Minimizing Contractual Risk Through Improved Contract Management Practice

Legal contracts are foundational for companies of any size and industry. By codifying the exact relationship between a business and its customers, contracts place weight behind the promises that both parties make to each other and provide a framework for handling disagreements.

Unfortunately, far too many companies are failing to live up to the best practices and standards of contractual risk management. The International Association for Contract & Commercial Management, for example, estimates that companies lose nine percent of their total revenue every year via poor contract management.

From a complex contracting landscape to scarce investments in good contracting processes, the potential issues that you'll face are significant. The following article will give you an overview of the challenges of contract management and what you need to do to make your processes more efficient and productive.

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A Brief Guide to Contract Management Software and Plans

Anyone involved in contract management needs to learn the basics first. At its simplest, contract management is about tracking performance and addressing any issues throughout the duration of the contract. A Report from the Journal of Contract Management found that 71% of companies misplaced 10% of their contracts. In 2015, the International Association for Contract and Commercial Management (IACCM) suggested that new technology could spark a contract management revolution, but only if businesses are ready to fully embrace the new tech's potential.

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4 Best Practices for Contract Management Software Implementation

For companies that have not yet made the transition to a cloud-based contract management solution, taking the time to initiate this change may seem like a daunting prospect. Depending on the size of a company’s contract portfolio and the number of personnel devoted to contract management, moving a large quantity of files and documents over and then learning how to use a new software system will inevitably take a bit of time. One of the best things the contract management team can do is plan for the implementation process to ensure adequate preparation takes place in advance of the switch. Here are four best practices for contract management software implementation:

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5 Tips to Improve Enterprise-Wide Contract Management

For many companies, contracts are handled at a departmental level without much oversight vertically or laterally. There are certainly advantages to this divide and conquer method, but fragmentation of the contract management process can prove quite problematic as well. Ideally, companies should implement a high level contract management system that still allows for some segmentation without causing a confusing, disparate approach. Here are tips to improve enterprise-wide contract management:

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Scope Creep: 3 Steps for Handling and Preventing It in Contract Management

Suppose that you want to build a new home for your family. First, you get in contact with a construction company. You inform the workers there that you want a house with three bedrooms and two bathrooms, draw up some plans and tell them to get started right away. Six weeks into the project, however, you realize that you need space for a home office, you want to move the location of the kitchen and you'd also like to add a pool in the backyard.
 
Just like that, you've fallen victim to scope creep, which is an ever-present concern whenever you embark on a project of substantial length. Of course, it's good to be flexible and open to change, and a certain degree of scope creep is inevitable at some point for contract managers. However, you also need to know how and when to put your foot down to prevent a project from spiraling out of control. These three tips will help you limit the amount of scope creep in your contracts so that you can keep yourself and your vendors, suppliers and clients happier.
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4 Key Contract Performance Metrics

It is often difficult to discern the success of a contract when the subject matter of the agreement is more complex than the delivery of a single item in exchange for a payment. A lot of business contracts can last for several years and may involve a series of actions, deliveries, and/or payments from one or both sides. Nonetheless, contract performance is critical to managing a company’s contract portfolio, and it obviously has significant influence on the bottom line. As a result, the contract management team must have clear metrics by which to measure performance. Here are four key metrics that can be used to evaluate contract performance:

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6 Things Contract Managers May be Overlooking

Contract management is a complex task, especially in large organizations that have large volumes of contracts. Contract managers strive to supervise performance goals, financial benchmarks, and risk management. Be sure to watch for these commonly overlooked areas of contract management.

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How Contract Management Services Can Drastically Improve Automation For General Counsel

Contract management is a complex, ever-evolving part of general counsel’s workload. Automating as much as possible can make the entire contract management process run more smoothly. A responsive contract management service should offer opportunities to improve automation throughout the contract lifecycle.

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The 4 Step Process to Generating an Increased ROI With Contract Database Software

Understanding the potential ROI of contract management software is an important precursor to a company’s decision to purchase it. Equally important is knowing how to implement a plan to use the new software effectively. Companies don’t have time to waste floundering through tutorials. They want to see ROI fast. This guide will cover some key areas to focus on to get results as quickly as possible.

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Alleviate Rising Costs By Improving Your Supplier Contract Management Practices

Saving money is a constant concern for many organizations. Taking a critical look at what the organization spends on necessary--or unnecessary--supplies is a good place to start. Organizing the supplier contract management process can reclaim potential savings and minimize unnecessary expenses.

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