Contract administration can be a daunting process when relying on primarily manual tools - such as spreadsheets, shared drives, and disparate emails. Without accountability, visibility, and a clearly defined contract administration plan, you can find yourself running into compliance issues, minimizing contract value, and encountering other setbacks. Read on to learn how you can create a strong contract administration plan with the help of leading contract management software.
What Is a Contract Administration Plan?
A contract administration plan serves as a framework for effectively and efficiently implementing sustainable contract management best practices from contract requests through renewals. A strong contract administration plan usually involves leveraging leading CLM software to centralize contract lifecycle management processes, configure workflows with key date alerts, track contract financials, manage risk, and leverage contract management reports with analytics.
Step #1 – Centralize Contract Lifecycle Management Processes
Contract administration without a centralized contract lifecycle management process can cause you to overlook mission-critical contract process components that connect pre-award and post-award contract lifecycle processes. Centralizing contract lifecycle management serves as an integral part of your contract administration plan because it connects the contract stages from requests through renewals – including pre-signature negotiations and post-signature obligations.
Contract lifecycle management software digitally unifies contract lifecycle management processes in a centralized system – either web-enabled or deployed - that can include eSourcing and eProcurement tools for source-to-contract lifecycle management success. Leading CLM software unifies people, processes, and technology for sustainable contract lifecycle management success, including the help of an integrated eSignature tool that serves as a seamless bridge between pre-award and post-award processes.
Step #2 – Configure Workflows with Key Date Alerts for Key Timelines
Manually tracking contracts can place your organization at risk for compliance issues, contractual failure, financial instability, and other inhibitory variables. Luckily, you can configure contract management workflows to track contracts effectively and efficiently. Contract management workflow is the process of creating and assigning tasks within your contract lifecycle. An efficient contract management workflow implements contract workflow automation tools within the contract lifecycle to save time, energy, and resources.
A centralized CLM software solution provides advanced contract workflow functionality that can alert contract stakeholders for various reasons – including changes in pre-approved clauses, contract performance audits, and general CLM user-defined tasks. You can manage contracts throughout their lifecycles by configuring timeline-driven task alerts – including contract negotiations and reviews - that can be configured via email, especially with the help of an MS Outlook PC Helper App.
Step #3 – Track Contract Financials For Strong Budget Administration
Managing contract financials, especially tracking active contract spend against allotted contract spend, with disparate tools such as contracts within shared drives and disparate spreadsheets can create inefficient contract administration siloes. Fortunately, tracking contract financials within leading CLM software allows you to track many budgetary variables within a centralized contract financial data report for enhanced oversight, where you can easily track the following quantities, to name a few.
- Contract Transactions
- Contract Expenses
- Total Contract Budget
- Remaining Contract Budget
- Percentage of Used Contract Budget
- Percentage of Remaining Contract Budget
- Contract Expenses
- Total Contract Budget
- Remaining Contract Budget
- Percentage of Used Contract Budget
- Percentage of Remaining Contract Budget
Leading CLM software empowers you to report on contract financials of all contracts within your contract management system – including by department, counterparty, and type. You can also configure alerts for when budgets meet or exceed a defined contract value – increasing contract management budgetary awareness in virtually real-time.
Step # 4 - Manage And Reduce Contract Risk
Assessing risk within a myriad of contracts can be challenging without visualization and prioritization. Whether you are dealing with ten or ten million contracts, identifying and prioritizing risk factors can prove challenging when sifting through words and other data variables within pages of documents. Without a centralized and graphical opportunity assessment tool, identifying risk within contract administration can prove arduous.
Luckily, leading CLM software offers risk assessment and OFAC search mapping tools to help your team graphically visualize risk within your documents for comprehensive risk contract management. Rather than manually sifting through your contract records for risk variables, you can leverage a visualized graph that can plot contracts based on their identified risk score – yielding a holistically visualized risk analysis of active agreements that can help you effectively prioritize contract risk factor decision-making within your contract administration plan. You can also analyze how a contract would perform with hypothetical risk variables and exposure within a risk assessment matrix - further helping you and your internal stakeholders prepare for prospective happenings.
You can leverage this visual contract risk assessment matrix and statistical data analysis to identify negative, neutral, or positive facts about your contracts to help improve your contract administration strategy. You can also enable message alerts to notify you if a contract incurs a value of X% greater than the average contract within your CLM software database.
You can also leverage the OFAC search graphical risk tool to identify if your contracts, including involved vendors and employees, comply with the Office of Foreign Asset Control's national sanctions list.
This graphical risk visualization allows you to identify a contract's OFAC compliance both in the pre-award and post-award stage – increasing robust risk mitigation. You can preconfigure rules to notify you in real-time if a current contract meets or exceeds a specific OFAC Search percentage to allow for swift risk mitigation before it becomes untenable.
Step #5 – Leverage Contract Reporting & Analytics for Robust Oversight
Compiling data from sourcing vendors through contract renewals can prove time-consuming and cumbersome when primarily leveraging manual tools and processes, such as spreadsheets and disparate filing systems. Fortunately, leading contract management software can equip you with robust tools for source-to-contract lifecycle management reporting success, including the following.
- Bid-Tabulation Reports & Vendor Rating
- Ad-Hoc Contract Management Reports
- Graphical Dashboards for At-A-Glance Statistical Analysis
- Configurable Contract Management Report Designs
- Contract Financial Data Reports
Additionally, leading contract software can enable you to email contract management reports to stakeholders directly, based on configured rules, and export data into spreadsheets. Contract management reports showcase contract analytics gleaned from selected contact data – including KPIs, contract workflow tasks, departments, budgets, financials, vendors, bids, compliance, obligations, renewal dates, and more.
Robust contract lifecycle management software offers highly configurable graphical dashboards to analyze statistical data quickly and effectively. With the help of such a visually engaging medium, you can assess contract metadata comparisons at a glance. Moreover, integrated statistical analysis and multiple grouping options can prove especially useful for consistently tracking contract management KPIs.
Implement A Winning Contract Administration Plan With CobbleStone®
Don't waste any more time with an inefficient and ineffective contract administration plan. Discover how you can implement a winning contract administration plan with CobbleStone Contract Insight® CLM software. Book your free demo with a CobbleStone Contract Insight expert to see how you can create your CLM-backed contract administration strategy today!
CobbleStone's trusted, award-winning, highly integrated contract management software streamlines the contract management process with optimal governance, reduced friction, and high flexibility from contract requests to renewals. Discover why thousands of contract managers trust CobbleStone Software with their contract management needs. CobbleStone has been a leader in CLM software for over twenty years. CobbleStone's user-friendly, robust, and scalable solution seamlessly connects with external applications, including MS Word and MS Outlook, for unified and seamless contract management. It's no wonder why Forrester names CobbleStone a Leader in CLM software!
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*Legal Disclaimer: This article is not legal advice. The content of this article is for general informational and educational purposes only. The information on this website may not present the most up-to-date legal information. Readers should contact their attorney for legal advice regarding any particular legal matter.
