Contract Managers are responsible for the entire lifecycle of a business’s agreements, playing a critical role in supporting business goals, objectives and overall operations.
Contracts require technical and strategic oversight, but this expertise must also be balanced with effective interpersonal skills as the Contract Manager acts as the intermediary between the business and its suppliers.
In this article, we take a look at the responsibilities of Contract Managers, the characteristics and skills that can lead them to success and the areas of knowledge they need to have.
Many of these skills discussed can be developed over time through hands-on exposure, mentoring and formal training. You can also download the Complete Guide to Contract Management via Gatekeeper to find out more about what’s required for successful contract management.
What do Contract Managers do?
Contract Managers can and often do have a role in the writing, negotiating and executing of contracts for their business. They are responsible for the performance and outcomes of each agreement, ensuring that the expected benefits are realised.
Key tasks include project management, financial management, contract tracking, reporting and managing the contract end-to-end.
However, it’s important to note that their roles and responsibilities don’t just start and end at the inception and close-out of a contract.
There are many other areas where Contract Managers contribute at a strategic level, especially during mergers and acquisitions or during cost-cutting cycles. You can read more about these roles and responsibilities below:
- The role of contract managers in Mergers, Acquisitions and Divestments
- Recession Planning And Preparation For Contract Managers
Contract Managers are ultimately responsible for successfully managing each stage of a contract’s lifecycle. As there are seven stages including negotiation, execution and operation, successful Contract Managers will need a broad range of skills and a depth of knowledge in multiple areas. We look at some of the skills needed for successful contract lifecycle management below.
Key Qualities of Successful Contract Managers
Effectively communicates from initiation onwards
Contract Managers must be able to take an objective or brief from the business, consider it in the context of its current operations and environment, and use research skills to determine how best to manage a new contract and who should be involved. This will help them to align organisational goals and best practice contract management strategies.
Contract Managers have a responsibility to align organisational goals with best contract management strategies, while building and maintaining cross-departmental collaboration.
Contract Managers need to be able to clearly communicate contract requirements to administrators, Procurement and Legal, so all departments work towards the same goal.
The ability to communicate well in both written and verbal scenarios will allow Contract Managers to build meaningful relationships with stakeholders, senior management, colleagues and selected suppliers so contracting processes run smoothly.
Negotiates from a position of strength
Maximising the value from agreements is a key performance metric that many Contract Managers are measured against. This value can have different definitions based on the business’s objectives but can include:
- The cost-effectiveness of a contract in comparison to the rest of the market
- Goods and services being delivered to deadlines to support business operations
- Goods and services being delivered within an agreed budget
- High levels of compliance with obligations by all parties to the contract.
A contract is made between two parties so the agreement must be mutually beneficial. To reach agreeable terms while building long-lasting relationships with third parties, Contract Managers will need to be empathetic to the supplier’s point of view, without conceding to tactics that may be used to increase the overall price, for example.
How confidently a Contract Manager can negotiate will often determine the terms of the contract, how much value the business can extract and if the agreed benefits are realised.
They will need the confidence and tact to take an opposing position where required, without causing unnecessary friction that will frustrate the relationship. Confidence, understanding and general market awareness will allow Contract Managers to negotiate the best terms before the contract is executed or renewed.
Understands regulations, legalese and different contract types
Interpersonal skills such as communication, confidence and empathy will help Contract Managers to take control of their portfolio and deliver the results they want to achieve. However, the ability to support a business that has contracts and operations across the globe requires knowledge of laws and rules relating to their industry and location.
Knowledge of regulation, legalese and different contract types are the bedrock on which Contract Managers build their ability to guarantee compliance and protect the business from regulatory, financial and reputational damages.
The more complex a business’s operations are, the more locations it operates in or serves, the more there is to know. Contract Managers can be required to understand everything from data privacy laws such as GDPR right through to Anti-Slavery Laws depending on where they work.
The more a Contract Manager can understand about the businesses, contracts and language they are dealing with, the more they can have confidence in overall compliance.
Manages risk across the entire portfolio
Each stage of a contract’s lifecycle has the potential to introduce contract-related risk to the business. Whether it’s uncertainty around suppliers delivering their services, compliance certificates passing their expiration date or ensuring that data is stored securely, Contract Managers have many spinning plates they need to control.
Contract Managers need to proactively identify the potential for risk and plan effective mitigation strategies. They also need to be responsive to unexpected situations.
Although not specific to the industry, there are a number of contract management skills Contract Managers require to manage and mitigate risk across the organisation. This includes paying close attention to detail and being thorough when writing, negotiating or reviewing contracts.
Contract risk can easily increase if things slip through the cracks or small but significant pieces of information are incorrect. This can include:
- Ambiguity around a particular clause due to the omission of a particular word
- Missing end dates, or start and end dates being captured inaccurately
- Clauses that may not be acceptable to stakeholders or senior management
- Undefined terms that can later lead to disputes being raised.
While Contract Managers can bring these skills to the table, businesses need to support them by giving them complete visibility of the contract portfolio. Contract management software that provides a centralised repository will equip individuals in this role with the tools they need to identify and mitigate risk more effectively.
Takes early corrective action to improve contract performance
Successful Contract Managers know that they can’t take their eye off the ball once the contract is executed. Rather than simply trusting that the contract is running as it should be, great Contract Managers will proactively monitor a contract’s output, assess third-parties against agreed Key Performance Indicators and resolve instances of poor performance.
Effective Contract Managers will be able to measure performance, be comfortable identifying changes that need to be made and have confidence communicating these to third-parties.
Poor performance can appear in many ways such as obligations not being met and incorrect goods being delivered, both of which could lead to operational delays or even failure for your business’s operations.
By continuously monitoring performance and proactively identifying potential for things to go awry, Contract Managers can act early, prevent poor performance from happening and keep contract processes and business operations running smoothly.
If you are a Contract Manager looking to further improve areas such as risk mitigation, performance management or overall compliance with the use of technology, get in touch to see how ContractNow can help you to support your business.