What is Contract Management?

To put it simply, contract management is the process of managing agreements, which would take place across its entire lifecycle: from setup to implementation, and close out, for the purposes of achieving project deliverables.

Seven Stages of Contract Management

1. Planning: developing a system in line with the company’s requirements and resources. Note, this is a flexible roadmap where stakeholders and all parties concerned should be provided with the opportunity to provide input.
2. Implementation: when the onboarding procedure is complete, specialised contract management software is then utilised.
3. Pre-contract stage: this is where risk management plays a critical role, with compliance obligations forming an integral part.
4. Handover: never be in too much of a hurry at this stage, as it’s wise to take the time to recapitulate the terms of the agreement with stakeholders, so as to manage expectations as professionally as possible.
5. Contract stage: here, project goals and milestones are set in place while making sure timeous reporting is performed, to ensure all’s on track; also known as quality control in terms of production accountability.
6. Pre-renewal: it’s beneficial to ruminate on the end of your contract in a proactive and timely fashion, sooner than later, where it’ll be useful to evaluate and improve if necessary, before taking steps for possible renewal.
7. Post-contract stage: further administration is required to make sure the conditions as set out have been met, any outstanding invoices have been settled, and so on. Consider carrying out a post-mortem with the team, which may provide actionable insights for improvement when drafting the next contract.

Contract Management Best Practice

As a starting point, be sure to conduct regular compliance reviews. Neglecting this responsibility fails to protect companies against the legal, industry, and external regulatory risks, i.e., environmental impact assessments, if construction is carried out, for example.

A Contract Manager’s Job Description

A Contract Manager would usually be concerned with the following aspects of an engineering business, among others: contract law, cost, strategy, strategic management, project management, measurement, finance, purchasing, supply chain, human resource management, conflict management and resolution, dealing with Consultants, as well as quality performance, which, by definition, is known as a numerical measurement of the performance of an organisation or process, assessed through measurement of physical products and statistical sampling of the output of processes.

One of the central tools a Contract Manager would usually employ is a Quality Management System (QMS), which, essentially, documents processes, procedures, and responsibilities for achieving quality assurance via policies and objectives. Organisations often use an International Organisation for Standardisation (ISO), in conjunction with a QMS, for service quality purposes, which assists in delivering consistent products and services that meet customer and regulatory requirements.

Key Performance Indicators (KPIs)

When the following KPIs are met, then one can easily gauge if contact management has been carried out successfully.
1. The realisation of intended business benefits, including profits.
2. Cooperative suppliers who are empathetic to company requirements.
3. Little to zero: contract disputes, unexpected expenses, and delays are experienced.
4. The service delivery is at the very least acceptable—if not highly satisfactory—to all parties.