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Contract Management Services: The Ultimate Choice of Leading Market Players!
By definition, contract Management is the management of a legally enforceable contract that exists between a business and its customers, vendors, employees, partners, and more. Any process that creates, utilizes, and contributes to the contract data comes under the contract lifecycle. Efficient contract management requires an in-depth understanding of every term of the contract.
More and more businesses from varied industry types like legal, insurance, accounting, etc. are looking to seek professional solutions for managing their contracts. A study by the Aberdeen Group shows how contract management services benefit businesses:-
- 39% higher achievement of the sales target
- 35% more employees achieving the sales target
- 24% reduction in the sales cycle
- 20% growth in lead conversion rate
- 12% increase in proposal volume
What are the various Stages in Contract Management Services?
Just like any other process, contract management involves some stages which need expertise for its perfect execution. The successful execution of the previous stage is essential to have a clear ground for going further to the next stage of contract management.
The 6 Stages of Contract Management
1. Business Objectives and Risk Identification –
In the first stage, it is essential to identify the objectives of the business and risks associated with the contract to set realistic expectations for both the involved parties.
Evaluating how the contract will prove to be beneficial for both the parties also holds immense importance during this stage of contract management.
2. Contract Drafting –
After the successful evaluation of the business objectives, expectations, and the associated contract management risks, the next stage is of contract drafting. Here, collect all the documents and information that support the contracts to meet the entire organizational and legal requirements.
3. Contract Negotiation with Stakeholders –
After the contract is drafted, the negotiations commence between the concerned parties. It mainly focuses on each party’s expectations with respect to the terms and conditions, pricing, and more.
Mutual trust and transparency must be established during the negotiation period, and if the expectations are met as discussed, it lays the foundation for long-term mutual business growth.
4. Finalization and Contract Execution –
After the negotiation stage, the final amendments are made to the contract, and approvals are confirmed with the parties involved. To ensure that the contract approvals do not impede its cycle, put a proper workflow needs in place for the approval process.
Once the contract is finalized, the execution of the contract starts immediately owing to the various mentioned contract specifications.
5. Managing Contract Audits and Obligations –
After the execution starts, contract management doesn’t end. Post-execution, making sure that the stakeholders stay true to their obligations regarding timelines, performance, payments, etc. is imperative.
Apart from this, regular audits need to be put in place to address any irregularities and risk exposures in contract execution.
6. Managing Contract Renewals and Termination –
Terminations and renewals must be tracked when the contract is moving towards its date of closing. The contract renewals, if missed, may result in losses in terms of financial and relationship building, along with important opportunity grabs.
So, timely contract renewals are very important, and one should not miss out on them under any circumstances.
Why is Outsourcing Contract Management the Numero Uno Choice?
Every business has a plethora of tasks related to various processes to handle on a daily basis. This makes handling every task with perfection difficult for the employees, reducing the quality of work. Moreover, it requires expertise which the outsourcing contract management service providers can bring into play.
As per a recent survey, 90% of companies in the US agreed upon the fact that outsourcing helped them in their business growth. So, let us discuss some of the biggest benefits of outsourcing contract management services:-
- No time wastage in writing the contracts
- No expenditure on legal help for reviewing contracts
- Expert handling and avoidance of misclassification fines
- Time and money saving on workforce, infrastructure, and systems
- The overall safety of imperative business information
- Increased efficiency in the management of vendors and contracts
- Measurement of problems and benefits associated with each contract
- Enhanced contact and operational monitoring
- Increased contract visibility and control
- Regular contract upgradation to meet business needs
- Higher negotiation strength with superior contractual terms
- Finer insight into vendor activities leading to performance encouragement
- Reduced liabilities and risks owing to better system alerts and information
The above-post clearly explains the contract management process and its various stages in detail. It is important to have expertise in making, reviewing, and managing the contracts, which is best met through legal outsourcing services. It not only helps in cutting down on costs but also let the business owners focus more on their core tasks and business growth.
Related Article: Streamline Your Company’s Contract Management With These Practices
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