How Do You Score On Contract Management?

 

One of the most recurring challenges that arises in property portfolio management is that of effectively managing the myriad of contracts that seem to rain down like snowflakes on operations executives. The difference is that unlike snowflakes they fall year round, regardless of the season.

The scope of service and supply contracts spans a multiplicity of arrangements, geographies, be they a single property, regional or national and of course, term and ‘fees and rates’. Every discussion I have inevitably surfaces three common observations:

1.       “I have a stack of contracts that I have to sort through and analyze and I have to read them all.”

2.       “It’s a thankless job but someone has to do it”

3.       “I can only imagine the negotiating leverage I would get if I knew what was actively being contracted for throughout my portfolio.”

A lot is being discussed about ‘Big Data’ analytics these days. Cool. But the fact is there are ‘Big Gains’ sitting right there in that stack of contract paperwork. I am also not suggesting that you hire contract negotiators, although in some areas they can be helpful, such as energy, trash and telecommunications procurement. The fact is, gaining control and analyzing your existing contract portfolio is truly not a big effort with today’s ready to go technology. It seems that the biggest hurdle is making a decision to just do it. Once done the automation and analytics flow easily.

Why do it? Take moment and see how you would rate yourself on the following 12 questions:

1.       How many contracts do I have?

2.       Who are all my suppliers?

3.       What are my rates and fees for similar services under different contracts?

4.       How do the terms in my contracts for similar services differ?

5.       What is my total portfolio spend in each contracted area – by service type and geography?

6.       Am I getting the correct volume discounts that are available?

7.       Which contracts need attention – now, because they are due for renewal?

8.       What are my ‘terms of service’ delivery?

9.       What are my contracted metrics for service delivery – the SLA’s?

10.   How many expired contracts do I have?

11.   Do I Have contracts that will soon roll over and renew at less than favorable terms?

12.   What are my risks and exposure positions?

 

Document management technology with search and discovery capability can help you get to those answers, speedily and cost effectively. The steps are few. It starts with capturing the documents (which is straight forward), identifying the essential contract elements, then extract the ‘hidden data’.

And there you have it. Meaningful, actionable insights, analysis and strategies can be at your figure tips.

As I always offer, if you would like to take a closer look at how this can work for you - send me an e-mail. I’d be happy to share my experiences with the state of the art in the technology of contract management.