Lifecycle. Process. Whatever you call it, effective contract management is a series of actions that guide you from the beginning stages of developing holistic processes for handling each and every company agreement, all the way through the steps to seeing contracts through to their conclusion. Understanding what happens at each stage is critical for ensuring that your contract management processes meet all of the requirements and objectives in order to deliver optimal results.
The seven stages of Contract Management graduates are as follows :
1. Stage of Preparation
Before you can implement a process, you must first create a system that is appropriate for your company’s needs and resources. It’s also critical to develop contract management processes that can be implemented company-wide to keep things streamlined and organized. Your contract management strategy is a flexible roadmap that includes processes for all types of company agreements, from standard employment contracts to paperwork from highly specific and complex deals. The first step in developing your strategy is determining your needs, which includes answering the following questions:
- What kinds of contracts do you have to manage, and how many of them do you have to manage?
- Do you have any standard agreements that you use on a regular basis?
- What should be included in these?
- Who is currently in charge of each stage of contract management, and what do they require to do their job?
- What common issues have arisen in the past, or what issues might arise during the administration of a typical contract?
- What resources are required to put your contract strategy into action?
2. Stage of Implementation
After you’ve defined your contract management processes, you’ll need to put them into action before you can use them. This includes deploying contract management software to assist you with contract-related tasks and migrating your contracts to a centralized repository. Onboarding is an important part of your implementation strategy because it ensures that everyone involved understands your vision and objectives.
3. Stage of Pre-Contracting
Now that you’ve established your contract management foundation, you can start implementing it for new contracts. This includes creating new contracts or implementing boilerplate agreements for more common situations. The main challenge of this stage of contract management is creating a specific document that will deliver what you need while lowering your risks.
In most cases, this stage can be as simple as selecting the appropriate contract type, entering the necessary information, and possibly making a few changes. More unusual or complex contracting scenarios may necessitate the creation of an entirely new document. Looking at other agreements that may be applicable and adapting those terms can make developing a contract from scratch easier. Remember to include any critical requirements, such as compliance obligations or branding standards. E-signatures can help you keep things moving after you’ve agreed to the terms and created your contract.
4. Stage of Handover
It is common, especially in larger organizations, for the individuals involved in contract execution to be different from those who negotiated it. As a result, ensuring a smooth handover is critical to ensuring the contract is fulfilled as expected. Rather than assuming that stakeholders have everything they need, it’s a good idea to go over all of the contract details and confirm roles, responsibilities, and milestones.
5. Stage of Contracting
If you manage your contracts properly, the contract stage is when all of your contracts’ goals come to life. And much of the contract management work you’ve done so far is preparing you for just that.
6. Stage of Pre-Renewal
Nothing lasts forever, including your contracts. However, your agreements may be terminated in one of several ways: One-time agreements may come to an end naturally, you may renew an agreement, or you may choose to terminate it. There are often specific terms – and possibly penalties or default actions if you do nothing – that can affect the outcome, which is why it’s critical to start thinking about the end of your contract in a proactive and timely manner. Now is the time to assess how your contract performed and decide whether to renew it or make changes. Make certain that all stakeholders are aware of the termination and renewal dates, and that you have sufficient time to consider all options.
7. Stage of Contract Termination
When a contract expires, there is still some housekeeping to be done to ensure that everything is properly wrapped up. This includes checking for termination conditions, issuing or paying final invoices, and archiving your contract. A contract post-mortem can also provide valuable information and learnings that can improve the outcomes of future contracts.
This informative blog sheds light on the important stages of Contract Management that the system graduates through to deliver the outcomes that it does. EffiGO ensures that the processes are followed right through to optimize the output of their deliverance of services.
