How to Boost Fourth Quarter Contract Management

fourth quarter contract managementAs we are entering the fourth quarter, your contract management team still has time to meet your 2014 goals and start preparing for 2015.

Here are 5 ways to boost your contract management processes during the fourth quarter.

1. Put on the Good Word for Your Clients

The most sure-fire way to secure your job is by securing that of your clients. As we get towards the end of the year, it is very likely that managers and executives are gearing up for their performance reviews. Now it is it time to work on improving your client management.

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Why Email is not a Replacement for Contract Management Software

email contract managementIf you have ever walked out of a staff meeting with the IT department feeling completely clueless about what just happened, you’re not alone. According to a 2014 Fortune poll, 31% of senior managers feel that in-house IT staff explain tech trends “not very thoroughly” or “not clearly at all, and 29% of them admit to “still have a lot of questions”.

This uncertainty about available technologies is the main reason why so many contract managers still rely purely on email. This is not only a suboptimal tool for contract management, but also one that exposes your company to unnecessary risk. Here are the 4 reasons why email is not a replacement for a contract management system.

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How Contract Structure Should Reflect Business

general contract unique contractThe President and founder of the International Association for Contract & Commercial Management (IACCM), Tim Cummins points out that contract structure is an important topic. “Not only to ensure the structure actually reflects the nature of the deal or relationship, but also to improve the ease of reviewing and understanding the contract”, Cummins says. “Having the wrong contract structure is actually one of the issues that frequently leads to claims or disputes”, he adds.

For example, in the oil and gas business the contract structure is pretty much standard. While each customer has it own structure for numbering, the contract is structured into section or exhibits. At the other end of complexity are the contracts from the construction industry, even more those that are funded by local, state or federal government monies. Under the latter scenario, costs and associated data needs to flow seamlessly and correctly for project,contract, billing, and financial management.

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How to Create Quality Contracts

quality contractFounded in 1999 with support from British Telecom, Hewlett-Packard, IBM, Lucent Technologies, Marconi Communications, and Siemens, the International Association for Contract and Commercial Management (IACCM) stands as one the global forums for innovation in trading relationships and practices. The IACCM is a useful resource for contract managers around the world and its blog has some articles that have even reached almost 30,000 unique readers. As of 2012, the third most popular article is on what is the purpose of a contract and what are the quality indicators for a contract. The article surveys members of the IACCM and tries to define what ‘quality’ means in terms of a contract.

Here are some of the findings on how to create quality contracts.

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The Importance of Integrity in Contract Management

integrity in contract managementIntegrity in business is a more complex topic than it might at first appear. Integrity could be summed as a list of “Don’ts”—don’t lie, don’t mislead, don’t conceal, don’t steal, don’t break professional ethics codes, and so on. Seen in this way, integrity in business is simply about doing the right thing—as individuals and enterprises.

But there’s another perspective—integrity is also integrally tied to business success. There are of course exceptions—many of which get highly publicized—but generally speaking, the way to get ahead in business, as an individual and an organization, is through integrity.

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Outlook of Contract Management in Asia

contract management in asiaContract law in Asia has traditionally been inconsistent, and it remains so, even in the larger markets. This lack of contract clarity and unpredictable contract enforcement has, not surprisingly, discouraged business investment in Asia.

In part, the situation in Asia is due to a cultural tendency in Asian business to focus on personal relationships rather than on contracts. But as Asia becomes more integrated in the global economy, Asian countries are quickly becoming more sophisticated in their use of contracts and more transparent and predictable in their enforcement—a development borne out by World Trade Organization surveys.

Nonetheless, throughout Asia there are significant differences in regulation, levels of trust, and attitudes toward business, so a uniform contracting environment is far from a reality. Asia still remains in the infancy of complex contract management, including contract creation.

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What to Consider When Negotiating SaaS Contracts

how to negotiate saas contractThe market for software-as-a-service (SaaS) continues to grow rapidly, with global spending expected to rise 17.9 percent in 2012, to $14.5 billion, and to reach $22.1 billion by 2015, according to the market research firm, Gartner.

Increased awareness of how SaaS works, growth in related technology (e.g. platform-as-a-service), and the low upfront licensing and capital costs are driving this increase, said Gartner’s research director, Susan Mertz.

But as many enterprises transition to SaaS, they’re often unsure of how to find and negotiate service contract terms that best suit their business needs. Many enterprises don’t adequately review the contract terms of the SaaS vendors they are considering, and even more never try to change the terms in their favor.

In a July 2012 article on CIO.com, Thomas Trappler, director of software licensing at UCLA and SaaS contracting instructor at the school, urges enterprises to be more aggressive in seeking terms that will provide the most benefit.

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Take Charge of Your Contract Management Process

take charge of your contract management processImplementing an enterprise contract management system results in numerous benefits—pre-approved templates and legal language that speed time to close, alerts for milestone dates, tracking of contract compliance, and analysis of contract performance, to name a few.

At the core of this increased functionality is a central repository for all contracts.

The Old Way: Miscommunication, Holdups, and Mistakes

In companies that don’t utilize an enterprise contract management system, it’s not always easy to find a contract within the organization. Many companies without contract management software have multiple contract repositories spread among various departments or business units. This lack of centralization leads to costly delays and errors, as well as making effective analysis impossible.

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Evaluating SaaS for Your Contract Management Processes

contract management saasEnterprises considering whether to implement contract management software should always ask the central question: Will this technology ultimately help the organization achieve its key strategic objectives?

In a recent blog post at CIO.com, Martin Davis, a vice president of IT for J.D. Irving Ltd., points out the perils of adopting new technologies without proper alignment with business goals. Often an organization wants to try a new technology such as contract management software without any definitive plan for how that technology will actually help increase revenue, improve productivity, lower costs, or realize any other specific, measurable objectives.

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Effective Data Reporting for Contract Management

contract management reportingOne of the essential elements of any productive contract management software system is its reporting capability. Even if critical contract data is collected and stored in spreadsheets or databases, a company won’t fully maximize the benefit of this information without a user-friendly and reliable reporting function that produces meaningful, concise reports that highlight the most important data.

Effective data reporting capability allows companies to identify and analyze opportunities, as well as problems, in the way they create, negotiate, execute, and monitor contracts. Merely gathering information about the contracting process and contract performance isn’t enough.

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