How Industry Knowledge Helps Effective Contracting
Contract managers and those involved in the contract management workflow, by necessity, have a great deal of skills that are utilized in both the pre-award and post-award phases of the contracts. Some of these skills include risk assessment, contracting skills, financial or contract lifecycle management software skills, monitoring, goal setting, and negotiation skills, just to name a few. One key skill that experienced contract managers bring to the table is industry knowledge. The requirements of contracts look different from one industry to the next, and relevant experience will help considerably in all phases of a contract's life cycle. Below are four of the key benefits relevant industry experience can bring:
Conform with Industry Norms and Customs
Having a detailed understanding of industry norms in contract management can save a company a lot of grief down the road. The reality is that there are still many segments of the economy that have a certain way of doing things and whether, by necessity or choice, they are not flexible. Because of this, when it comes to proposing contract terms, it is important for companies to ensure they understand the industry’s norms and customs. Obviously, there is no hard and fast rule that companies have to abide by all industry standards and traditions. However, by acknowledging that these customs exist and understanding that they tend to dictate the way in which affairs are conducted, including how contracts are negotiated and drafted, contract mangers can better navigate the waters.
Promote Legitimacy and Reputation
In addition, to relying on an expert to ensure that potential contracts align with industry standards, having someone with solid industry experience participate in meetings with key players will also promote the company’s legitimacy and reputation within the particular sector. A new company can easily get blacklisted if it tries to bulldoze its way into an arena without an adequate sense of how things usually operate. The initial negotiations for a proposed contract set the tone for the ensuing relationship and transaction, so it is very important to have the right person or people with the appropriate industry knowledge representing the company from the beginning.
Obtain Maximum Opportunities and Advantages
Contracting, forming partnerships, growth, and lasting success are dependent on constantly learning about the market, adjusting to meet changing expectations and demands, and networking with the right people. By delving into the market with a strong team at the outset, companies are more likely to earn respect and make the necessary connections that will continue to provide them with opportunities for growth and expansion.
Stronger Post-Award Contract Performance
Post-award contract management is often the most crucial but most overlooked aspect of a contract's life cycle. A contract manger who has in-depth industry knowledge will help ensure nothing falls through they cracks. Not only will they better understand the contract terms and deliverables, but linked they will also have a better understanding of the timing and steps required to meet the terms.
They will also have a better understanding of the timing and steps required to meet the terms.
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