Contract Management Services –
Selecting the right company!?

Contract management services are the management of purchasing and supply contracts by external consultancy companies. So what criteria do you use to select your contract management solution?

Contracts are core to managing your suppliers and it is imperative that contract management is undertaken in a consistent, logical and fair manner. To ensure this you need to produce a considerably amount of management information and monitor:

  • Adherence to the contracts and Service Level Agreements.
  • Overall, spend per vendor, per product or service and all vendors.
  • Costs against the benefits accrued.
  • Any poor or non-performance.

The aim of your contract management services will be to ensure:

  • The overall security of key business information.
  • Increased cost savings by ensuring greater efficiency in the management of the contracts and vendors.
  • The ability to measure overall benefits to costs and problems associated with each contract.
  • Ease of operation and monitoring of each contract with an increase in visibility and control.
  • The production of regular and appropriate management information to meet the needs of your business.
  • Better contractual terms derived from the ability to choose vendors and negotiate with them from a position of strength.
  • The ability to encourage vendors to increase their performance derived from better vendor activity information.
  • Effective Service Level Agreements from as you have better monitoring and more information from which to work.
  • More productivity from procurement staff as the contract management services will remove much of the basic monitoring activities.
  • Risks and liabilities are minimized due to better information and system alerts and flags.
  • An overall reduction in spend coupled with an increase in profitability.

To ensure this your contract management services company will need to provide:

  • Security of your business information and communications.
  • Management Information as defined by your business.
  • Your per contract, per product and per product group information.
  • Flags and alerts when there is poor performance or non-performance against the Service Level Agreements and Contracts.

To ensure that you get the contract management services that you require, whether they be entirely system only or part system and part consultancy, you will need to first define the level and scope of your requirements with respect to:

  • Security.
  • Communications.
  • Management information.
  • Flags and alerts.
  • Detailed contract and product information.

Once you have this information you are able to review each of your options and make an informed choice, much in the way that you would choose any vendor.


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