How Much Does Post-Award Contracts Management Really Matter?

There are many procurement and contracts management teams out there in organisations that are just not taking post-award contracts management seriously enough, or just do not know how to manage it or where to start in managing the activities involved in post-award.

We have found organisations dealing with thousands of contracts spanning across various functions such as legal, sales, HR, procurement, and so on. And unfortunately, we know a lot of organisations are manually managing these contracts either on paper, shared drives, or spreadsheets, making managing contracts and tracking post-award contract compliance very problematic.

We want to help by discussing all that you need to know about downstream contracts management, including, what it means, the challenges you may face and what is the best solution to tackle the post-ward process.

In the contract’s lifecycle, they are two stages, pre-award/upstream, and post-award/downstream, both needed efficient and proactive contracts management.

What is pre-award contracts management?

Pre-award contracts management are the activities such as drafting the contract, negotiating the terms and conditions and the execution before the contract is signed.

What is post-award contracts management?

Post-award contracts management are the activities, after the contract is signed, which include ensuring that the ongoing compliance with the terms and conditions are met, managing any contracts amendments and variations, as well as manging the any key contract dates, such as adhering to production, QA, delivery requirements and expiry and renewals dates; and measuring supplier performance.

So, why is post-award contracts management important?

Well, what we understand from our customer’s currently using our Accord Contracts Management System, is that procurement and contracts management teams are absolutely brilliant at the upstream pre-award activities, with well thought-out and seamless workflows, however, what tends to happen after they secure a deal, is that is simple filed away and forgot about, so the team have no visibility or are even aware if that contract is delivering the value that they expected or even aware of those important key contract dates.

By filing away contracts after contracts are signed and not going through the downstream stage of the post-award contract management activities, the milestone of payment, delivery, quality of good, etc. do not get tracked efficiently and nobody knows when the clock started ticking on your contracts, making it difficult to understand and control contract expiries or auto-renews – without any evaluation of contract performance too! All these issues and challenges mean your procurement and contract managing teams lose out on any opportunities to create savings, cross-sell, and up-sell; and the list goes on.

What are the challenges often faced with post-award contracts management?

• Managing and tracking disparate contracts. There are some organisations that do business on a global scale or across multiple sites, and with that will have a range of stakeholders with varying expectations and needs. Disparate contracts across multiple locations results in misaligned information and templates, such as different currency formats, varying terms, conditions, and specific escalations and de-escalation clauses.
  
• Gaining instant visibility over contracts. Along with having a mix-match of information when your contracts are in disparate locations, having your contracts stored in multiple disparate systems across the organisation leads to a lack of visibility, which can cause more issues, such as financial losses due to non-compliance, missed opportunities for revenue capture, and limiting the ability to minimise lost savings.
  
• Ability to measure contract performance. Organisations need to have processes in place to manage and measure performance throughout a contract’s lifecycle. Procurement and contract management teams need to have quantifiable targets, such as revenue growth, overall corporate risk, value for money, etc. as well as having the mean to track any contracts or suppliers that under-performing so teams can install corrective measures.
  
• Lack of stakeholder communications. Again, one of the issues of disparate systems and contracts data is that your organisation will suffer from stakeholder alignment, due to the lack of efficient and effective communication and collaboration, as something as simple as amending contract terms and conditions become difficult without a common interface or central contracts systems for collaborations among your key stakeholders.
  
• Missing renewals and expiries. A common challenge organisation face with post-award contracts management, is not efficiently and effectively managing the renewals and expiries of the organisation’s contracts, resulting in contracts being renewed without any re-evaluation or renegotiation based on the contract performance. A central system in place that enables collaborative contracts management would enable your stakeholders and teams to have a thorough review of any auto-renewable contracts, as well as any upcoming expiries so nothing gets missed.

How can I manage post-award contracts management? What is the solution?

Automation. Automating your downstream post-award contracts management process will successfully address all those challenges we discussed previously.

What are the benefits of automated post-award contracts management?

In most organisations, once a contract is signed, it goes into storage and is often never given a second look. There is no way to track or monitor a contract’s performance. This negligence can expose companies to massive compliance risks and cost them huge financial and reputational losses.

By automating the post-award contracts management activities, it will enable you to streamline and standardize the entire post-sign off contract management process. It ensures efficient management of obligations, expiries, and renewals; and help identify opportunities for savings, cross-sell, upsell as you will have a better overview of contract performance.

Here are five benefits of automating post-award contracts management:

1. Effective obligation management
2. Regulatory compliance management
3. Opportunity identification
4. Performance measurement
5. Efficient expiry and renewal management

These five benefits can be quickly realised and made today, provided the correct contracts management system is in place.

Gain post-award contracts management with Accord, the stress-free contracts management solution.

Automate your contracts lifecycle management process, with an easy-to-use system that efficiently and effectively manages all your contracts in one place, sets alerts and reminder for expiries and renewals and drive focus on your performance tracking.

100% of surveyed clients agreed that Accord has been essential to maintaining and managing their contracts.

For more information on contract management or Accord, please reach out to us at hello@accordcontracts.com