ContractManagement

Contract management is the systematic process of handling a contract from initiation to renewal or termination. It aims to maximize value, minimize risk, and ensure compliance by coordinating people, processes, and information throughout the contract lifecycle.

Key activities include drafting using templates and clause libraries, negotiating terms, obtaining approvals, executing contracts (often via e-signature), and monitoring performance against obligations, milestones, and service levels. It also covers amendments, extensions, renewals, and eventual closeout, supported by centralized repositories and version control.

Stakeholders commonly involved are legal, procurement, finance, sales, operations, and suppliers. Effective contract management improves cycle times, visibility of rights and obligations, and control of spend, while helping ensure regulatory compliance and enforceability of terms.

Common contract types include supplier agreements, customer contracts, service level agreements, non-disclosure agreements, and licensing arrangements. Metrics used to assess performance include cycle time, value under management, renewal rate, compliance rate, and audit findings. Common challenges are governance gaps, inconsistent templates, data quality issues, and fragmented systems.

Best practices emphasize standardization, a centralized repository, clear governance, automated alerts, risk scoring, and the use of electronic signatures and contract management software. Trends include AI-assisted drafting, clause libraries, and contract analytics to identify risk and opportunity.