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Contract management benefits

Discover the benefits of contract management

Benefits of contract management

Contract management is the process of managing contracts between you and the third party, for example you and the supplier. As supply chains become increasingly complex, contract management ensures that all contractual obligations are fulfilled, in line with the agreement. A successful contract management process is one that focusses on both pre-award and post-award activities. It ensures compliance at each stage of the contract, making sure deadlines are met, which will help you to manage any associated risks between you and the supplier. The larger and more complex your project is, contract management is a vital process. 

Here are a few benefits of contract management:

Improves compliance:

Contracts dictate terms and conditions and procedures that must be followed, for example, delivery times and schedules. As contracts are legally binding agreements, they help to ensure that all parties are doing their job efficiently and aligned to what’s set out in the agreement. If a party breaks their part of the agreement, such as not delivering products on time, they are in breach of contract. This could result in the matter being taken to court and risks of heavy fines.

Monitors performance:

Contract management allows you to monitor the third party’s performance. If the other party meets the terms and conditions set out in the contract, then they have completed their end of the agreement.

Risk management:

As contracts are filled with criteria and set agreement which are legally binding, they help to mitigate any potential risk. Third parties will often want to avoid heavy fines and be in breach of their contract.

 

The digital benefit of contract management software

Digital contract management can be an effective way to manage your contracts. As many organisations are striving to go paperless, contract management software offers a secure, efficient, and more collaborative way of managing contracts. 

Here are some of the benefits of contract management software and what it offers to your organisation:

Convenience:

Contract management software improves efficiency from start to finish. Simply choose an existing template and edit the elements that are needed. All people involved will be able view and sign the contract without needing a face-to-face discussion.

Accuracy:

Contract management software removes human error that can often happen in traditional, written contracts. Having contracts stored online means they are all in one place, improving collaboration and the ability to make any changes quickly.

Security:

Contracts are stored on a secure system, permitting only users with access to view or make changes. There is also an option to digitally sign, preventing individuals from forging signatures.

Automation:

Using contract management software can help to save time. All parties will receive alerts if a contract is due to expire, which avoids a contract rolling over from year to year. Changes can be made using the software too, with a noticeable digital trail of any amendments.

 

CIPS Contract Management Cycle

Our Contract Management Cycle is used to create a smooth end-to-end process, ensuring optimum scoping, planning, managing, and reviewing are taken place at the right time. Find out more about the Contract Management Cycle

Contract management key themes

Contract management Strategy Breach of contract End of contract
Contract performance KPIs Soft Skills

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Contract management guide: Part 1

Effective and successful contracts require careful, comprehensive and thorough work before the deal is even awarded. This guide will give you a greater understanding of the importance of the pre-award phase of contract management and give hints and tips you can use for any deal.

Contract management guide: Part 2

The most effective and successful contracts depend on both thoughtful and thorough work before the deal is done and careful management throughout the lifetime of the arrangement. This guide will give you a greater understanding of the importance of contract management, focusing particularly on the work you need to do post-award.

Dispute resolution

Dispute resolution can be time-consuming and costly. This guide will give you a greater understanding of the four different approaches to dispute resolution, as well as alternative methods for consideration when loooking to select the right approach for your dispute.

Managing Supplier Non-Performance

This paper will help you to understand the different remedies available to you as a procurement and supply professional in the event of supplier non-performance. It examines the different mechanisms and approaches to non-performance that you can use before resorting to contract or relationship termination.

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Procurement Skills Training

Accelerate your learning and keep your knowledge and expertise up to date with our contract management training courses.

CONTRACT MANAGEMENT TRAINING

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