First and foremost, contract managers are responsible for everything related to the drafting, approval, signing, modification and termination of a contract, while project managers are responsible for everything related to actual performance and the achievement of contract objectives. Both roles work best when there is a clearly defined process for both. It is particularly useful for informing your overall approach to contract management by identifying key activities that you should focus on when developing your CMP. There is no doubt that every contract is somewhere on a continuum of complexity that ranges from tiny to mega. The contract management plan determines the way forward for the creation, negotiation, performance and finally the renewal of contracts. When you create a plan, you remain in control of the process. Expect to return to your plan throughout the project. Your contract management plan should ensure that the objectives and expectations set out in your strategy can be achieved. Some of the most important steps in your planning phase should be: During development until the execution of the new contract and the implementation after execution, all elements of the plan should ideally be recorded in: Configure your contract management tools.
Make sure you have prepared all the necessary documents. Then use your contract management tools, whether it`s simple spreadsheets and calendars or more sophisticated contract management software. Organize the kick-off meeting. You may work with a number of different stakeholders during the contract management process. The people who have negotiated a contract will not necessarily be the ones who respect its terms. At this point, make sure everyone involved is aligned with the details of what the contract will provide and how. Leverage (high-quality, low-risk contract): Requires a CMP that focuses on how to extract as much value as possible from the contract (e.g., B monitoring of expenses, leaks, application of discounts, volume discounts). Risk management.
Your risks should already be identified, but at this point, you may need to implement your risk mitigation or response plans. New challenges can always arise – so stay on your guard. the financial returns or other benefits to the business as a result of the successful conclusion of the contract; It is important that contract management systems are able to integrate standard procedures with details specific to the company`s objectives. In this contract management phase, the type of contract is identified and who is responsible for each task. The planning process includes resources, objectives and people, while developing an overview of the potential risks and challenges of the project. Risk management – A robust system can reduce risk by increasing transparency and recording the process from which you can learn and report later. Note, however, that the plan is not intended or required to be immutable. It is an examination and a refresh or replacement should be explicitly allowed so that it can be considered relevant to the circumstances, as often as it may be. With this basic knowledge of contract management, you will be able to securely manage the agreements essential to the success of your projects. Have you mastered that? Take a look at the other key skills you need as a project manager.
Whether it is changing circumstances or requirements, lessons learned or good advice, a request or complaint from an internal stakeholder or external third party, the results of a regular review of continued relevance, or the recognition of excess, there can be many triggers that lead to the need to modify certain elements of the contract management plan. For project organizations that carry out projects with contractors or companies, it is important that the contract cycle is monitored and controlled. Poor contract negotiations, poorly drafted contracts and/or a lack of oversight can lead to problems that often lead to costly disputes or project delays. Contract management requires time management, attention to detail, risk management, and compliance. Contract management tools and processes help make contract management easier and more efficient. Transparency of the process – ensures that all parties involved are aware of the current details and status of the contract. Strategic (high quality contract, high risk): Requires a detailed CMP and an experienced contract manager. Contract approval often involves multiple approvals from different managers and departments, as well as contractors and suppliers. Anyone may need to approve the contract specifications before the final agreement is reached.
Having a contract management plan for contracts that warrant active management is really a no-brainer. Of course, this plan must be comprehensive and cover all the activities necessary to be effective, especially if the corresponding contract meets an internal definition of complex. When you sign a new contract, the first step is to establish a strategy so that everyone involved understands the goals of the process. A successful strategy should include the following: Review. Check the contract details and make sure the work is complete – that the conditions and benefits have all been met. You may also choose to provide feedback to the third party to improve their further processing. The categories of activities presented above can serve as a guide, and contract management elements and plans created for other contracts can be very useful, even if the topic is different. However, the people involved, the activities actually needed, the schedule and the dependencies must necessarily be determined for the specifics of the new contract itself. Manage contract changes. At any time during the performance of a contract, there may be deviations, extensions or other changes to the terms of the contract.
In this case, you need to ensure that all stakeholders are aware of the changes and their impact, and that these changes continue to achieve the business and financial goals set out in your strategy. Evaluate. When your contract comes to an end, evaluate the process and the outcome. Take a look at your contract management process and choose all the information to improve your own work and that of your team in the future. Contract management as part of project management deals with suppliers, vendors and/or suppliers and procurement management according to the terms set out in the contracts. Having a well-thought-out plan, working on the plan, and monitoring progress against schedule is a classic and proven measure of risk avoidance. Ad hoc, pant seat, reactive measures are anything but undesirable, but can deliver in situations where “Whoa!” is the natural reaction. The decision as to whether a contract is complex or not should be evident in the development of its specification of requirements. In many organizations, it is typical for a contract manager to be responsible for a range of contracts. It is also common in large organizations that a highly complex contract is the sole responsibility of a contract manager. Contract management software can be as simple or sophisticated as your needs and budget allow.
You can choose a dedicated contract management software or use your own spreadsheet and calendar system. .
Recent Comments