Contract management as the heart of your organisation

Although contracting is the backbone of any organisation, contract management runs amok in many places. This is mainly because contracting is seen by many as an exclusively legal matter. As a result, contract management is outside the heart of the organisation and this is precisely where things go wrong.

Contracting is the lifeblood of any business, but that does not mean it gets the attention it deserves. In smaller organisations, the emphasis is often on business and people often persevere in the belief that as long as the relationship is good, the contractual side of a partnership will be fine. Here, the contract is often seen as something you fall back on as soon as the relationship is disrupted. 

In larger organisations, the dynamics move in the opposite direction. Here, they recognise the importance of contracting and often have a dedicated contract manager on board. Here, the outline of a partnership is often set from the business and the legal framing is a largely delegated responsibility. In both cases, contract management loses touch with the heartbeat of the organisation.

Contract lifecycle management

Contract lifecycle management sounds like a pompous term, but it is not particularly difficult. Contract lifecycle management means as much as managing contracts through their life cycle. It means the process from drafting to signing and from management to renewal. A system - however basic - gives you a grip on your contractual obligations. This is important. Contracts are not just a legal piece, but the guardrails of your commercial growth, mitigating your risks, ensuring your continuity and the basis of sustainable partnerships.

Examples of poor contract management abound. Think of turnover leaking away due to poor logging of contractual agreements or poor communication between departments. Think, for example, of a delivery team that implements a product but does not transfer this properly to the administration, resulting in a customer having access to the product but not receiving an invoice. Another example is a level of liability that exceeds the amount of your insurance or not capping the annual indexation of suppliers. The consequences of not having a grip on your contract processes are significant and this can seriously add up. This is not something you want to leave to chance.

Contract management at the heart of the organisation

Contract lifecycle management goes to the heart of your organisation, ranging from commercial growth to supplier cost increases. It should therefore be more than a legal framework for a collaboration and be right at its heart.

Contract lifecycle management therefore goes beyond simply logging rights and obligations. However flawed, many organisations do the latter at least somewhere centrally in an Excel file or a makeshift dashboard. More important than keeping track of these agreements, is the collaboration around them. For example, hooking, informing and picking up approval from the right people at the right time in the process is crucial. At Docfield, we do this with technology that allows you to control the process around drafting, agreeing, negotiating, signing and managing a contract in a central platform. This ensures there is a clear owner for each part of the process, defined handover moments and the ability to collaborate with external parties.

The importance of a good reputation

Docfield is just one example of technology that anchors contract lifecycle management at the heart of your organisation. Exactly which technology you deploy is not important as long as you get a grip on your contracting process. If you have this under control, it will have a direct impact on your company's reputation. 

After all, the professionalism with which you handle your contracting is a reflection of your maturity as an organisation. Contract lifecycle management ensures you have control over the perception the outside world has of your company. With good tooling, for instance, you guarantee the correctness and uniformity of your pricing and conditions and ensure compliance with internal and external guidelines. This is important. After all, contracting is one of your company's most important business cards and you often only get one chance to present this business card to a customer.