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Stage One: Contract PreparationIdentify Your Needs, Establish Goals, Set Expectations, and Define Risk. Stage Two: Author the Contract. Stage Three: Negotiate the Contract. Stage Four: Get Approval Before Finalizing the Contract. Stage Five: Execute the Contract. Stage Six: Keep Up With Amendments and Revisions.
A Contract Management System (CMS), sometimes called Control Lifecycle Management manages the production and management of contracts, Service Level Agreements (SLA) and Procurement Master Agreements. Contracts are core to any business's procurement activities.
Contract management is the process of managing contract creation, execution, and analysis to maximize operational and financial performance at an organization, all while reducing financial risk. Organizations encounter an ever-increasing amount of pressure to reduce costs and improve company performance.
The contract management process is the interaction between the vendor and the purchaser that ensures that both parties meet their respective obligations in any procurement relationship. The aim is to meet the operational, functional and business objectives required by the contract and provide a profitable interaction.
The contract management plan is an input/output document that outlines the method in which a specific contract will be administered and executed. A contract management plan is a subsection of the projects main project management plan. This term is defined in the 3rd edition of the PMBOK but not in the 4th.
Systems contract, as the term suggests, is a contract of system of buyer with that of the seller. It is a release system in which items, usually, commonly available off-the-shelf, are identified and repriced in anticipation of certain usage. Delivery releases are made against existing orders placed by purchase.
Contract Management is important, because, as mundane as it sounds, it is another part of the sourcing process that can bring a number of benefits to the organization. This helps to decrease maverick buying and decrease supply risk while increasing spend leverage.
The importance of contract management is to provide a system that can streamline processes for you to easily engage, update, review, amend, and audit contracts throughout the procurement life cycle.
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