ArticleMap.com

Contract Management Made Simple

What is a contract? A contract is simply a legal agreement between two entities or parties. These entities can be corporations, small businesses, and even individuals. So why do companies need to manage contracts and agreements? They need to be managed to make sure what is agreed upon in the contract is completed and that all the provisions of the contract are adhered to. These provisions include, but are not limited to, the contract budget, work specifications, the quality of the work to be accomplished, and the due dates. Some provisions can be extremely complex, such as in meeting government compliance requirements. Contract Management is very similar to Project Management. Just like in project management, you need to make sure all items are done correctly, done on time, and within budget. Thus, the need for managing contracts.

As previously mentioned, a contract is simply an agreement between two parties. Party A agrees to build an addition onto an office building for Party B. They agree that this will be completed in three months for $75,000. They also agree that the new addition will be able to hold ten office worker cubicles and have a supply closet and bathroom. The new office must match the interior and exterior colors and materials of the existing building, and it must meet all government-building codes. So how do we make contract management simple?

First, the contract itself needs to spell out exactly what is to be accomplished and detail all the provisions and specifications of the work. In contracting terms these are known as “deliverables”. You should be able to easily go through a contract and identify all of the deliverables within the contract. A deliverable is what needs to be tracked and managed. You then make a detailed list of all the deliverables in the contract. At a minimum, this list should contain each deliverable, the specific requirements and provisions of the deliverable, and the date the deliverable is required to be completed. Once you have this list put together, you can simply monitor the items on list to make sure they are completed by the specified due dates as well as meet all the requirements and specifications. Once the work is completed, the deliverables are inspected, and if acceptable, are accepted by the party who issued the contract. The contractor is paid and the contract is closed. It really is that simple.

Now I have done a lot of consulting in my career, to include contract management organizations, and I have seen many organizations make the contract management process more complex than it really needs to be. In many cases this comes from the “over complexity” of the contracts themselves. In many cases, the people who write contracts, usually lawyers, tend to be extremely verbose. Instead of spelling it out in simple terms, they dig out the dictionary and attempt to use every word that has fifteen letters or more in it. This, also, is a reason why there are so many lawsuits over contracts. Over complex contracts make it very easy to find things to go to court on. So the point I am trying to make here is to keep the contract simple. This will help you to keep the contract management process simple. My rule-of-thumb is to follow the “KISS” principle: Keep It Short and Simple!

Another tool to help you keep contract management simple is to use a solid and intuitive Contracts Management System software package, such as Contract Analyst. In a good system, you can easily enter in all the deliverables, specifications, and due dates, and it will do most of the tracking for you. It will tell you when something is coming due. It will tell you the requirements and specifications of a deliverable so when you inspect it for acceptance, you will know if it meets all the requirements. A good Contracts Management System will have built-in workflow management for coordination and approvals of all contract elements. It will also have compliance requirement tracking for those pesky, complex government requirements. A good system will be flexible enough to manage the different types of contracts, such as service contracts, building contracts, government contracts, and equipment and materials purchase contracts. In addition to flexibility, a system should be extremely intuitive so users don’t get frustrated when using it. All windows within the system should have a similar flow to each other so the users don’t have to figure out how each window works. A good system will make your life a lot easier.

Yes, contract management can be easy. The three main keys to keeping contract management processes simple are (1) keep the contract detail-oriented, but simple, (2) develop a solid list of deliverables, specifications, and due dates, and (3) use a powerful, flexible, and intuitive Contracts Management System. If you follow these three simple rules, managing contracts will be a very easy task that you won’t want to run away from. You will be able to make sure all the deliverables are accomplished correctly, within the budget, and on time.

Copyright © 2007, Gary A. Harris. All rights reserved.

Article Source: http://www.articlemap.com

The author, Gary Harris, is the founder and Director of TrakSoft, LLC , a Software Development and Consulting Firm with international reach. They design and develop commercial software and web sites for the private and government sectors. Additionally, TrakSoft, LLC, provides IT and Management Consulting Services. TrakSoft’s premier product is Contract Analyst, a solid and proven Contracts Management System.

Please Rate this Article

Not yet Rated

Click the XML Icon Above to Receive Management Articles Via RSS!

Additional Articles From - Home | Business | Management

Conflict Between the ER and HRM - By : Robert II Smith
Computerization of Modern Management - By : Robert II Smith
Effective Management of Budget - By : Robert II Smith
Basics About Asset and Liability - By : K Singh
Interim Management – The Dynamic Demographic - By : Daniel Day-11606
Definition of Management Development - By : Robert II Smith
Post-modern Theories of Management - By : Robert II Smith
Business Budget Management - By : Robert II Smith
International Human Resource Management - By : Robert II Smith
Performance Management - Five Factors for Success - By : Russ Silva

	Print This Article
	Post Comment
	Add To Favorites
	Email to Friends
	Ezine Ready

Submit Articles
Member Login
i Top Authors
Most Popular Articles
Submission Guidelines
Ezine Notifications
Article RSS Feeds

Press Release
About Us
Link To Us
Contact Us
Privacy Policy
Terms of Service

Highly Recommended:

Sponsored Ads:

Recommended Hosting

Related Sister Site:
Submit Health Articles Now