Contract Obligation Management – 2
10th July 2017
by Arthur Raguette
In our previous blog post, Contract Obligation Management – 1, we established the importance of managing contractual obligations well. Today’s blog post will address the reasons why it is difficult to ensure that contractual obligations are successfully met by all parties involved.
A lot of enterprises rely either on manual methods or on Microsoft Excel to store contract data. However, when there are a lot of contracts to be managed, Microsoft Excel lacks the scalability and functionality to cater to an organization’s dynamic requirements. The main issues faced by organizations in tracking obligations are:
1. Too many contract obligations to track
Large organizations have an overwhelmingly large number of contracts containing an even greater number of obligations. Keeping track of such a huge number of obligations, without any way to configure alerts and reminders, is an arduous task.
2. Difficult to determine contractual obligations
Identifying obligations in a sea of complicated technical wording, page-after-page, makes the process even more complicated.
3. Taxing to enter data manually
Updating data for contract milestones, penalty clauses, and more, in spreadsheets, is cumbersome and error-prone. Even if the data is laboriously entered, tracking it effectively is still a problem.
4. Obscure ownership of the contract obligations
There is often a lack of clarity regarding the ownership of contract obligation management duties for specific agreements. Often, the spreadsheet owner and the person responsible for managing the obligations of a specific contract, is not the same.
5. Data distributed across disparate systems
Actual and target value comparison is difficult to observe since actual value data is spread across multiple disparate systems such as ERP (Enterprise Resource Planning), CRM (Customer Relationship Management), FMI (Financial Management Information) and HRM (Human Resource Management).
Furthermore, contract obligation management isn’t something that you do once and then rest easy. It needs to be performed on an ongoing basis, throughout the lifecycle of every contract. There is, however, an easy way around this. To manage such a staggering number of contractual obligations, one needs an automated system that can offer configurable alerts, reminders, and act as a secure repository of all contracts and supporting documents with user-defined access.
- Benefits of Automated Post-Award Contract Management
- Does Post-Award Contract Management Really Matter?
- Contract Obligation Management-3