5 Tips for effective Contract Management: TechnologyHQ

Successful Contract Management strategies depend on a variety of fluctuating factors. Supply Chain Management take note. Here are 5 from TechnologyHQ

Contract Management has gone from once keeping dusty paper in office backroom shelves to the cutting-edge of everything inluding driving down costs to streamlining processes and using technology to supercharge organisational efficiencies.

More recent developments have seen that the things like ESG and D&I compliance considerations have now become a part of the fabric of Contract Management, leading to a now-unavoidable awareness that effective Contract Management is essential to modern businesses - and an essential part of supply chain management.

A recent article by TechnologyHQ has presented its own advice on achieving successful contract management, and the list is not a surprise.

The information concerning effective management of contracts is now almost ubiquitous - which should mean that organisations from procurement to supply chains have more than ample data concerning their implementation.

To reiterate that which needs reiteration, here are 5 tips for effective contract management as presented by TechnologyHQ: 

1. Invest in the Right Tools

From managing and monitoring contractor performance, to tracking certifications, licenses, and ensuring compliance with safety regulations, the right tools are necessary to effective contract management.

TechnologyHQ states: "It can also help reduce costs associated with contractor management, such as time and money spent on background checks and training.

"Additionally, it can help organisations reduce the risk of non-compliance with the law and streamline the contractor onboarding process. Utilizing a contractor management system can ensure a successful project and help organisations grow and organise their contractor network quickly and efficiently."

2. Get the Right People Involved in the Process of Managing Contractors

According to TechnologyHQ: "Working with independent contractors can be daunting without adequate people in place to manage them. Successful performance depends on the establishment of the right team of professionals to handle the work. A reliable project manager is vital for day-to-day process oversight, and HR staff need to be diligent in selecting qualified workers, setting deadlines, and monitoring progress.

"In addition to this, legal advisors should ensure that all contracts are valid and up to date for compliance purposes. With the proper personnel in place, managers can use available resources and leverage contractor input for successful outcomes."

3. Track Progress and Performance

The article states: "In order to ensure the successful completion of any project that involves contractors, it is essential to track progress and performance. Setting checkpoints in the process can help monitor and manage any issues that arise for both parties. This not only contributes to a mutual understanding between the contractor and the business, but it also helps to keep projects on track by allowing quick corrective action when things don’t go according to plan.

"This also establishes trust between both parties and allows further collaboration. The outcome of such an approach is better quality work with reliability and productivity over time while helping everyone involved understand their roles clearly."

4. Manage Changes to the Contract Throughout Its Lifecycle

"Managing changes to the contract throughout the lifecycle involves keeping track of any modifications and making sure they are properly documented. This may include topics such as updating terms, ensuring everyone involved understands their role in fulfilling the contract, reviewing points of contention, assessing changes in tax laws or regulations, and addressing additional costs or provisions independent of the initial agreement."

5. Be Prepared to Negotiate Terms and Conditions

The article point to the statistic that, "around 80% of companies have no formal negotiation process when it comes to negotiating terms and conditions with their contractors." It says: "This can be a mistake, as it leaves the door open for disagreements and confusion. Having a clear and concise negotiation process is key to ensuring that both parties are on the same page. This can include setting clear expectations for the contractor’s performance, outlining the payment structure, and making sure that all documentation is properly filled out and signed.

"Negotiations should also include open dialogue so that both sides are able to express their opinions and come to an agreement that works for both parties. Having a formal negotiation process in place can help ensure that all parties understand the terms and conditions of the agreement, and can help prevent costly disputes down the road."

TechnologyHQ emphasises that managing contracts effectively is essential to achieve success in any organisation. It says: "The tips outlined above provide a framework for establishing good contract management processes in your organisation. Of course, there will always be variations from one situation to another and it’s important to tailor the strategies to your specific needs. However, if you keep these five key points of contract management in mind when developing and implementing a successful strategy for success, you’ll certainly be on the right track."