Good contract management consists in developing and controlling the life cycle of a contract, from the initialization phase to its end, through the systematic and methodical coordination of resources and processes useful for risk control and financial optimization
Legal departments are responsible for managing the entire life cycle of complex contracts, from beginning to end, through the coordination of the means and processes necessary to control financial and legal risks.
Lawyers therefore need to bring productivity and high added value to organizations by providing them with a vision of the contractual life cycle that is both transversal and global.
Paradoxically, controlling the risks and commitments related to contract management is not insured in 2 out of 3 companies.
10% of active contracts are simply lost while 60% of supplier contracts are renewed automatically without prior analysis or decision-making (source: Aberdeen).
However, there are multiple consequences to ineffective management:
In addition, the volume of contracts is significant, since 2 out of 3 organizations manage more than 1000 contracts.
The factors linked to poor contract management in business are numerous:
Lawyers need to have a global vision of the company's contractual relationship with its clients, suppliers and partners: they must therefore adopt effective contract management processes to ensure that conditions are met appropriately and in a timely manner. Modern technology can help businesses improve their contract management, allowing them to collect relevant data, monitor contractual obligations, and make informed decisions.
Setting up effective contracts management which covers the main phases of their life cycle through automation and digitalization is strategic.
