In the ever-changing world of modern business, managing contracts is extremely important. As businesses become more interconnected through a variety of diverse contracts and agreements, it becomes difficult to handle them manually. This highlights the importance of skilled contract managers who serve as a crucial connection between different stakeholders and efficient contract management.
In an organisation, the contract manager is usually the person who owns the relationship with the counterparty or is responsible for the outcome for the contract. For example, a HR manager would be the contract owner of the employment agreement for the new hire.
A contract manager is responsible for ensuring that contracts are crafted, negotiated, executed, and supervised effectively. In the contracting process, this role requires close collaboration with multiple departments, from legal and procurement to sales, ensuring a comprehensive approach to contract management.
The pivotal role of a contract manager extends beyond merely drafting and signing contracts. Their multifaceted duties encompass an array of responsibilities that span the entirety of a contract's life cycle, touching every facet of an organisation. Here's a more in-depth look into their essential tasks:
Contract Creation: This involves the drafting of clear, concise, and legally sound contracts that reflect the organisation's interests while being fair to all parties involved.
Contract Negotiation: A contract manager acts as a mediator, facilitating discussions to reach agreements that serve the best interests of all stakeholders. They address concerns, suggest compromises, and ensure that the finalised terms are beneficial.
Contract Execution: They ensure that contracts are executed correctly, obtaining all necessary signatures and ensuring full compliance with all legal and regulatory requirements.
Contract Monitoring: The ongoing oversight of a contract's performance, obligations, and milestones is crucial. A contract manager tracks deliverables, monitors adherence to terms, and ensures that all parties fulfil their respective obligations.
Contract Renewal or Termination: As contracts approach their end dates, it falls to the contract manager to oversee renewals, extensions, or, if necessary, manage the proper termination procedures.
Identifying Risks: By reviewing terms and conditions, a contract manager can pinpoint potential risks and liabilities that might not be immediately apparent.
Risk Mitigation: They are responsible for suggesting and implementing strategies and clauses that reduce potential adverse impacts.
Compliance Oversight: Ensuring that contracts adhere to industry regulations, laws, and company policies is paramount to avoid potential legal issues.
Bridging Departments: Contract managers serve as the linchpin between various teams such as legal, finance, sales, and procurement, ensuring that all perspectives are considered.
Clarity and Understanding: They break down contract terms for stakeholders, ensuring that every party comprehends their obligations and rights.
Dispute Resolution: Should issues arise during a contract's duration, it's the contract manager's duty to mediate and find amicable solutions that align with the contract's terms.
To excel in the nuanced world of contract management, certain skills stand out as both foundational and vital. Here's an overview of the core competencies every contract manager should possess:
Mastery of contract law is at the heart of a contract manager's role so proficiency in the intricate language of legal documents is paramount. This means not only understanding the explicit terms but also grasping the potential implications of each clause. Having a robust legal acumen ensures that the organisation remains compliant with external regulations and internal policies, reducing the risk of litigation and contractual disputes.
Beyond the simple act of coming to an agreement, effective negotiation is about finding a balance where all parties feel their interests are addressed. This requires fostering effective communication to pave the way for agreements that are advantageous to everyone involved. Coupled with this, is a knack for conflict resolution, where a contract manager can identify points of contention and provide solutions that align with the organisation's best interests.
Contract management isn't just about broad strokes; the minutiae matter. A meticulous approach to drafting and reviewing contracts is crucial. This involves identifying discrepancies, potential pitfalls, and ensuring that every detail aligns with the organisation's objectives. Overlooking a small detail can have significant repercussions, so this skill is vital for avoiding costly oversights.
Given the multitude of contracts that a manager oversees, organisational prowess becomes a cornerstone of the role. This includes juggling multiple contracts, each with its associated deadlines, and ensuring nothing falls through the cracks. It's not just about keeping track; it's about establishing systematic filing, monitoring frameworks, and prioritisation strategies that ensure efficient and effective contract management.
Contracts are complex, and communicating their intricacies to stakeholders is an art. Ensuring clarity in communication with involved parties is crucial. This not only means conveying information but also doing so in a manner that's easily digestible to those not versed in contract language. Paired with this is an ability to listen actively, ensuring that stakeholders' concerns are understood and addressed diligently. After all, a well-informed stakeholder is more likely to be a collaborative one.
In an age where technology continues to revolutionise business operations, digital contract management software, like Plexus, emerges as an indispensable tool for contract managers, streamlining their duties and enhancing their efficiency. Here's how:
Digital solutions offer tools that cover the entire spectrum, from contract drafting and negotiation to approval, signature, and storage. These automated workflows and delegations of authority enhance efficiency and diminish the margin for manual errors.
This offers a secure haven for contract storage while ensuring easy access. This transparency allows for clear insights into contract statuses and vital milestones.
Automated reminders keep upcoming deadlines and renewals in check, drastically reducing the possibility of overlooked obligations.
Drawing insights from contract data equips businesses with the tools for more informed decision-making. It also helps identify patterns and pinpoint areas ripe for improvement.
In the bustling world of modern business, contract managers play a crucial and influential role. These professionals navigate the complex web of contractual obligations, making sure that every aspect of an organisation comes together to effectively and efficiently manage contracts. Their expertise covers everything from the creation to the completion of a contract, protecting the interests of the organisation and promoting smooth interactions with partners, suppliers, and clients. Additionally, with the rise of digital tools designed specifically for contract management, these professionals can now use technology to enhance their impact, ensuring that contracts not only meet all requirements but also seamlessly integrate into a company's operations. By embracing these digital advancements, businesses are in a better position to handle the intricate world of contracts with agility and precision, highlighting the crucial role of contract managers in today's ever-changing business environment.
Plexus' contract management software gives you everything you need to accelerate business productivity in one modular platform. Get contracts signed faster, streamline document workflows, collaborate in real-time and integrate with the apps you already rely on.
One of our consultants will be in touch ASAP to answer your questions and determine your requirements.
Want to speak to someone instead? Call us on 1300 983 907
One of our consultants will reach out to you shortly.
Get weekly legal transformation best practices, benchmarks and trend analysis.
Thanks for subscribing