Contract management encompasses a multitude of activities linked to the management of contracts. These activities begin long before the contract is signed. Indeed, from the very start of the contract capture phase, they are put in place. Thereafter, they continue until the contract has been fully performed, payment has been received and the contractual procedure has been formally closed.
But why take an interest in contract management?
Firstly, during the tender or project phase, contract management ensures that all commitments made are relevant. He ensures that they are consistent and therefore manageable. In addition, during program execution, it guarantees compliance with these commitments. The aim of this action is to improve the program’s profitability. What’s more, it secures the company’s position in the event of any deviations. If left unmanaged, these discrepancies could lead to disputes or litigation with various stakeholders.
So what does contract management really involve?
During the execution of the program, it is structured around several axes:
- Management of contractual obligations: This begins as soon as the contract is signed. It is based on a set of contractual documents that need to be interpreted and managed.
- Risk and opportunity management: A proactive approach is required here. It aims to improve profitability and anticipate penalties. What’s more, it allows you to identify and manage potential modifications or additions.
- Communications management: Ensures smooth communications and event traceability.
During the tender or project phase, contract management is mainly a two-stage process. Initially, an analysis of the non-technical requirements provided by the customer is carried out. Following this, recommendations are made. Then, during negotiations, she focuses on the consistency between contractual clauses, proposed services and commitments. Finally, an analysis of risks and opportunities is carried out.
What about the role of contract manager?
Whether named or not, contract management still exists. Depending on how the company is organized, different people may assume these responsibilities. The contract manager plays an essential role. Sometimes, it coordinates all contract management activities. At other times, he supports various leaders. In the absence of a dedicated contract manager, other specialists can step in.
In conclusion, contract management aims to effectively manage contractual relationships. Its ultimate goal is to maximize profits while minimizing risks. In this way, it protects and strengthens the company’s position throughout the life of the contract.
