a training investment would have fixed the problem at a fraction of the cost.

Relationships fracture. Vendor relationships are relationships. When continuity breaks, you lose the rapport, the understanding of each other's businesses, the willingness to go the extra mile during a crisis.

Add it up, and mid-market companies lose an estimated 20-30% of their SaaS spend to these inefficiencies. For a company spending $1 million annually on software, that's $200,000-$300,000 in preventable waste.

Why spreadsheets don't solve this

The reflexive solution is to create a spreadsheet. List the vendors, their costs, renewal dates, maybe a contact name.

This helps—for about two weeks.

Then reality sets in:

  • The spreadsheet becomes outdated the moment someone forgets to update it
  • Critical context (the why behind decisions) doesn't fit neatly into columns
  • When the spreadsheet owner leaves, the file either disappears or becomes an artifact nobody trusts
  • There's no accountability—who's responsible for updating which vendors?
  • There's no workflow—how do you actually act on the information?

Spreadsheets capture data. They don't capture knowledge. And they certainly don't preserve institutional memory through transitions.

What actually works

Companies that manage vendor relationships well—that don't lose millions to turnover-driven amnesia—share a few practices:

They document the "why," not just the "what." It's not enough to know you're paying $50,000 to Acme Corp. You need to know why Acme was chosen, what problem it solves, who evaluated it, and what the alternatives were. This context is what enables the next person to make informed decisions.

They assign clear ownership. Every vendor relationship has a designated owner. When that person transitions, there's an explicit handoff—not just access to a shared drive, but a transfer of context and relationships.

They track satisfaction, not just spend. Cost is one dimension of vendor value. But a $10,000 tool that employees love and use daily delivers more value than a $5,000 tool that sits unused. Smart companies measure both.

They build systems, not spreadsheets. The knowledge needs to live somewhere that survives individual departures. Somewhere with accountability, workflows, and the ability to capture narrative context alongside structured data.

The question to ask yourself

Here's a simple test: Pick a vendor your company has used for more than two years. Now ask yourself:

  1. Why was this vendor originally chosen?
  2. Who evaluated the alternatives?
  3. What discount or special terms were negotiated?
  4. When was the last time someone assessed whether this tool still fits your needs?
  5. If the person who manages this relationship left tomorrow, how long would it take to reconstruct this context?

If you can't answer these questions—or if the answers exist only in someone's memory—you have an institutional memory problem.

The question isn't whether employee turnover will happen. It will. The question is whether your vendor knowledge will survive it.

Moving forward

We built VendorLog because we've lived this problem. We've watched companies lose hundreds of thousands of dollars because critical context walked out the door with a departing employee.

The solution isn't to prevent turnover—that's neither possible nor desirable. The solution is to build systems that capture institutional memory in a way that persists through transitions.

That means documenting the why, not just the what. It means tracking relationships, not just renewals. It means creating a living record that new hires can learn from and build upon.

Your vendor relationships are too important—and too expensive—to trust to memory alone.

VendorLog is a vendor relationship intelligence platform that helps mid-market companies preserve institutional memory through employee transitions. Join our waitlist to get early access.