Contract management

Contract management

Written by Ana Canteli on 19 january 2018

The contract administration and management is essential for companies as part of the project management processes. All of them maintain contractual relationships with their clients, salespersons, suppliers, associates; without mentioning the company's human resources. Therefore, they work with a multitude types of contracts, which are sometimes used for different areas of the company: purchase, expansion, sales, etc.

Those in charge of contract administration - project managers - need to negotiate the conditions, keep the commitments, check that the terms are met and review the contract whenever necessary; documenting all the events that happen during its life cycle; and add or update with amendments or corrections, the provisions of the original contract. It is also essential in this type of documents, to establish a privacy policy that guarantees the confidentiality of them.

All these activities, vital for organizations, can be difficult to administer and conserve. So having an enterprise contract management software is an essential element, when it comes to keeping a suitable control of the agreements. Not in vain, we all know that the hiring process does not end when the contract is assigned. Rather, it is when contract management begins. Entities dedicated to both public procurement and the private sector are under pressure to reduce costs, while improving their operational and financial management.

This is possible if we opt for the automation and improvement of the contractual processes, compliance with the conditions and the use of applications designed to solve these needs with accuracy.

The OpenKM document management system allows the efficient management of contracting processes; from its creation, through the execution phase, to the analysis, in a way that maximizes the performance of financial management and minimizes risk.

All contracts are proposed to obtain the commitment and approval of the personnel involved in each phase and level of the project. Therefore, to begin with, contractors or third parties should know the reason why the contract has been established, and what are the objectives that are sought. Since a good contract administration allows to guarantee that all the actors that participate in the subscribed contract, know the criteria under which their performance will be analyzed, they can streamlines contract indicators. And therefore, we increase the possibility of becoming each contract into a success case.

In order to manage a contract successfully from the beginning, the personnel dedicated to its management, including the Project Manager, must find in the contract management solution, the platform that allows them obtain more information at the moment in which they need it.

In this aspect, the OpenKM search engine allows users to search and therefore find information and documentation, based on multiple criteria. From search by free text, to filter the search by location in the document management system or words contained in the body of the file. By name or associated title; keywords, language, author or range of dates. In OpenKM it is also possible to search according to the path, the possible categories assigned to the contract and within it, to apply other criteria such as type of document (file, folder, mail, record) or its extension. We could even look for information based on added notes. And the most efficient way to look for valuable information; thanks to the metadata. Extracted from the body of the file, through the zone OCR engine included in the document management software; or from databases integrated in the software. In this way, we can perform a quick search of the content that the Project Manager needs.

In addition, contract management software always has to agree with the strategy and policy of the company; to comply with the contractual conditions, to promote the application of best practices, and to obtain the coverage of the departments involved, in the provision of services or delivery of products. And to allow the control of other key aspects in contract management.

We shouldn’t forget what the company's objectives are. What are the critical factors in the success of the contract? Are there established service levels? What is the communication plan, etc. The document management system should allow corroborating deviations throughout the contract lifecycle.

In this aspect, the automation of business processes contributes to enhancing compliance with the policies of the company and the defined procedures, in order to achieve the objectives of the contract. Or we can also choose to use workflows; that provide a univocal way of managing complex tasks and processes; so that compliance with criteria is guaranteed, since users can not access advanced stages of the process, without meeting the criteria of previous phases of the workflow.

All this helps to mitigate the risks derived from the participation in contracts, in any sector. We could consider of special relevance the contracts related to the construction industry, subscribed with public administrations; in which the breach of important dates can lead to the application of onerous clauses for the company.

Because the document management system, which is used by the Project Manager to apply the contract lifecycle management is part of the contract, and must allow the governance of all aspects related to the project.

The document management software must allow all the participants in the contract to access the information and documentation, that they need to carry out their work. OpenKM allows the application of security in 3 levels. First, the users must have login and password to access the system. Secondly, each user will have assigned a profile that defines the features accessible to them. And finally, the security applied at granular level allows each participant in the contract to access the documents, folders or files that are their responsibility; avoiding accesses not allowed to other environments.

The contract management software has to contribute to maintaining a fluid communication between all the parties involved. In this sense, the OpenKM Relationships section allows users to link one document with others, based on the type of relationship defined by the company. These relationships can be of different types, in order to respond to any situation. In this way, the user who search for a document, can see with what other files it is related; what kind of relationship binds them and from the selected file, access to the linked documents.

The security architecture offered by the OpenKM document management system; as well as a complete audit of all the actions carried out by the users, guarantee that the privacy policy established by the organization is complied with.

Through the online chat integrated in OpenKM, users of the human resources department that participate in contract management can maintain a fluid communication with the staff. Also, in the Notes section, we can add valuable information. In the Forum section, we can discuss aspects related to the document in and represent a point at which to obtain more information. And in the Wiki section, we can highlight the content sources of the file.

The Task Manager included in the document management software, allows arranging meetings, establishing progressive calendars and linking these events to tasks or projects, assigning in turn a state or typology; which the Project Manager can define. The organizer can also recommend consulting documentation, attaching them to the event, from which attendees will receive notification by email. This is one more element of the document management system, which allows the monitoring, updating and registration of all events related to contract management, to ensure compliance with the objectives.