No matter what kind of products or services you offer, contracts are the bedrock of business operations and meaningful partnerships with clients, suppliers, and other businesses. As such, a Forbes article on contract management emphasizes its value not only for regulatory compliance but also for growth and success.
According to the article, proper contract management is crucial to financial health and performance, as poor practices are otherwise associated with about 9% of annual revenue losses. Increasing the efficiency of the contracting process can also help maintain long-term client and vendor relationships, ensuring the continuity of operations and overall sustainability.
As you oversee the creation, execution, and administration of legal contracts and agreements, below are the top skills you need to streamline the contract lifecycle and maximize its benefits for operational efficiency and financial growth.
Contract Lifecycle Knowledge
Efficient contract management starts with adequate knowledge of the contract lifecycle, from drafting terms and conditions to negotiating potential renewals. The latter is especially crucial for maximizing growth and cost-saving opportunities, as renewals reduce the risk of operational disruptions and ensure business continuity.
Fortunately, you can leverage dedicated software to shift from traditional, paper-based processes to automated tools that enhance knowledge and monitoring of the entire contract lifecycle. SOFTRAX’s contract renewal management software enables businesses to take control of contracts across various revenue models through automated and configurable renewal rules. Additionally, the platform serves as a central repository for critical contract information and can be integrated into billing systems, ultimately informing negotiation planning without revenue leakages.
Organizational Skills
In addition to knowledge and understanding of the comprehensive contract lifecycle, managers must have advanced organizational skills for overseeing multiple contracts simultaneously. Organization and attention to detail are also essential to collaborating with clients and partners and meeting tight contract deadlines.
Similar to contract lifecycle management, you can also utilize digital tools to shift between contract-related tasks and streamline collaborations with partners and suppliers. For instance, top project management software like Asana and Trello have functionalities like document management and task prioritization to optimize workflows, budgeting, and planning necessary for contract initiation and implementation. Additionally, these cloud-based platforms facilitate real-time information sharing and collaboration to minimize the need for traditional face-to-face meetings and correspondence.
Communication
A previous post entitled ‘Do You Know These Top 5 Skills of Good Managers?’ mentioned clear and proactive communication as instrumental to keeping team members aligned and boosting their overall performance and motivation. Similarly, effectively communicating the content and timeline of contract lifecycles can ensure successful outcomes for all parties involved.
Specifically, contract managers must possess active listening skills to anticipate the needs and concerns of other parties and respond accordingly in alignment with the project and business objectives. Meanwhile, conflict resolution techniques can help build and maintain trust during negotiations for contract agreements and renewals.
Risk management
Lastly, you may encounter various risks while drafting, signing, and negotiating contracts, making it crucial to have risk management skills that keep the contract lifecycle aligned with business goals and overall operations. For example, missed negotiation opportunities serve as financial risks that may lead to a value leakage of up to 9% annually.
Since contracts contain confidential data like vendor information, trade secrets, and licensing agreements, contract managers must also contend with the risk of data breaches and ransomware attacks. Overall, you must be knowledgeable of risk reduction and crisis management interventions to anticipate such risks and address them in a timely manner.
Comprehensive contract management evolves as businesses succeed and aim to scale operations, making it essential for leaders and managers to also continue improving the skills mentioned above.
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Author: Nicole N. Keller
