Procurement Contract Ownership: 101 Guide
Who should be the contract owner in your organisation?
Procurement teams always get caught up in mastering sourcing or pre-signature activities. This is great, but one part of the procurement lifecycle often gets overlooked because it’s considered a minor detail: “Contract Ownership”.
Contract Ownership might be one of the most critical processes and concepts for you to get right in your organisation, especially if you’re in a highly technical area.
The Contract Owner will be responsible for almost every activity linked to the contract and the supplier.
It’s a significant role that is commonly misunderstood, so ownership of contracts is in disarray.
Perhaps you consider this easy - procurement owns the contracts.
But that isn’t scaleable.
Okay, perhaps the person who signed the contract owns that contract?
No, this will usually be a senior person who doesn’t have time to manage the day-to-day operations of a contract.
And that’s what we’re talking about. The day-to-day management of your contracts from the initial request (which might trigger an RFX exercise) through contract closure by whichever means is most appropriate.
But you, my procurement legends, are uniquely placed. You intersect every part of the organisation (one of the reasons I love procurement and the main reason I genuinely miss being a practitioner right now. ☹️). Alongside legal (perhaps without them, depending on their appetite), you can drive effective contract ownership throughout your organisation.
I will break this down for you as someone who has dedicated their career to effective contract management within the procurement and supply chain. ✌️
1 - Understanding Contract Ownership
Contract ownership refers to a person or a group who oversees the contract across its entire lifecycle, from creation to negotiation, execution, and final closure.
The contract owner(s) are usually the people/persons who request the service or goods and deal with the supplier daily.
That’s the simple bit.
Contract management is a comprehensive process in the procurement lifecycle that ensures both parties involved understand their rights and obligations and adhere to the contract.
It's divided into pre-signature (creation, negotiation, finalisation) and post-signature (tracking compliance, enforcing the contract, resolving disputes) stages.
The contract owner is pivotal to effective management throughout the entire lifecycle.
Here’s your Contract Ownership checklist for the activities a contract owner could be involved with, depending on where you want their focus.
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