Contracts are an instrument of business, yet they remain one of the worst managed components within an organisation, often leading to the mismanagement of operational processes that in turn impact efficiencies and put a company at risk.
The bottom line is that companies need to take charge of their contracts and they need to do it today. It is with this that Quintica and business partner Caridon are today offering Contract Risk Training for business people who need to understand contracts, acknowledge their importance, manage the knock on effects they have on the people they affect, in a bid to ultimately negate any legal / risk implications they may pose for the business.
“Successful companies require various management systems to effectively and efficiently carry out the numerous operational processes within the organisation, however the least recognised aspect of business management centres on risk and contract management,” states Kerry Evans, managing director at Quintica Africa. “In the past contracts were left to the legal team, who often signed these without any understanding of the roles and responsibilities of those who are affected by them.
“Contracts vary in nature and should rather be seen as an active instrument for managing organisational and business risk. They should not be drafted, filed and forgotten they should be used as a daily mechanism to which teams deliver on their business KPIs,” adds Evans.
To help companies understand the risks associated to bad contract management, the Quintica Contract Risk Training touches on the impact lost contract documents, unsigned contracts, no contract documents or verbal agreements, failed version control and expired contracts, all have on a business.
The training explores the relevance and importance of a Contract Management System, the need for risk assessment to be conducted around each contract, and the appointment of a person or team to track the status of the contract execution from signature to termination. It also explores how business must get a better handle on contract events such as escalations, price adjustments, rebates, anniversary dates, renewals, reviews and the dependencies between contracts, all of which needs to be actively and continuously monitored, administered and managed.
“Everyone who is affected by a contract in the business needs to know what the contract contains and they need access to the document at any given point, so they don’t personally fail in their required KPI as well as in their role in managing the business process. Like any management system, there must be formal policies and procedures in place to govern contracts and direct those who work with them, and this cannot be a simple manual process,” says Brian Henry, managing director at Quintica partner Caridon.
Henry adds that the training also delves into contract negotiation, the importance of who is conducting this and whether or not they have the legal qualifications to handle this. He says it teaches teams to ask questions of the contract environment, namely: are there standardised ‘contract templates’ drafted by the legal department; does the negotiator own the contract after signature and is the owner trained in managing the contract through its life; and do the owners and affected parties know what other contract may be affected should the execution on this contract fail.
“In other words we aim to provide people with the tools to better understand the risks and impact inherent in a contract. While technology can help automate this process, it will only be successful if contracts in your organisation are classified, categorised and the risk, and impact of ownership is documented. We believe we can give you and your teams the edge when understanding contact management,” ends Henry.
Quintica is an ICT specialist organisation that focuses on the UK, Middle East and African markets offering a full range of solutions and services out of 10 offices in eight countries. As a professional service management organisation we offer a range of consulting products, integrated BSM solutions, technology and outsourced managed services into the telecommunications, financial services, insurance and resources industries.