Customer contract management is not a CRM task; it is a CFO and Director level responsibility, because the risk of poor governance of contractual commitments has far reaching and serious consequences. Death and personal injury in contracting carries personal risk for those involved in managing the contract, and poor contract management has a direct impact on reduced revenues, profit margins, and the likelihood of litigation occurring.
On the sell side, Contract lifecycle management software can provide visibility into organisational commitments in customer agreements by providing a central repository of agreements and pro-active email reminders as trigger points approach. This helps to mitigate the risk of non-compliance.
There are important clauses in customer agreements that you need to know about, but you don't because the people who write the agreements are typically different to the people who manage the agreements and there are no systems providing connectivity between the two. A CPI clause may give you the option to raise the value of the contract every 12 months by CPI, and if you miss the notice date then you miss the revenue. There are other triggers that you don't want to miss, and each has a deadline and consequences.
Compliance to customer contracts is business critical. Are you delivering what you have promised? (Remember a promise is a contract and vice-versa). If you don't have a system that monitors deliverables and milestones, then you may not be in compliance with your commitments, and how would you know? You would not know until your customer tells you so. Delays and non-delivery can mean it takes longer to get paid, or you don't get paid at all.
Delays in some large contracts can make you liable to pay liquidated damages to your customer as a penalty for late delivery. Late or non-delivery can also lead to termination of an agreement, and possible litigation, costing your organisation millions in lost revenue and damages.
Contract lifecycle management can help to manage the risk of non-compliance to your sell-side contracts by automating contract management processes and electronic approval routing. Contract lifecycle management can corporatize contracting processes and help your staff perform key tasks, providing detailed process checklists and templates, that provide corporate consistency, accountability, and auditability.
The biggest risk is not knowing what your commitments are. How can you manage your risk if you do not even know what contracts you have? How long does it take you to locate a contract, its amendments, history, and associated correspondence and file notes? Sounds like it?s time to put in a system. - 15246
On the sell side, Contract lifecycle management software can provide visibility into organisational commitments in customer agreements by providing a central repository of agreements and pro-active email reminders as trigger points approach. This helps to mitigate the risk of non-compliance.
There are important clauses in customer agreements that you need to know about, but you don't because the people who write the agreements are typically different to the people who manage the agreements and there are no systems providing connectivity between the two. A CPI clause may give you the option to raise the value of the contract every 12 months by CPI, and if you miss the notice date then you miss the revenue. There are other triggers that you don't want to miss, and each has a deadline and consequences.
Compliance to customer contracts is business critical. Are you delivering what you have promised? (Remember a promise is a contract and vice-versa). If you don't have a system that monitors deliverables and milestones, then you may not be in compliance with your commitments, and how would you know? You would not know until your customer tells you so. Delays and non-delivery can mean it takes longer to get paid, or you don't get paid at all.
Delays in some large contracts can make you liable to pay liquidated damages to your customer as a penalty for late delivery. Late or non-delivery can also lead to termination of an agreement, and possible litigation, costing your organisation millions in lost revenue and damages.
Contract lifecycle management can help to manage the risk of non-compliance to your sell-side contracts by automating contract management processes and electronic approval routing. Contract lifecycle management can corporatize contracting processes and help your staff perform key tasks, providing detailed process checklists and templates, that provide corporate consistency, accountability, and auditability.
The biggest risk is not knowing what your commitments are. How can you manage your risk if you do not even know what contracts you have? How long does it take you to locate a contract, its amendments, history, and associated correspondence and file notes? Sounds like it?s time to put in a system. - 15246
About the Author:
Adam McInnes is the CEO of Open Windows Contracts, an innovator in contract lifecycle management software. Open Windows offers a trial of their contract management software and further information that you may be interested in.
