5 Simple Steps to Improve Your Contract Management Process
There are three components to every effective contract management solution – People, Technology, and Process. People and Technology are as important to the overall success of your program as two legs of a stool but Process is the glue – and third leg of the stool – that pulls everything together. In other words, if you unable to consistently repeat the required steps within your contract management process, then the best People and Technology in the world are just Band-Aids that will eventually peel away.
Unfortunately, most organizations avoid contract management process planning because it is the “heavy-lifting” part of the project. It requires more time, more effort, and more self-examination then most organizations are willing to dedicate. The short cut is to buy the “silver-bullet” technology (contract management software, workflow applications, reporting tools…) and just expect their people to make it work. If this is your desired direction you may get lucky and everything will come together. However most will encounter elongated implementation cycles, rising costs (more time, more software, more development), and unreliable long term results.
Before you even review technology options and who are the people that will be involved, here are five simple Process development steps management should consider prior to getting started.
Step 1 – Why are you looking for change?
Something is happening in your environment that has moved effective contract management from the dredges of a perennial project 11 position to the top of your list. It may be a dire need to drive cost savings, a time-consuming audit that now has you refocused on asset/contract management, or a merger/acquisition/divestiture that hasn’t gone well due to lack of insight to what you actually own. It doesn’t really matter. What does matter is that you take the time define crystal clear and measurable goals – reasons why you are doing this – before you start.
Step 2 – What would happen if you were successful?
Defining the reasons why you are tackling an effective contract management solution is a great start! However in order to get approval, funding, and buy-in/commitment to this project, you will need to build a solid business case to compete for scarce resources. Your business case should include where dollars/time/resources saved by your new process will used, what specific projects could benefit, and how the company will benefit from the new allocations.
Step 3 – Review your current process
Start by reviewing your current process using the 80/20 rule. Every process has its set of exceptions but 80%+ of the time it works a certain way. You will need to document every step in detail and determine what is working and what needs to be changed.
Step 4 – Make small changes
You are not going to eat an entire whale in one bite. The same can be said about making changes to your current contract management process. Focus on small incremental changes that provide quick wins – areas that have measurable value to the organization and can be used to build momentum.
Step 5 – Build a continuous review plan
Assign someone the responsibility for scheduling monthly, quarterly, or annual process review meetings – include management. Highlight the measurable success you have had, discuss the next series of small changes, and set goals for what the desired results should look like.
