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Clearly, good contract development and management is highly beneficial for your organisation. And a great place to start is to realise that a best practices solution is one that puts the contracts not just in the hands of those who create them, but also in the hands of the people who implement them.

Best practice in contract management is also about providing continuity through the entire process so as to enable everyone to have the necessary visibility so they can perform their tasks effectively and efficiently.

But to do that properly means going beyond the traditional contract work traditionally done in Legal to encompass Finance, Operations, Sales, Management and Services to add real value to the entire enterprise - and get the kind of boost the IACCM says is possible.

ABSOLUTE BEGINNERS
Such new approaches must start with your specific process, however - not that of any other organisation. So regardless of how rudimentary or cumbersome they are, standardise and communicate your processes to the stakeholders involved with this project. It is only after processes are documented that you can examine, understand, and optimise them. Also, if your project is done in conjunction with a new software system, make sure there's flexibility to tailor it. Any system should support a solution, not create new problems.

Let's look at optimising contract creation and building in value from the beginning in more detail. While there are countless opportunities for improvement in this area, the following four to-do items are a good starting point for most contract management improvement initiatives - and can deliver value back very quickly.

• Create a template library that streamlines contract creation and facilitates negotiation. Such a library should enable you to: securely maintain version control, change, add, or delete templates without IT, support negotiation by including pre-approved alternative clauses and quickly implement modifications mandated by regulatory or market changes.
• Automate the review and approval process. Workflow routing does more than just reduce cycle times; it also maintains a complete audit trail that makes financial processing easier and simpler. Effort is required to make sure that the review and approval process is well defined and simple; but it's worth it, as combining simplified procedures with automation delivers a significant performance improvement.
• Establish a method to handle custom agreements. Custom contracts tend to be high-value, high-risk affairs - so any system that can't handle exceptions is doomed from the start. A best practice solution should allow every transaction, even those done on paper, to take full advantage of the system controls in negotiation support, workflow, and audit trails.
• Build in visibility to the contract pipeline. Nothing is more important than the contract pipeline. That means you have to be able to enable the team to quickly answer such questions as: what stage is a sales contract in, and when will the revenue be recognised? What am I spending in the next quarter? Access to this information is a best practice contract management essential.

THE DM IMPERATIVE
You've completed this hard work. What comes next? What you do with an executed contract, and how do you integrate it into your business? That's just as important as developing the contract, after all.

The essential element of a best practice contract management process is a central repository for your enterprise's signed contracts. This is the cornerstone upon which other procedures are built. One study a few years ago revealed that 10% of contracts, across all industries, simply end up lost - avoid becoming part of that depressing statistic!

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