Introduction to Contract Management
Businesses of all sizes will be involved in contract management, perhaps even if they don’t know it. It’s a central part of business operation and dealing with suppliers, vendors and customers. However, it’s still something that many aren’t fully familiar with, despite it being important, and an excellent potential career opportunity. In this article, we’re going to take a brief look at what contract management is, the different elements it can involve, and how you can become, or train a member of staff to become, an effective contract manager.
What is contract management?
In short, contract management is all about maintaining the contracts that enable people to do business. It’s a wide and varied part of business, but it’s essential where large contracts dictate the success of a company. Usually, there are three stages to contract management, and contract managers will have a hand in all of them. There’s the initial scoping out of what the two businesses might need, which is generally the sales stage. For example, this might be where a manufacturing company discusses raw materials with a supplier. Then, there’s creating and executing the contract, which would be where the contract is agreed on and put into place. Finally is the ongoing process of making sure that the contract is being maintained and fulfilled, which is where most contract managers will spend their time.
What are the different elements of contract management?
One of the things that many people don’t realise - particularly when considering a career in contract management - is that there are many different elements of contract management, and that people with such a title could potentially have very different roles. Here are some of the most common types of contract management and what the role generally involves:
- Negotiation - At the first stage of a relationship is of course the period of negotiation. Some contract managers will therefore primarily be involved in this stage, helping their business ensure that the contract is as good as it can be from their perspective and in their interests, while also being achievable. This is often related to a sales role, but in larger organisations where contracts are large, is a major task in itself.
- Commitment - Contracts are after all about what two entities commit to one another in respect of an agreement. Many contract managers therefore are primarily focused on ensuring that the contract is fulfilled on both sides of the agreement. This will mean checking to ensure the other party has done what they said they would, and that your company is also meeting its commitment.
- Documents - Contracts range from being very simple one page agreements, to major documents that take weeks to put together. As a result, one very important aspect of contract management is document management. People involved in this process will maintain the wording of the document, and also implement changes to the document as the contract changes and progresses.
- Communication & awareness - A contract might be a major driving force in the way that a business, or a department of the business, works. This means that some contract managers need to be involved in communicating the important aspects of the contract to other members of the business, and generally raise awareness of the commitments in it.
How do you become a contract manager?
As you can see from the above, there are many different types of contract manager, which means there isn’t necessarily a set route. Often, contact managers are promoted from within, and move from similar roles. Contract management courses are very popular as a result, and can help ensure individuals have a sound understanding of the role. Click here to find out about the Introduction to Contract Management course that we offer here at Virtual College.