What is Contract Management and why it’s a game changer for your Business

What is Contract Management?

Contract Management is the process of managing all of your contracts. For this article, we’re going to focus on Contract Management related to your Supply Chain Contracts, or Procurement Contracts.

This is the management of the entire contracting process though.

So many people out there in the World of Procurement do not realise that businesses that do contract management properly are the ones who do it for both the pre-signature and the post-signature contract activities.

This is the language used by the World Commerce and Contracting organisation and this is the way we see it. Some, such as CIPS may describe this as being downstream and upstream.

Managing all the activities both Pre-Signature and Post-Signature

If we get to the heart of what is Contract Management, what are we looking to achieve? At a basic level, Contract Management is the management of your contracts within your Organisation.

Sounds like a lot of work but why are we doing this?

The objective of Contract Management is to ensure that you get what you have contracted for. This is a macro top-level aim of Contract Management. 

Let’s break it down into two macro sections.

The Contract Management Strategy: 2 Parts

Your Contract Management Strategy involves activity at the Pre-Signature and Post-Signature stages of Procurement. Without this Contract Management Strategy being in place you will be exposed to:

• Unrealised savings

• Diminished value creation for your business

• Poor Risk Management

• Poor Performance Management

• Poor Supplier Management

• Supplier Relationship Management loss of opportunity

Your Pre-Signature Contract Management strategy involves activities that need to be undertaken prior to the signing of a contract.

Your Post-Signature Contract Management Strategy involves activities that need to be undertaken after the contract has been signed.

Why do we need Contract Management?