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The process of managing contracts is known as contract management. This covers the contract's deliverables, timelines, and terms and conditions. It's not only about speeding up the contracting process; it's also about managing customers and their pleasure.
Contract management is utilized by both public and private sector businesses to efficiently manage contracts after they've been signed, resulting in improved operational and financial performance. It also aids in the reduction of the organization's financial risk. A good contract management approach, while time-consuming, minimizes costs and increases performance.
Who’s Involved in Contract Management?
A contract manager is a dedicated employee in some businesses who is responsible for contract management. As contracts progress through their lifecycle, they direct and manage them. In a manner, they serve as a link between businesses, employees, consumers, vendors, and contractors.
Negotiations, recommendations, and all contract-related record-keeping will be facilitated by a contract manager. They conduct legal research on all contract-related legal concerns and assist in negotiating terms and conditions with the client and third parties.
Preparing commercial bids, designing and presenting project ideas, interacting with clients, estimating budgets, and negotiating contract conditions are just a few of the responsibilities of a contract manager. They have contract legal understanding and are good at relationship management, among other things.
Why is Contract Management Important?
Contracts are crucial. They're legally binding contracts between an employee and the contractors or vendors who'll be doing the task. As a result, contract management is critical since it ensures that contractual work is completed efficiently. In terms of business strategies and procedures, it benefits both parties.
Because the successful negotiation of a contract affects so much of an organization's business strategy, the process can be lengthy. Contract management allows you to allocate just the correct number of resources.
However, after the contract is signed, it is necessary to monitor and oversee its implementation in order to meet the contract's responsibilities. Failure to implement a contract management strategy can result in fines and lawsuits, as well as the deterioration of vital business relationships.
Even after the contract has been concluded and services have been obtained, contract management continues to be beneficial. This might lead to a failure to meet all contractual commitments if there is no oversight. All of this reduces the project's value and may even result in its failure to meet its goals.
Need more insights on Contract Management? Enroll in a PMP, or CAPM training program today!