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.
About the Job
According to an International Association for Contract & Commercial Management (IACCM) survey, contract managers typically report to either finance, legal, business operations, or sales and marketing. This role works to ensure that each contract is properly monitored and all deliverables are met according to the agreed upon terms. Contract managers are responsible for every phase of the contract lifecycle after the contract has been drafted, negotiated, signed, and transitioned from the contract administration team. For smaller companies without a dedicated contract administrator, contract managers may have to take on additional responsibilities.
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.
It is expected that contract managers will keep track of all important details of an agreement, including things like key deliverables and milestones, dates, deadlines, and opt-out/negotiation windows, and termination or cancellation requirements.
Contract managers are also expected to understand the contract portfolio as a whole to identify trends and implement processes improvements when needed. Part of this process is ongoing contract reporting, and presenting key findings to various stakeholders throughout the company.
Characteristics of a Good Contract Manager
Managing contracts can be a challenging job, but having the right skillset can help succeed in the role. Here are some common characteristics of a strong contract manager.
1. Time management
Appropriately managing contracts throughout their lifecycle takes time, so good contract managers typically excel at time management and find ways to optimize the contract management process for greater efficiency.
2. Risk management
Contract management and risk management are inherently tied together. Every time you enter into a new contract you accept some level of risk, so understanding how to protect your organization and reduce unnecessary risk as much as possible is critical. By keeping a close eye on contract dates and deliverables, you can keep your team on track and help mitigate any potential issues before they develop into significant problems.
3. Understanding the compliance landscape
Similar to contracts and risk, contracts and compliance are also very closely related. In many cases, staying on top of the terms laid out in contracts helps keep your company compliant with applicable laws and guidelines, which is why strong contract management is especially important in regulated industries like healthcare, finance, and manufacturing.
4. Attention to detail
Minor details can make or break an agreement. A good contract manager will have a keen eye for detail, and can help identify any errors or typos in contracts that could lead to major problems if not addressed early on. Contract managers often rely on contract management software to help track the details of an agreement, and make sure no important deadlines are missed that could cost the business.
Companies that have a large contract portfolio or are responsible for high-value or high-risk contracts often turn to dedicated software for help managing these important agreements. Because of this, it’s helpful for contract managers to have at least a basic understanding of how to use the software solutions that allow you to successfully maintain your contracts and obligations.
Tips for Success
Whether you’re a brand new contract manager or have years of experience, everyone has room to improve. Here are some tips for success in a contract manager role.
1. Develop the right professional strengths
The characteristics listed above are important for the job, but just because you don’t excel in all of those areas right now doesn’t mean you can’t get there. Understand your professional strengths and weaknesses and be willing to address any areas that might be holding you back.
2. Communicate and collaborate
Contract managers must be able to effectively communicate with team members across the organization to keep all relevant parties up to date with important contract information. Contract managers should also be able to translate the complex legalese found in most agreements into easy-to-understand language for colleagues outside of the legal department.
3. Become both a company and industry expert
The more you can learn about your company and the industry you work in, the better. Make a point to learn as much as you can about your company’s leadership team, your customers and vendors, the regulatory environment, the contract management performance metrics key stakeholders care about most, and anything else that will give you a better understanding of how the company operates.
4. Embrace technology
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.
About the Job
Project managers play an important role within any company, working closely with teams across the organization to ensure projects are successfully completed from start to finish. Project managers are responsible for keeping projects on track according to the timelines, budgets, and goals established at the beginning of the initiative. Ultimately, a project succeeds or fails based on the project manager’s ability to allocate resources, solve unexpected problems, communicate with stakeholders, and hold all team members accountable for their specific pieces of the project.
Project managers are expected to facilitate the successful execution of new projects within the scope outlined by key stakeholders, which often includes company leadership and senior members of the project team. The project manager serves as the primary point of contact for team members throughout all stages of the project, and is expected to know the status and progress of each individual task, deliverable, and milestone. If any problems arise during the course of the project, the project manager is expected to find an appropriate solution that will get the team back on track.
Characteristics of a Good Project Manager
Here are some of the characteristics of a good project manager.
Leadership and project management typically go hand-in-hand. Since project managers rely on many other teammates to successfully complete the project, it’s imperative that you understand how to motivate your colleagues and get buy-in so everyone is committed to accomplishing the goals according to plan.
Effective communication is one of the most important characteristics of a good project manager, as your ability to clearly convey expectations, timelines, and goals can shape how the project plays out. You also need to be able to communicate updates to stakeholders so everyone involved understands exactly where the project stands along the way.
3. Problem solving
Every project manager will have to problem solve at some point during just about every project you’re involved with. If you can plan ahead and take into consideration the possibility that things won’t go exactly as planned, you’ll be in a better position to react when those problems inevitably arise. How you respond to bumps in the road is a strong indicator of how the project will turn out.
4. Task management
Good project managers work with various team members to understand the tasks each person is responsible for so they can provide adequate support and establish realistic timelines. It’s important to regularly check in with each person involved so you know that individual tasks are on track and that there aren’t any roadblocks that could lead to costly delays.
Because there are so many moving parts to a project, strong organizational skills are a must for any project manager. Projects that aren’t extremely well-organized are more likely to experience delays, cost overruns, team member confusion, and other issues that can derail the project. Just like contract managers often adopt software to help keep track of important details, project managers also invest in dedicated software to help stay on track and in control.
Tips for Success
Becoming a good project manager takes work. Here are some tips to help you succeed.
1. Build relationships with colleagues
As mentioned, project managers rely on every member of the team to contribute and do what they say they are going to do in order for the project to succeed. Building strong relationships, and celebrating individual and team victories, will help the group function better together and feel a sense of commitment to you as the project manager, each other, and the project itself.
2. Fill in knowledge or skill gaps
Similar to contract managers, it’s ok if you aren’t as strong as you’d like to be in every skill needed to be an excellent project manager. If there are certain areas of the job - or a specific project - that you aren’t confident about, put in the time and effort to learn and improve in the relevant areas.
3. Ask questions
Communication often breaks down because of confusion or a lack of clarity. If there are any points during the project where you aren’t one hundred percent clear you understand something, ask questions. Moving forward without being on the same page as your teammates can lead to avoidable issues.
4. Keep detailed notes
As project manager, you’re likely going to have dozens of meetings, both as a group and with individual team members, throughout the life of the project. Part of your job is to document every update, question, and concern along the way, so make sure you keep detailed notes of every discussion you have pertaining to the project.
Contract managers and project managers share many of the same responsibilities and challenges, but ultimately have different roles and functions within an organization. While project managers are responsible for working with cross-functional teams to closely manage new initiatives from start to finish, contract managers are responsible for keeping track of every deadline, deliverable, and other obligations laid out in a company’s contracts.
ContractWorks Contract Management Software helps contract managers store, organize, monitor, and report on your corporate agreements in less time using fewer resources. Schedule a demo to learn more about how ContractWorks can improve your contract management process.