What Are The Common Challenges in Contract Management?

Managing contracts and acquiring other companies can be tough in the fast-moving business landscape. It’s crucial to have experts who know what they’re doing. But why is having skilled professionals handle these tasks so important? As a business owner, you would need more time and the necessary skills required for such things. The professionals in the respective field help businesses run more smoothly and succeed.

Where there is work, there is a challenge we need to overcome. In this insightful guide, let’s learn about acquisition and contract management challenges to address them better.

Contract Management Challenges

Companies consider contract management the basis for supplier management, especially when combined with strong supplier governance. However, 10 key challenges impact the performance contract management.

• There is not enough transparency on claims and service credits
• Supplier performance info lacks
• Responsibilities in supplier disputes are unclear
• Spend isn’t tracked against the time plan
• Missing contingency or risk plans
• No notifications about terms, rights, or obligations
• Handover processes are undefined
• Costs and scope increase
• Business cases are rarely rechecked
• 10-15% of contract value is lost

Getting all of it under control brings you many benefits. Your cost savings become sustainable and increase as you gain the advantage of working capital benefits, improved contract breach penalties, and a simple claims process.

Controlling these factors also reduces the operational costs and gets your risk mitigation into an effective mode. You spend less time dealing with delivery issues, as those things are under control and the service legal agreements are kept in check.

Overall, having good contract management works both ways. Your suppliers are also kept happy when contract value is under control.

The Challenges of Acquisition Management

In acquisition management, handling different aspects is essential to keep things running smoothly. If you don’t, it can cause delays, spending too much money, and project failures. Here are the common challenges that businesses face while acquiring entities-

• Lack of a clear motive.
• Targeting the wrong company.
• Overestimating synergies.
• Overpaying
• Losing trust from stakeholders.
• Inadequate due diligence.
• Failed integration.
• Neglecting one’s own firm’s interests.

How to Take Control of Contract Management

We must divide the actions into separate processes when working with contract and acquisition management. After the contract is signed, it’s inputted into the relevant IT systems. Then, it is handed over to the stakeholder responsible for handling the contract.

5 Tips for Contract Negotiation: What to Consider

• Establish monitoring for KPIs, risks, compliance, and transactions.
• Implement governance for changes and disputes.
• Include exit and renewal functions.
• Categorize contracts by value and complexity.
• Allocate resources based on contract importance, with automation for lower-value contracts and dedicated resources for high-value ones.

How Do You Implement A Good Contract Management Solution?

The initial step in acquisition and contract management is to spot quick wins and retroactive claims, demonstrating immediate value to management. Subsequently, a high-level plan is devised to manage all contracts comprehensively, considering their impact on the organization. Then, attention shifts to contracts leaking value, utilizing specialized IT tools to categorize contracts by type and supplier. Real-time tracking through an as-is status heat map aids in pinpointing areas of concern. It allows for focused efforts on rectifying value loss in contracts.

Finally, an automated system is implemented to streamline contract handling, ensuring continuous improvement. By following this systematic approach, organizations can efficiently manage contracts, optimize value, and demonstrate tangible benefits to stakeholders.

Fully Tap Your Contract Value With An Expert Team

As the tasks in the contract management processes are high, automation is necessary for getting the most efficient management function in place. It is where Nomadux can help you. To begin, you require a unified repository for all your contracts. With the right staff and contract management software, you can easily upload all your contracts to a unified platform that can be accessed anywhere.

After all, you need a team that’s technically and legally aware of the contract terms your company will sign up for.

The Bottom Line

In conclusion, overcoming challenges often requires the right resources. With Nomadux, you can access expert teams capable of acquisition and contract management. By outsourcing these tasks, you tap into a wealth of expertise and experience, ensuring smooth operations and enhanced outcomes. Contact Nomadux today to leverage their specialized services for your business success.