Contract management’s lifecycle process involves more than developing agreements and getting the involved parties to sign them. It includes action series guiding the contract formation from the first initial stages of developing holistic protocols for handling all the company agreements through to seeing the implementation of the contract steps till a conclusion is met.
It is essential to know what should occur in every contract management stage to ensure that all the requirements and objectives are adequately met for optimal results. Several basic steps give the proper guidance in the undertaken contract management process, including; planning, implementation, pre-contract, handover, contract, pre-renewal, and post-contract stage.
1. Planning stage
It is always crucial to develop a systematic process before taking on the implementation process to ensure that all the company’s or firm’s needs and resources are adequately covered. Ensuring that all the issues are well organized and streamlined requires developing a contract management process that is easily implemented throughout the company.
A contract management strategy entails flexible roadmaps that consist of the accounting processes for all the types of company agreements, including specific complex deals, standard employment contracts, and associated paperwork. The initial step of any strategy development involves determinations of any particular needs and answering questions like:
· What are the volumes and contract types that are to be managed
· Does the firm have standard agreements that are often used, and what is needed inclusivity?
· Who are the stakeholders responsible for handling each contract management stage and their particular needs for prolific job performance?
· What issues are expected to rise or the common problems that have initially occurred when handling a typical contract
· What are the resources required in the implementation of the whole contract strategy?
Further understanding of the other contract management stages ensures that the process is well informed and only a few handles are experienced during the implementation process.
2. Implementation stage
After outlining the required contract management process, implementing the plan is crucial before anyone can use it. The implementation process includes deploying the relevant contract management software that helps in the execution risks that are contract-related and moving the contracts to the centralized repository.
Onboarding is crucial in the implementation plan. It ensures all individuals, directly and indirectly, understand the contract management vision and objectives, and all the people are comfortable using the provided tools.
3. Pre-contract stage
Upon having the foundation set up of the desired contract management, the new contracts can begin. It means that boilerplate agreements or new contract developments for more standard situations are allowed. Developing a specific document that can deliver all the needs and minimize risks is the main challenge in this phase.
Standard situations, particularly in this stage, including getting the relevant contract type, making a few tweaks, and keying in the relevant information
Development of entirely new documents is required when there are complex or unusual contract scenarios.
The previously and inclusively done agreements and adapting the applicable terms make it easier to develop contracts from scratch. Other essential requirements should not be forgotten, including standards of branding and compliance obligations. Electronic signatures help keep the process moving when all the terms and the developed contract are agreed upon by the involved parties.
4. Handover stage
Mainly in large companies, it is common to have different individuals handling the various contract execution stages to have the final completed draft. It is vital to ensure a smooth handover of the contract in each stage for proper contract fulfillment. Spending time to walk through the stakeholders is essential rather than making assumptions that they clearly understand the contract details and their specified milestones, responsibilities, and roles.
5. Contract stage
At this stage, all the contract goals come to life if the management process was adequately carried out. The work done in the contract management process is the one that sets all the processes and their success.
Since contracts have to be managed at this stage, close attention is given to the laid out terms and conditions in the agreement, and regular monitoring is required to ensure a smooth transitioning and contract development process. With a clear understanding of the key milestones and performance metrics, an all-inclusive plan helps confirm everything. The plan also greatly helps provide an early warning system of any problems that may arise now or in the future.
6. Pre-renewal stage
As we all know, nothing lasts forever, even contracts. There are ways that agreements come to an end, including one-off agreements that wind down to natural conclusions, agreements that have renewals or terminations. In the contract, there are specified terms that include penalties imposed or the default actions taken in case a particular party fails to do the stipulated obligations.
It is essential to think proactively of the relevant ways of handling a contract termination before starting the relevant processes. Evaluate whether renewal or contract changes are viable options adequately based on the contract performance. All the stakeholders need to be aware of renewal and termination dates for them to have ample time to consider all the provided information before further decisions are locked out.
7. Post-contract stage
After a contract is terminated or comes to an end, there are housekeeping protocols required before wrapping up everything. Some of the terms include ensuring that all the contract conditions have been met before termination is effected, paying or issuing the last invoices, and archiving the contract.
Performing a contract post-mortem is crucial as it provides valuable learning and information that improves participation and results in future contracts.
In conclusion, the contract management team helps select the relevant contract management software, and various implementation process steps ensure the effectiveness of the contract management. Companies with loads of contracts within a specific duration like one month highly benefit from installing the contract management software.
The Contract Management Essential Stages That Led To Great Adoption Of Contract Management Software
