What is contract management?
By Daniel Walker, Updated: 2023-05-25 (published on 2023-04-20)
I’ve been asked in quite a few meetings recently if I could go a bit deeper into what actually is contract management. We throw the phrase around, but it can mean many things to many people.
This short read will give you a bit more colour on what we mean by contract management at Zegal.
Contract management refers to the process of creating, negotiating, executing, and monitoring contracts throughout their lifecycle.
It is a critical aspect of business operations, as contracts establish the terms and conditions that govern relationships between organisations and their clients, suppliers, partners, and employees.
Effective contract management helps businesses to:
- Ensure compliance with legal and regulatory requirements, reducing the risk of disputes, penalties, and reputation damage.
- Improve operational efficiency by streamlining contract creation, negotiation, and execution processes.
- Enhance vendor and partner relationships by clearly defining expectations and responsibilities.
- Minimise contractual risks by identifying potential issues and addressing them proactively.
- Monitor contract performance and enforce contractual obligations to achieve desired business outcomes.
- Optimise cost savings through effective negotiation, monitoring, and management of contract terms and conditions.
- Adapt and respond to changing business needs by enabling efficient contract amendment, renewal, or termination processes.
Understanding contract management
A well-structured contract management process involves several stages: initiation, drafting, negotiation, approval, execution, monitoring, renewal or termination, and archiving. And we believe it is essential for businesses to ensure compliance, minimise risks, and improve operational efficiency.
Effective contract management can lead to better vendor relationships, cost savings, and improved business outcomes by ensuring that contractual obligations are met, and disputes are resolved quickly.
Contract lifecycle management (CLM)
Online platforms like Zegal will streamline and automate contracts over their lifecycle, making it easier for businesses to manage contracts efficiently and with reduced risk.
New tech, like artificial intelligence, leverages legal expertise to streamline contract management, enabling businesses to create, negotiate, and execute contracts fast.
But why should you trust Zegal with your contract? Well, outsourcing your CLM to an established third party has numerous benefits, including:
Centralised contract repository
A secure, centralised location for storing and managing contracts, making it easy to access and track essential documents.
Collaboration and negotiation
Seamless collaboration among stakeholders, facilitating efficient negotiation and revisions.
Approval and execution
Digital signatures allow for fast and secure approval and execution of contracts.
Monitoring and compliance
Helps businesses monitor contracts to ensure compliance with terms and conditions, as well as regulatory requirements.
Renewal, amendment, and termination
Simplifies the process of renewing, amending, or terminating contracts, ensuring smooth transitions throughout the contract lifecycle.
Expert legal advice is crucial to ensure that contracts are legally sound and protect the interests of the parties involved.
Legal tech will further enhance efficiency, reduce risks, and improve compliance throughout the contract lifecycle.
Contract management is essential
In summary, contract management is a vital aspect of modern business operations that encompasses the creation, negotiation, execution, and monitoring of contracts throughout their lifecycle.
By utilising Zegal’s contract management services, businesses can ensure compliance, minimise risks, and improve operational efficiency.