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How to stop making costly IT contract mistakes

Sarah K. White | July 26, 2016
Poor IT contract management can cost your business time, money and legal fees. Here’s how to minimize risk by focusing on restructuring contract management and training employees around compliance.

And defining these goals around IT contract management wasn't just about saving the company. She knew that if the company found a more effective way to communicate these goals with the outsourced staff, they'd be happier and more productive as well.

Edleman agrees, noting that it's not just a matter of investing in new technology, but also educating and inspiring your staff around the new initiative. And part of that is considering contract management in the roles you hire for. Ensure that anyone you hire who will be responsible for any stage of the contract management cycle is comfortable and confident in the process. "By clearly identifying the importance of contract management within your organization, as well as the people and processes involved, is vital in initiating an effective and well run contract management process," he says.

Embrace the change

Businesses that don't reevaluate their contract management strategy risk not only facing legal ramifications or major losses, they'll quickly fall behind the times. Recent research from Gartner says contract management has quickly gone from something considered "nice to have" to something businesses "need to have."

For Carrell's team, success came when it decided to stray away from rigid contractual process and move to a more flexible and agile process that "allows for things to be constantly changing." She says that, through the process, business and their IT contractors will learn more and evolve the process, which is more valuable than sticking to an age-old plan.

It might even be time to focus on hiring people who understand the implications of contract management. Carrell suggests hiring people who will be invested in the design of the product, like a product manager for example, who can oversee the process.

Her advice is to focus on hiring people into this role who can focus on learning the ins-and-outs of contracts so they can make last-minute decisions, reprioritize on goals as needed and keep contractors on track for delivery. By choosing someone who can embrace flexibility and understand that contract management will always be an evolving process, you can feel more secure around contract management compliance within your own organization.

Edleman also suggests building out a well-staffed department. Consider hiring contract managers responsible for processing requests as well as negotiators who can interact directly with clients and template developers, who can manage and develop standardized templates for contracts. Beyond that, he recommends automating minute steps in the process to avoid errors and to free up your employees to work on more thought-intensive projects.

 

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