Post-award contract management involves: transitioning from pre-award activities to on-the-ground implementation; planning for change; and managing performance issues and disputes. You’d be forgiven for thinking that the vendor or supplier is key to these post-award activities, because they are, and thus supplier management should be a priority. However, post-award contract management is also much more.
In the world of contract management, vendors are not the only stakeholders internal to an organisation. Vendors are often the most visible and apparent stakeholders, but there are others that should be included in your contract management strategy.
Contracts have a significant impact on every organisation's bottom line, so it is imperative that you include all relevant parties in your contract strategy. This includes contract owners, project managers, end users, c-suite, finance, legal, IT; any department or individual stakeholder who may come into contact, require some interaction, or will be impacted by that contract should be considered. Where a stakeholder has a direct relationship to the contract or you require them to oversee any aspect of the post-award implementation or management of the contract, the contract management strategy should be visible and collaborative with these stakeholders. Management of the contract post-award must be collaborative and interactional between the internal stakeholder, procurement and contract management team. It is therefore imperative that we say good-bye to the locked contract spreadsheet that provides no visibility to the stakeholder. Modern contract management systems today facilitate complex and advanced user permission matrices to safely and securely share visibility and data whilst fulfilling your GDPR obligations; they introduce a collaborative contract management.
The post-award phase is a critical time for ensuring that your project stays on track and meets its objectives. It’s also a time when you can manage your vendors to ensure they are meeting their contractual obligations.
Post-award contract management is not just about managing the vendor relationship; it’s also about managing business drivers.
How do you go about doing this? Firstly, you need to identify your key project objectives and success factors as early as possible in the planning process so that you can determine what metrics are most important for measuring progress. Set expectations. Establish clear goals for each project objective so that everyone involved understands what’s expected of them and their role in achieving those goals. Ensure the relevant business objectives that drive the contract are clearly understood by all stakeholders, and that this underpins and drives the project. Track progress. Track all data related to each objective on an ongoing basis so that you can measure whether or not you’re meeting expectations at any given point in time.
You need to identify, track, and manage business drivers so that you can:
It can be performed on a transactional basis — for example, when there is an issue with a deliverable and it needs to be resolved — or on an ongoing basis to ensure that certain metrics are being met.
Clear records, notes and performance reports need to be kept, maintained and visible to those concerned. Many contract management systems now, can help with performance management and measuring and maintaining KPI’s on contract.
Another key component in post-award contract management is to understand and clearly communicate who has responsibility for managing the contract. This will help ensure that expectations are set, responsibilities are assigned, and that you have a clear understanding of what the vendor is doing for you.
Your organisation may have several people involved in contract management, including those responsible for procurement, finance and legal. To ensure that all parties are aware of their role in managing your contracts, it’s important to create a central repository where you can share information about existing contracts as well as any relevant changes or amendments to them. The repository should also contain instructions on how to execute changes to your contracts and when they should be executed.
A good practice is to designate an official point person within your organisation who will serve as the main contact with vendors during the life cycle of their contracts. Having this captured in your repository or in a contract management system ensures responsibility is maintained and transferred accordingly. This person should be familiar with all aspects of the contract including any modifications or extensions that may have been agreed upon by both parties at any time during its term. This person also needs to be able to provide information about all incoming invoices and send out payments on time every time.
Post-award contract management is more than managing the vendor. It is about bringing together all of the internal stakeholders associated with a specific contract to work together to achieve business objectives.
Sharing visibility over the contract, the capture of the initial need, the contract terms, any variances or changes, performance metrics and review notes, becomes essential in order to communicate and collaborate on the contract effectively. Here a central repository and a contract management system, like the Accord contract management system, becomes a must-have tool.
Contact Accord for further information and insight on how we can help.
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