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Health Check: Contract Management

How do you improve the management of supplier contracts?
Health Check: Contract Management
 
 
Executives often wonder how well their organisation is performing in key areas, but can't always afford the time or expense of a full-scale analysis or benchmarking exercise. Even when a substantial initiative is being contemplated, an initial "rough cut" assessment is often the right starting point before investing significant resources.

This guide looks at the process of Contract Management, as follows:
 
The process of storing contracts, utilising contract terms on orders, making payments against contracts, monitoring supplier compliance, and recognising when to renew or re-negotiate contracts. The goals are to:
  • Realise the savings from negotiated agreements by maximising the percentage of spend “under management” and “on contract”
  • Minimise risk from potential supplier non-compliance with contract provisions such as proper insurance, carbon emission limits, material and labour sources, etc.
  • Avoid unwanted automatic renewals and missed opportunities for contract re-negotiation or re-sourcing
 
This includes all types of supplier contracts, such as:
  • Simple product and service agreements
  • Framework agreements
  • Call-off or blanket agreements
  • Direct project agreements
  • Sub-contract agreements
  • Maintenance agreements
  • Price list agreements
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