Without contract management, your company or department is at significant risk from underperforming vendor commitments, inaccurate billing, missed deadlines and even possible “make goods” due to unmanaged obligations. All or any of these put your company at financial risk, or worse.
The importance of the job of contract management, however, doesn’t mean that your role or responsibilities get full attention within your organization. This may not be due to any actions (or lack of them) on your part. A key problem in many organizations is the silo effect, where information has a hard time making it out of departmental “silos.”
Although a contract management database helps to break the effect of siloed information, responsibilities for creating and generating new contracts (and maintaining existing ones) often stay within departments. It is key, then, for contract information to flow back to contract database administrators and teams.
In practice, though, the flow of information between departments isn’t always smooth. This can lead to delays in getting and updating contract information, which can nibble into the effectiveness of the database. After all, if a database isn’t up to date, what’s the point?
The best way to ensure a continual flow of interdepartmental information is to make sure all parties feel like they have a stake in contract management. In that light, here are a few suggestions on how to get more buy-in from your colleagues on sharing contract management info. These ideas may help you stay ahead of increasing workloads too:
* Consider departmental contract committees, as suggested in this prior blog post. This doesn’t have to be an added responsibility for contract database managers, either, but a way to schedule regular departmental input on contracts. A contract committee would help underscore the importance of contract management to the wider company and result in improved lines of communication when departmental input or stakeholder input is needed on contract data.
* Consider a wider share list or a CC list of contract reports. If you are using a solution such a Contract Assistant, you have access to many ways to create customized, detailed contract database reports. Are you sharing these reports or just using them for internal guidelines? Consider the added benefit of CC-ing these reports as part of monthly or quarterly internal reports. If your organization encourages sharing key information, then sharing reports is a great way to flag contract management’s importance to others. This raised profile, in turn, can lead to better information sharing to your contract admin team.
* Consider putting together or sharing a standard form for contract reviews. In many organizations, the contract database administrator isn’t always the person conducting contract reviews – but database admins are responsible for scheduling reviews. It’s probably not a bad idea to create and share a standard form for contract reviews. The form can be created to serve two purposes: 1) Help people unfamiliar with contract reviews (such as a mid-contract review) to ask the right questions and 2) Ensure that there is a record of review information that can be easily input into contract records.
* Consider setting deadlines for reporting updated contract information. When contracts get renewed, modified or cancelled, there can be a significant lag in time when that information is shared with contracts database administrators or teams. One way to help head off this lag is to set deadlines well before official contract end dates when stakeholders must confirm that a contract is renewed, modified or cancelled. This will not only help you and your task of keeping your database up-to-date, this internal reporting deadline can serve as a kind of “tripwire” in case other departments are behind the curve on negotiating a renewal or change to an existing contract.
In the end, anything a contract administrator and team can do to raise the profile of the importance of contract management is a net gain for the company – not just database and contract management administrators.