In order to manage contracts successfully, the organization’s management needs to make certain choices. These choices relate to different areas and various levels within the organization.
The success of contract management depends on three factors:
- Contract management policy and contract management processes
- Sufficient and competent staff and process-supporting systems
- Contracts that are created with the desired contract management approach in mind
Policy and processes
Organizations wanting to structure and implement contract management professionally, establish a contract management policy. This contract management policy includes, among other things, the contract management process based on the CATS CM® methodology. A process owner is appointed, who will structure and safeguard the process. By applying CATS CM®, an organization will be able to carry out, structure, and document contract management procedurally at an operational level.
People and systems
To ensure an effective contract management process, it is important that the organization has sufficient and competent staff available to carry out the required work. It goes without saying that these people must have the right attitude. When the contract management policy includes clear definitions of the various roles involved in the contract, and clearly describes the elements of the process, the competencies required for the various roles can also be derived from them.
When the execution of contract management also includes the use of (automated) systems, the organization will have to make sure that they are aligned to the defined process.
To ensure sound contract management during the execution phase of a contract, the quality of the contract is a prerequisite. During the contract creation phase, within the procurement or selling process, the contribution of contract management knowledge must be safeguarded. This means that sufficient attention must not only be given to things like a well-defined translation of the contract objectives into contractual performance, but also to adequate consequences when contractual performance doesn’t meet the agreed standards.
Successful contract management
Contract management becomes successful when the organization’s management makes choices that focus adequately on all of these areas. Again, it is crucial that the organization’s management supports and communicates the choices that were made!
This is the third blog of the series ‘Contract Management with CATS CM® in a nutshell’, in which we guide you through an overview of our vision and methodology. Do you have any questions for Linda Tonkes and Gert-Jan Vlasveld, the authors of the book Contract Management with CATS CM® version 4? Then please send an email to email@example.com!