With an eye toward achieving ultimate business and mission benefits, Open Windows Software along with The Chartered Institute of Procurement and Supply Australasia (CIPSA) presents best practices in contract management.
Each of the 12 best practices is exemplified by a brief and to the point case study..
What are key takeaways?
This white paper emphasizes the need for effective contract management to truly realize benefits from supplier relationships through effective performance management, driving ongoing improvements, and managing risks. 12 best practices covered are summarized here (and shown as per the groupings by Open Windows Software/CIPSA):
- Ensure performance – set, review, and monitor KPIs
- Watch over the finances – budgets, billing and payment, total cost of contract, and financial trends
- Record keeping and reporting – real-time audit trails and reporting to stakeholder
- Audit compliance – of both parties adherence to contractual documents
- Invest in the relationship – strong SRM at all levels
- Orchestrate the CM network – of your people so they act within the contractual framework as a cross-functional team
- Handle disagreements and disputes – prevent and treat internally and not through third parties
- Gauge issues and risks – ongoing identification, prioritisation, tracking, and resolution
- Manage variations – written, verbal, and behavioural-based (estoppel) variations
- Forecast demand and supply – business needs and changes, provider capabilities, etc.
- Maintain market intelligence – over your providers and the market as a whole (e.g. technology, prices standards, market conditions)
- Drive continuous improvement – within both parties and the interfaces
We at Public Spend Forum believe that taking a deliberate and rigorous approach to structuring the supplier relationship and contract up front, paves the way to realizes as much value as possible to support mission objectives. Applying a “best practices” check list and determining which are the most applicable for each individual contract, goes a long way to achieving that goal. As stated in the introduction of this white paper:
“Not every organisation, nor every contract, needs to be best practice. But to progress from passive and reactive contract administration to the proactive leadership in contract management required today, every procurement organisation needs to contemplate how it will rise to this crucial role.”
Full Report: Open Windows Software / CIPSA
Image Courtesy of TeroVesalainen