Contract management is one of the biggest responsibilities for businesses of all sizes. Efficiently managing your contracts has a direct positive impact on your financial performance, your relationships with third parties, and your organizational reputation.

According to IBM, the average Fortune 1000 company may have as many as 20,000 to 40,000 active contracts at any given point in time. With so many contracts and related documents to keep track of, effective contract management is a must.

In this article, we’ll discuss five of the most important traits and skills for contract managers to have, so that you can achieve effective contract management within your own organization.

It’s a claim you’ve likely heard before: with such a large proportion of revenues tied to contracts, making the contract management experience a seamless one represents a key opportunity to improve bottom lines for many companies.

But in order to truly understand the business benefits of improving your approach to contract management – and to start to turn potential gains into actual ones – it’s helpful to unpack the statement and define both what seamless contract management looks like and the value it can deliver.

For a vast majority of companies, revenue depends — in part — on contracts with vendors and customers. That's why the effective and efficient management of these contracts is critical to business success.

For businesses looking to optimize their approach to contract management, there are numerous software solutions on the market that can help. As you evaluate the options, here are some important considerations.

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 management is an important business operation, but the members on the contract management team likely feel that it can be a rather thankless position. Unfortunately, many company leaders are so embroiled in other facets of the business that they overlook the significance of contracting. This is no doubt an unintentional oversight, but one that can nonetheless negatively impact the entire contracting process. Regardless, contract management professionals must not lose sight of the importance of their role and can even take steps to demonstrate the value that they add. Here are 5 tips just for contract management professionals:

This is the fifth and final installment in this blog series. Click on the links below to access any of the other four entries: Part 1, part 2, part 3, and part 4. 

Contract management requires quick thinking and a keen attention to detail. As a result, it is crucial that a company's contracts are drafted well. Here are some things to consider when drafting contracts to ensure that the final agreements are actually manageable.

For quite some time, negotiating and drafting contracts and the ensuing management of those agreements was a complicated (albeit primarily administrative) process. Different people within a company handled different steps in the contracting process, and communication among those members was usually less than ideal. As a result, contract disputes became all too common and companies spent a fortune on enforcing, litigating, and rectifying contract breaches. 

Change is inevitable. And, just because contracts are supposed to be fixed agreements does not mean that they will escape this inevitability. Circumstances change, needs change, prices change, technology changes, demands change, and basically anything contained within a contract is subject to change at some point. Changes to a contract may not be ideal, but it is bound to happen eventually, and it is an increasingly frequent occurrence. Obviously, contract changes complicate the contract management process, but it does not have to derail things altogether or lead to disputes. Here are a few simple ways that the contract management team can effectively handle contract changes:

Running a business involves multitasking, prioritizing, and constantly revisiting how best to multitask and prioritize. More often than not, there simply aren't enough hours in a day,to get everything that they need to do done. Certain things get postponed to the next day or the next week or even the next month. Because of the constant juggle, people have a tendency to put off doing things that don't seem pressing in the immediate future.