5 Key Actions of Strategic Contract Managers
Contract managers will always engage in the negotiation, implementation, and management of a company’s contracts to some degree. However, the role of a contract manager has been gradually changing as the global economic landscape continues to shift and evolve. These days, a contract manager must do far more than serve in an operational capacity, as they had traditionally done for quite some time. Now, the scope of a contract managers's day-to-day responsibilities also entails a great deal of strategic evaluation, planning, and execution. Contract managers must, of course, continue to manage contracts diligently, but they must also actively monitor compliance, analyze performance, and make strategic changes as appropriate in order to promote the growth of the company.
In light of the importance of contract management in improving business performance, the following are some key actions that strategic contract managers must take in order to help their companies succeed:
Leverage Contracts to Improve Company's Bottom Line
There is no doubt that a company’s contracts can have a drastic impact on its balance sheet and profit generation. Contract managers must ensure that the contracts in which their companies choose to enter, contain the most favorable terms and offer the best value for the particular good or service. Ultimately, contract managers must make decisions regarding contractual commitments with a keen focus on improving the company’s bottom line.
Analyze Competitive Landscape
In some industries, the supply of options may be somewhat limited. For the most part, however, there are sure to be multiple competitors within the relevant sector vying for business. If there are quite a few similar options available, contract managers must not be afraid to negotiate aggressively or change vendors if necessary to attain the best deal possible for the company. It is vital for managers to pay close attention to the competitive landscape to ensure the company stays ahead of the curve.
Advise Executives of Business Opportunities
Depending on the success or shortcomings of contractual performance, both internally and externally, a contract manager can determine new markets to explore as well as areas of the company that may need scaling down or reworking. A manager must consistently analyze contract performance to gauge whether the company is adequately exploiting its business advantages if any. And managers can use this information to help assess whether new approaches are necessary for the company to gain a competitive edge.
Assist Leaders with Strategy Execution
Strategic contract managers are always attuned to market trends within the company’s relevant industry. Also to remaining apprised of pertinent business developments, managers must have a direct line to executives and key decision-makers and should be a part of the company’s strategic planning process. In general, managers have a strong sense of the business environment and potential risks, and they must use this knowledge to help leaders formulate and execute business strategies.
Facilitate Company's Achievement of Goals
Regardless of whether a company is seeking to cut costs, enter new markets, or expand its client list, among a host of other possible aims, managers can use their understanding of the company’s existing obligations to facilitate the company’s achievement of its goals. Additionally, a contract manager will tend to have sharp negotiation, organization, and assessment skills, which can be used to help the company tailor its objectives and create performance indicators to determine whether they are being accomplished.