Contractors Management is the process by which we manage our relationships with our contractors.

I would like to think that it is a bit more than that. Perhaps ‘Good Contract Management’ is a more relevant definition, which may be ‘a systems approach to the proactive and methodical management of a contract from initiation through award, to compliance and renewal. Good Contract Management is what is required to take you from re-active to pro-active contract management, and is what will make a significant impact on your contract management effort.

Contract Management Software helps to mitigate many of the contracting risks that stem from non-compliance to negotiated terms and conditions of agreements and bad contract management. The key benefits of contract management software are as follows:

Value delivery on either side of the agreement. Only if you are aware of the deliverables in agreements can you take pre-emptive action on critical contract milestones and triggers. Organisations are typically good at certifying payments to suppliers, but not good at ensuring delivery of contract obligations. Conversely, Suppliers do not always maximise the potential of each customer relationship. Lost revenues and over-expenditure occur when parties do not have good systems in place.

Mitigation of the risk of and liability in potential legal action. If you are not in compliance with the obligations of agreements to which you are party, then potential litigation could have disastrous consequences for you and your organisation. Contract Management Software helps to ensure better compliance to commercially critical terms and conditions.

Contract Management Central Repository

The primary objective of contract management software is to implement a central repository of contracts. This means a central repository of contract data, and contract documents. The two are not mutually exclusive, and one without the other does not provide full visibility of agreements. Document Management is not Contract Management

Setting up the central repository of contract data and documents provides visibility into your organisation's contractual commitments, and is a stepping stone to corporatizing corporate best practice business processes and pro-active management of the terms & conditions of these agreements.

Contract management software helps to mitigate the risk of not knowing what your contractual relationships are, and who they are with. The risk of litigation and revenue leakage due to non-compliance is managed by setting up pro-active alerts around commercially sensitive contract trigger points, which include deliverables, renewals, price triggers, and obligations.

Contract Management Risk and Compliance Management

In order to assure your organisation's compliance with the terms & conditions of your contractual commitments, you must implement pro-active management of contract deliverables. Contract Management software systems provide pre-emptive alerts to commercially sensitive contract trigger points and milestones, that email contract managers, providing advance warning that an event is approaching, and allowing them to take the relevant action prior to the event.

The real business of contract management is managing relationships between contracting parties, and a contract manager can only do this if he/she is supported by systems that process data, bringing salient information to their attention. Contract managers who spend their days wading through spreadsheets do not have the time to effectively manage relationships.

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