What are the most effective ways to evaluate contract management processes? (2024)

Key takeaways from this article

• Benchmark against peers:

  Comparing your contract management to industry standards and peer organizations can reveal where you stand and what to improve, illuminating the path to best practices.

• Automate and train:

  Implementing contract management software streamlines tasks, while continuous team training on industry knowledge and negotiation skills ensures everyone is up to speed.

This summary is powered by AI and these experts

• Hareesh Radha, MSc, LLM, MCIOB, MIIQS Senior Contracts and Commercial Manager…

• Chin Yang Tay Regional Procurement Manager (APAC)

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  1) Communicate with all stakeholders to identify the requirements, intents and goals. Prioritise and categorise them accordingly.2) Use a risk management matrix to identify risk factors and the corresponding risk impacts, such as catastrophic, severe and moderate.

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  Evaluation of Contract Management Process having Three Phase1) Pre-qualification2) Tender process3) Finalization of Contract till warranty.In all three phases the Administrator must look into the best of the terms and condition, most effective vednor/Contractor, within timeline, customer satisfaction, within budget and plan, Controlling etc. The alternative of all activities must be in place, risk managment, its mitigation and absorption must be in place,market intelligence must be abserve, weakness and stregnth of competitor must be known. Best of the best procurement policies and stretegies to have a max saving at the best quality materials and services, incentive plan for internal and external must be in place for the targeted goal.

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• Muhammed Arif Muhammed Arif | Certified PMP Professional | Contract Administrator | Financial Analysis | Cost Control | Vendor Management

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  See Also

  What is Contract Management Software?How Contract Automation Drives Precision and EfficiencyChatGPT for Lawyers: How to use it and Avoid the Pitfalls | NeosKey steps for implementing a new contract management system
  Evaluate contract processes with KPIs, lifecycle analysis, compliance audits, and risk management. Ensure an organized contract repository, gather stakeholder feedback, and leverage technology effectively. Provide ongoing training, analyze contract performance, and foster a culture of continuous improvement for optimal efficiency and successful relationships.

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• Chin Yang Tay Regional Procurement Manager (APAC)

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  After defining goals and metrics, communicate with all stakeholders to understand what are the current practices, and the gaps and weaknesses which should be plugged by the contract.Ensure the contract management processes, procedures and results are within reasonable means, i.e. quantifiable and achievable, benchmark to market practices, balance of cost and effort.

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• Hareesh Radha, MSc, LLM, MCIOB, MIIQS Senior Contracts and Commercial Manager l Giga Projects l Team for FIFA World Cup Qatar 2022™

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  Ensuring the effectiveness of contract management processes is vital for the success. One key strategy is to establish performance metrics, including contract cycle time, compliance levels and evaluating these indicators for improvement. Automation, such as contract management software can streamline workflows, reducing manual errors. Developing a risk assessment is crucial addressing potential risks associated with contracts. Regular compliance audits ensure adherence to legal requirements, and relevant regulations. Assessing supplier relationships and fostering effective communication contribute to successful contract outcomes. Continuous training for the team ensures they stay abreast of the latest industry knowledge, negotiation skills.

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• Paul Revell

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  A contract is still just a piece of paper and no amount of clever contractual safeguards will do the work of a close and effective supplier relationship. It is sometimes said that when you're going back to the fine print of the contract, it's a sign that things are going wrong with the supplier relationship - and there is an element of truth to that too. Yes, get all the service levels and KPIs into the agreement - but don't stick it in a drawer and expect magic to happen. Stay close to your supplier and keep on top of the relationship too - otherwise, if the wheels come off, it'll be a big surprise to you and you might not be ready to take corrective measures.

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  In assessing a contract management process, you must keep in mind these 3 chevrons:1. Performance management - How is the performance of the contractor be managed?2. Relationship management - How is the relationship between the parties being managed?3. Contract administration - How is the contract being administered?.Once these 3 chevrons are well thought through then you are on your way to setting up an effective contract management process. Same way if you are to assess one, I will advise you assess your process along these 3 areas .Finally, the role of Kaizen as already mentioned above cannot be over emphasized, continuous improvement must be adopted as a way of working. Thanks.

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• Jim Little Executive Consultant, Board Member, Nuclear Energy Programs

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  One important aspect of contracts is that while they contain the specifications for delivery they do not manage risk. They only can fix blame but not the problem.

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• (edited)

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  In a simple way ! Everyone should need to understand the scope w.r.t Ground reality. Contracts should be fair and awarded with a Clear intention of successfully. One should always keep some safeguard on the contract.If an awarded contact is beneficial for both the stakeholders, the success rate will always be on the higher side.

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