Contract managers and project managers are integral members of many business teams. Although their roles and responsibilities are similar, and in some instances may even overlap slightly, these are distinct positions requiring unique knowledge and skills. For simple contracts and projects, it is often possible and economical to utilize one team. However, for more complex endeavors, it is generally best to rely on separate teams with content-specific expertise. Here are some key differences between contract managers and project managers.
Contract managers solely focus on the contracting process. For companies that regularly enter into contracts with other firms and/or clients, it is imperative for the contracting cycle to be tightly controlled. Incompetent negotiating, ill-written contracts, and/or lack of oversight can result in serious breaches, which often lead to costly contract disputes. An appropriately trained contract management team will help ensure that contracting partners are properly vetted, the agreed upon contract terms are fair and beneficial to all parties, and the risks associated with any contracting relationship are mitigated.
Contract managers must be adept at research, risk analysis, and cost-benefit assessments. Keen attention to detail and fastidious organizational skills are also vital. Contract managers often work in conjunction with the legal and financial teams of a company given the legal ramifications inherent in the contracting process. As a result, they must have a strong understanding of the risks of each prospective contract and the potential legal and financial consequences associated therewith.
In virtually all contracts, time is of the essence, so contract managers generally rely upon purpose-built contract management software to facilitate oversight of a company’s contract portfolio. A robust contract management solution simplifies the tracking of important contract matters such as critical deadlines, delivery schedules, and renewal or cancellation provisions. In addition, an online contract database can serve as a secure, central repository. This streamlines collaboration among the internal contract management team, and it facilitates communication with external parties as well.
Project managers may be involved in the contracting process in some fashion, although that usually is not their primary focus. Entering into a contract may be one part of a larger project, but project managers are generally responsible for monitoring the progress of the project in its entirety. For example, project managers often oversee the development of a good or product or the launch of a specific service or software. Thus, project managers may help source parts, establish a budget, and create a timeline for the project completion. Throughout the life of the project, project managers often play a crucial role in just about every facet of the process.
For this reason, project managers, like contract managers, must be highly detail-oriented, punctual, and organized. Project managers often coordinate with contract managers with respect to any contracts that are created in relation to a project, and thus they likely access the same contract management software. Of course, given the breadth of their responsibilities, project managers no doubt utilize other technology as well, such as a virtual data room (VDR) to safely store and share project data and customer relationship management software (CRM) to monitor customer interactions.