Contracts are an essential part of any business and contract managers are the critical component of overseeing all elements of a contract lifecycle. For smaller companies and organisations, they must be skilled in numerous areas, such as legal compliance, communication and negotiation as well as understanding risk. For larger businesses with their own legal and compliance teams, there is less pressure on a contract manager to have legal knowledge, but they will still be required to liaise with and report to all relevant departments, as no matter the industry, contract managers are the primary individual responsible for all stages of the management process.
With the general move towards automated contract management, there will inevitably be a change in some of the roles and responsibilities required of a contract manager, however, contract management software should be viewed as a tool to enable processes to run more efficiently rather than as a replacement for the role.
An important aspect of any contract management process is communication. There needs to be visibility and understanding not just between all the departments or persons involved in the contracting process, but between vendors, third-parties and stakeholders. Not only do you have to create an environment that produces an excellent working relationship and allows the contract lifecycle to run as smoothly as possible by providing visibility and accessibility to everyone involved, but contract managers need to allow information to be readily available whilst staying compliant with data protection regulations and keeping the business secure.
In the event of a changing situation or crisis (the Covid-19 pandemic being the obvious example) the ability to amend contracts and clauses to reflect new circumstances is vital, especially to satisfy legal obligations and changing regulations, and that can only be achieved if you have good communication and a solid working relationship with your third-parties and stakeholders. To gain the agreements of all parties and to quickly communicate and clarify any amendments is a key responsibility of a contract manager.
Often the contract negotiation may fall to the job of contract manager, in this case, you must be able to negotiate the best value for your business whilst managing the expectations of all parties involved and communicating the stages of negotiation to any relevant team members, including making the often technical and legal jargon more user-friendly and not relying on outdated language. This communication and understanding helps ensure that that throughout the contract process all obligations and deliverables agreed upon in the contract are met to the standards required.
Having a system of record is one of the most important responsibilities given to a contract manager. Keeping a thorough and substantial record of all documents and data attached to a contract can provide an audit trail that mitigates risk and protects the business from any potential litigation. Due to global expansion of businesses today, a substantial part of management for contract managers is the number of documents and data required for each contract. If a company has large number of complex contracts, the information that needs to be stored is huge. With digital advancement, this has moved on from filing cabinets and documents are now predominately stored online. However, in order to have a system of record, contract mangers are turning to contract management software to ensure a centralization of all the data and documents. Having all your documentation together streamlines the documentation process and provides easy access to data and easy management of documents, contracts and legal agreements. It also allows for easy growth and scalability of your business and in certain industries. Contract management and the associated administrative processes can be simplified by available software due to advanced search functions and tagging tools. By using metadata to search contracts for key words and clauses, information can be identified quickly and easily, making contract management efficient and optimizing the time and resources of a contract manager.
Contract managers should be fully adept at risk management regardless of any other teams or departments. This is due to the possible risks involved in any contract. Although third party risk management is not technically the job of a contract manager, they should ensure that all third parties and vendors are properly assessed and the contract between all the parties is correct and fair, which helps mitigate the risk and avoids costly contract disputes for all those involved.
Risk analysis and cost benefit assessments should be part of a contract managers armory and by working in conjunction with financial and legal teams, or being adept themselves, contract managers can gain a working understanding of the possible consequences that may arise from a contract from a financial and legal point of view. Having a comprehensive relationship across departments ensures the all employees work together to reduce the risk to the business and help protect it from significant harm.
If a contract manager understands the risks and ramifications involved with each contract, they can mitigate any future issues by assessing, monitoring and mitigating risks that can have a detrimental effect on your relationships and business. This requires a meticulous attention to detail in regards to contract milestones, dates, deadlines, termination clauses and deliverables. Anticipating any issues and their impact on the contract and business is a key element of contract management.
Risk management software and its implementation can often be a useful administrative tool for contract managers, by making the process simpler and allowing fact-based decision making. Features such as intelligent questionnaires, advanced security profiling and background checks, incident and identity management suites like the ones from Symfact, can all help a contract manager manage and mitigate risk more easily.
Regardless of whether a business has a compliance officer or team in place, it is important for a contract manager to understand compliance, in the same way a contract manager must understand risk. Being able to manage the various terms and clauses in contracts can help businesses, particularly those in heavily regulated industries, stay compliant with regulations and legislation and protect against legal issues.
With the introduction of GDPR and much of the world following a similar suit in regards to legislation, data privacy is a hot topic. Contract managers must be prepared to manage policies and procedures, all trading activity, record keeping and manage all the administrative tasks in regards to compliance regulations for all corporate data and information. Being well versed in the relevant regulatory environment can prove vital for the success of a contract.
If a contract manager is required to establish and develop policy and procedures around contract management, there has to be a system in place to manage accountability and compliance. By integrating an automated system, a contract manager can audit and track every step of a contract change and hold both employees and third-parties accountable for their actions and gives the business some security against non-compliance.
A successful contract lifecycle has to be tightly controlled by the contract manager, this includes operating best practices at every stage. To implement best practices and improve the workflows involved in the contract management process, there needs to be continual contract reporting. This guarantees quick responses to current trends and any issues that arise during the course of the lifecycle.
By tracking critical deadlines and deliverables, a contract manager can keep full control of the contract and avoid costs to the business. For example, contract renewals are an important provision that can often be missed if there is not adequate oversight and reporting of a contract.
Implement Contract Management software
By embracing technology and automation, contract managers can streamline their procedures and processes and improve their efficiency, therefore improving business revenue. Adapting contract management software to any current framework is an essential tool, especially if there are many complex contracts that need to be managed and monitored.
Contract management software provides a consistent and robust automated process for management of contracts and the associated responsibilities. It can offer a centralized platform for storing documents and data and a framework for standards and control procedures. Automated reporting tracks important information and with complete revision history, so you can see how contracts have changed over time. You can also keep on top of all compliance management and processes by using the custom reports feature, which allows you to analyse operational data, workflows, information and documents. Having access to this complete overview of your contracts allows you to communicate and present changes to contracts and key findings to the employees and stakeholders across the business or organisation and third-parties. This can simplify the contract management process, especially with ever changing regulations, and can keep you up-to-date in the fast paced economic market.
If you feel contract management software or even just features of it would benefit your contract manager or business, then do not hesitate to contact us here at Symfact, we have the right solution to any of your contract management requirements.