Seven Steps to Implement Standardization in Contract Management

seven steps photoIf you want to make your contract management more efficient and see greater returns on your investment of time and effort, standardization could be the solution you’re looking for. Contract management systems and technologies, standardized contract language, templates, best practices, and lessons learned can yield positive, measurable results in effectively and efficiently crafting, administering and managing contracts.

In Part One of this series, I discussed the benefits of standardization and debunked some common misconceptions. In Part Two, I will discuss the importance of maintaining flexibility and offer some tips for implementation.

Why Flexibility is Important and Necessary in Standardizing Contract Management

Contract development and management is not black and white. So while standardization is essential, it must also allow for flexibility. Contracting officers and management can have mixed levels of appreciation for templates and checklists. Contracting Officers may sometimes feel it takes away their freedom of innovation and creative-solutions for contract development. Senior managers and even other stakeholders within your agency or organization may like the relative assurance of consistency and reduced risks in contract development. But a middle ground can and should be found as long as contract templates with standard terms and conditions are kept up-to-date with the most recent agency and government terms and conditions, rather than using the last contract document and hoping you catch everything that needs to be updated or added. Trust me, there is have a high likelihood that something will be overlooked.

Whatever standardization you employ, it must NOT be so rigid in every area that it disregards the need for flexibility. Yes, there are certain areas that this doesn’t apply to (standard T&Cs for instance), but there should be areas in the templates or contract writing system, for instance, that allow the acquisition team to tailor the solicitation and contract for the specific project requirements. So whether you use some sort of password protected Word document as templates, or a more robust database repository of terms and conditions, it must be flexible.

Preparing for Implementation

You’ve decided you want to implement some standardization solutions in your contract management processes. Based on my experience, here are some steps to take:

  • Identify opportunities: This comes down to a thought that there must be a better way to go about something. Maybe it takes too long, or it’s too complicated, or you’re always forgetting a step or missing a deadline. Thoughts like these indicate an opportunity to improve your contract management process.
  • Do your research: Once you’ve found an area for improvement, start researching to see what contract management solutions are already available. It’s probable that other organizations have had the same thoughts, and that existing solutions will meet your needs. This research might also make you aware of other automations that would be useful to your organization.
  • Build the case: Now that you are sure that you want to implement a solution, it’s time to build a business case to support the decision. Highlight the need you’ve discovered, and the benefits of implementing a solution or automating some processes. Make sure to discuss the quick return on investment when justifying the purchase.
  • Get people on board: It’s possible, if not likely, that people will be resistant to making changes to the contract management process. Share your ideas early to build support. Find those who also see the areas for improvement, and tell them about your ideas – a strong base of supporters can be helpful in championing the change.

After Implementation

Even after you’ve implemented a standardized contract management solution, that doesn’t mean the work stops. Make sure to keep the following in mind to keep your new solution effective:

  • Dedicate resources: Processes can change, and so templates will need to eventually be modified. It is also critical that terms and conditions are kept up-to-date. The upkeep and management of standardization will require labor hours, so make sure to account for the responsibilities.
  • Be flexible: One of the major concerns regarding standardization of contract management is that it is too rigid and stifles any creativity in preparing contracts. Not every contract is or should be the same, and so it is critical to allow for flexibility from contract to contract.
  • There’s always room for improvement: Similar to how you saw an area of improvement when deciding to adopt standardization, you should always be open-minded and looking for ways to stay current and improve efficiencies. The industry, regulations, and technologies are always changing, and so too should your standardization policies and procedures.

To sum this two-part blog series on standardization and innovation in contracts management, the bottom line is that it is important to realize these two concepts can and should co-exist, they are necessary to improve efficiencies in your contract management process, and they mitigate associated risks. Organizations, large and small, are able to gain these efficiencies, and can leverage innovation and technology to make it happen. The benefits of standardization in contract management are proven to provide strategic advantages in business operations without impeding creativity or decision-making of the contract professional (Part One of this series).

What is your experience with standardization and innovation in contract management?

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