The Basics of the Role: Contract Management Job Description Guidelines

The Fundamentals of Contract Management

Contract management is a critical discipline that plays a central role in the success of virtually every industry. From ensuring legal compliance to minimizing risk, the role of contract management professional is pivotal to operational efficiency. Broadly defined, contract management is the contracting parties’ process of systematically and efficiently managing contract creation, contract execution, and contract analysis for the purpose of maximizing financial and operational performance at an organization , all while reducing financial risk. Practically speaking, this includes such things as sourcing, negotiation, execution, contract performance, renewals, and renegotiations, and contract termination.
Successful contract management can be challenging, especially as the size and complexity of contracts increase, and because contracts have become more intricate, corporations and organizations are hiring far more contract management professionals than ever before.

The Duties of a Contract Manager

The primary responsibility of a contract manager is to oversee the legal agreements that bind not only the organization but its stakeholders as well. This is the individual that you can consider the gatekeeper of your company’s most critical agreements, liabilities, service level contracts and intellectual property. Contract managers work with internal and external parties that help grow your business by bringing in new clients, new vendors and ensuring your business can participate in bids.
Contract managers possess detail-oriented skills that enable them to draft, negotiate, communicate and maintain continuous legal compliance with all legal agreements that are entered into by your business. This positions a company to maximize their profit and reduce the likelihood that a contract could be held invalid due to the fact that there was negligence or incomplete information.
Another large part of a contract manager’s job description is to deal with how the contracts and agreements affect the bottom line. This means that they can renegotiate contracts when necessary to make them more cost-effective. Additionally, if a contract is no longer necessary or has it has become obsolete, the contract manager times the termination or withdrawal of said agreement.
Contract managers also audit a company’s contracts to ensure that they are consistent with guidelines. All of this ensures that legal vulnerabilities are prevented from happening. It is the responsibility of the contract manager to make recommendations for improvement when guidelines are not being followed.
Finally, a contract manager is the lead negotiator, mediator and facilitator in the changes that are made to contracts. They are responsible for communicating effectively with the various negotiating parties while at the same time remaining firm and equitable while adhering to the organization’s best policies.

The Top Characteristics of a Contract Manager

Success in contract management requires a number of different skills. First and foremost, contract managers must possess strong analytical skills. Organizations often enter into complex and lengthy agreements with their business partners, and it is imperative that these agreements are managed effectively. Analytical skills empower contract managers to interpret agreements diligently, identify key issues, and spot potential red flags much earlier in the process. This enables businesses to take action sooner in addressing concerns and provides contract managers with the ability to offer informed recommendations to decisionmakers.
Attention to detail is another crucial skill in contract management — and a skill that can easily be overlooked. Contract managers are tasked with reviewing many agreements, some of which may be thousands of pages long, and it is important to be able to spot errors or discrepancies while also managing numerous agreements at once. Lacking attention to detail may result in overlooking critical terms or even misinterpreting the meaning of certain provisions. Such errors can have significant consequences – from financial implications to damaging the company’s relationship with its business partners.
Negotiation skills are key to successful contract management. Particularly if responsibility for overseeing an agreement passes from one contract manager to another over the life of the agreement, thoughtful negotiation skills remain essential in any circumstance where one party wishes to amend the agreement and the other is resistant. Being open to honest and cooperative negotiation helps to preserve relationships and seek mutually beneficial outcomes. When negotiation skills are lacking, relationships suffer and contracts may instead become contentious.
Finally, understanding the legal framework around business contracts is paramount. Legal knowledge, along with an understanding of the risks associated with contracts, can help organizations to avoid problems related to breaches and disputes. A strong legal background in this arena will also better enable contract managers to help their companies to take an informed approach in pursuing its goals.

Qualifications and Training

A career in contract management typically begins with a bachelor’s degree in business administration or a related field. Some employers, particularly the federal government, may prefer candidates with a master’s degree. These degrees need not be focused exclusively on business or finance, as long as they contain appropriate coursework in contract law.
It is also helpful to have some experience in contracts administration. This can come in a variety of ways. You may take a position as a contract specialist with a government agency, where you are usually required to complete a formal training program . Alternatively, companies in the private sector may hire contract specialists without relevant experience if they have a strong educational background. In other words, even if you lack hands-on experience, having an advanced degree in a relevant field may still get you a job in contract administration.
Certification is not always required, but it can help. Two organizations that provide contract certification programs are the National Contract Management Association and the International Association for Contract and Commercial Management.

Common Issues in Contract Management

Contract managers often face a range of challenges when managing a contract. A common challenge is the management of complex and detailed contracts. A multitude of factors can make a contract unnecessarily complex, including contract terms, conditions and other legal implications. Complex contracts may also result in confusion as to which party is responsible for which aspect of the contract. This confusion can lead to miscommunication.
Some contract managers find it hard to manage the performance of the parties to the contract. Regular monitoring is often required to ensure the contract is being performed appropriately, so contract managers need to be vigilant about the parties’ obligations under the contract. However, contract managers also need to ensure that they properly document the parties’ performance under the contract. Poor documentation can lead to complications in situations where contract managers are required to rely on documentation to protect their interests.
There is also the risk that the contract will not be properly carried out, so the contract manager needs to act promptly to ensure that the contract is fully performed. A contract manager will need to be proactive to mitigate the risk that the other party will be in breach of contract and be prepared to respond appropriately in the event of a breach. Contract managers may also need to ensure that their respective contractors perform their obligations, which may be difficult in the case of third-party contractors.
Contract managers must consider a range of issues, so their role is often challenging. By anticipating and preparing for many common challenges, contract managers can minimise the impact of issues on their day-to-day responsibilities.

Emerging Trends in Contract Management

The future of contract management will be shaped by technology to a far greater degree than any role in the past. For decades, industries and businesses have evolved at a much slower pace. Contract managers who sought out new technologies early were immediately more valuable to the organization. Those with outdated skillsets quickly fell behind.
For those reasons, it’s worth noting some upcoming trends and their impact on the future of contract management and the contract manager.
As this trend continues, contract management software will evolve from being simply a repository for contract information to being central to contract management and procurement. Advanced contract management software includes integrated solutions with vendor management, procuring resources and managing the entire lifecycle all in one place.
One of the most important challenges a contract manager will face over the next five years is finding new ways to access preapproved contract templates, identify areas of vulnerability and make them less vulnerable .
Contract managers will begin relying heavily upon artificial intelligence to perform much of the contract review and analysis work. Not only will this help minimize risk, it will also help speed-up the contract approval process.
Contract managers will be the first to adopt and implement artificial intelligence as part of their everyday life. Those who are resisting the wave of advancement will be left behind.
Internal customers will demand that the contract manager keeps up with their technological demands. They will insist upon having the same level of access and ease of use as they do with other websites and mobile applications.
All of these technological advancements lead to one thing – the need for autonomy. Contract managers will need to shift the mindset from "I need your approval" to "this is how we get things done."
While the role of the contract manager will change dramatically over the next several years, the need for contract managers to understand advanced contract law remains as critical as ever.