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10 Top Tips for Optimal Contract Management

Contract Management System

Is this the year you are intending to get full control of your contract management?

Here are our 10 top tips to help contract managers optimize the performance of their contracted services.

1. Do you have clarity on what the contract is meant to be delivering? All too often contracts are not clear on this. Have you engaged with the key stakeholders to understand what outcome they are after and has this been communicated effectively with the supplier, perhaps in the form of a Service Level Agreement?

2. Are you handing the supplier an excuse for not performing? If the supplier requires information or support from your organisation to deliver the contract, make sure you provide it accurately and on time.

3. Making full use of supplier expertise? Presumably you have chosen a supplier because they are experts at what they do and will have experience of doing it elsewhere. Draw on that expertise and experience to see how you could improve. The supplier will probably have some great ideas that they are happy to share.

4. Build strong, respectful working relationships. Is your supplier relationship culture one of co-operation and collaboration or is it characterised by confrontation and animosity? Does your supplier see it the same as you. Rarely will a confrontational approach reap the benefits of continuous improvement.

5. Do you understand the risks associated with the contract and is action being taken to mitigate these risks? Regularly review the risks of the contract not delivering what it is meant to and measure this in terms of likelihood and impact. Engage with stakeholders to check their view on the current risk status. They may be in a position to identify new risks at an early stage. When a significant risk is identified engage with the relevant stakeholders to identify and implement risk mitigation actions.

6. Do you know what all stakeholders think of the contract performance? You may think the contract is performing well but some other department in the organisation may be pulling their hair out. Think hard about all the stakeholders who may be impacted by this contract and try to gain their views. Often they will be delighted to know that someone is willing to listen.

7. Is supplier performance being monitored? Obtain performance reports from all stakeholders and maintain a record of contract performance and use this information to inform the business of overall contract performance.

8. Are you managing the most important contracts? Contract management resources will be scarce so you need to ensure that you are putting most effort into those contracts that are most critical to your organisation as a whole.

9. Do senior managers review contract performance? Your most important contracts will have a significant impact on your organisation if they are working well or are working badly. Is contract performance and risk being reported to senior management and are they reviewing this?

10. Is contract information being efficiently filed and easily retrievable whilst being secure? Contract administration and management become much more efficient if everyone knows where all contract documentation is stored and is easily retrievable by only those with authority to do so.

This list is by no means exhaustive but will provide an excellent starting point for managing your key contracts. For further information, contact our team who will be more than happy to advise you more on our products and services and set you up with a free trial. You can also enroll in our e-learning module “An Introduction to Contract Management”.

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