Managing Risk using contract management software

Managing Risk using contract management software
Managing Risk using contract management software

Tips for reducing contracting risk using contract management software


Simple Contract Risk Management Techniques

(1) Keep track of key project milestones for the contract

Using Contract Management Software, make sure you are adding milestones for each contract. For example, if the contract is for a service project from a vendor , split the total schedule of the project into key mile stones and then add each milestone as an entry to track reminders. By following this simple approach , you are pro-actively managing the contract risk by tracking key milestones and the contract management software will send you reminders on or before the milestone date so that appropriate actions can be taken at the right time.

(2) Keep track of Contract Expiry Dates

Good Contract Management Software usually reminds the user about all upcoming contract expiry in a great user interface. Also , the contract expiry reminders are sent automatically by the software from time to time and user is always aware of which contracts needs to be looked at as part of effective contract management process.

(3) Keep track of Contract Actual Value vs Contract Budget

Since the most important return on investment (ROI) the contract management software brings in is cost or monetary based, the software should be capable of tracking the budgeted cost value against the actual cost value for the contract and track any deviations and alert the user in a timely manner.

(4) Research more on your contracting party metrics

As a first step of managing contract risk , the contract management software provides you the ability to quickly search and understand contract related metrics. For example , by default you should know how many low, medium and high risk contracts you have signed with your contracting parties at any point of time.