Lifecycle contract management helps organisations avoid unnecessary risks and costs that could otherwise threaten their business.
Key risks throughout the contract lifecycle include:
- unmanaged contract data
- no visibility on key party involvement
- inaccurate reporting
- missed or late renewals
- insufficient contract performance monitoring.
These risks are avoidable by adopting some key aspects of best practice contract lifecycle management.
Not for profits, NGOs, local councils and commercial organisations who rely on a portion of their investment from government funded programs face the heaviest burden of all as accountability and transparency requirements are even greater.
Avoid unnecessary contract management risk starts with addressing 4 key critical factors:
1 – Managing Contract Data
Improving contract data management is the foundation to achieve successful contract lifecycle management.
To get started its critical to unify all contract data in a single system to manage all contract details and documents, contacts and payment information.
2 – Consistent Business Processes
Organisations need to introduce and standardise workflows for business processes. This removes the risk of ad hoc processes.
With consistent business processes contract managers can exert more effective visibility across the contract lifecycle and all parties.
To be best practice organisations must find the balance between standardisation and reflecting “how work is done”.
3 – Automating Contract Monitoring
Automation improves administration while eliminating risks like delays, missed renewals and payments.
Monitoring provides warning to contract managers before bottlenecks occur. Efficiencies are gained from the system recording milestone achievements, triggering payments and tailoring data for individualise reporting for stakeholders.
With automation contract managers gain control of their roles and work, rather than it controlling them.
4 – Eliminating Siloed Systems
Contract management teams use a variety of different software systems. Once contracts pass to other business areas or external parties more systems are involved.
Disparate systems introduce risks like data contamination, inconsistent processes and inability to automate. Lifecycle contract management must integrate to other core business systems to ensure data is shared, up to date and tracked.
Reducing unnecessary risks in contract management is easier and more cost effective than ever.
With software as a service cloud-based tools, like Enquire Contract Management, foundations, NFPs, NGOs and other organisations can benefit from in-built best practice to manage contract risk.