A main selling point of contract management systems is that they send contract managers automated reminders when a contract is due to renew, expire or needs renegotiating. And this helps you to stay away from the inept contract renewal methods. You recognize that letting uneconomical contracts auto-renew is costly, and know that they need review, but what’s the next step?
What happens once you receive notification that a contract is up for renewal? What should you look at, and how does a contract management system expedite the review and renewal process?
- First, give your team enough time to review the contract by setting the auto-reminder well in advance of when the contract is due to renew. You’ll need time to not only review the contract, but also compile additional reports (and/or request information from other departments) and possibly negotiate new terms as well.
- If your contract management system (like ConvergePoint’s software) handles obligation management, look back through the system to see if obligations were met properly and in a timely manner. Consider any comments, notes or discussions that were made here and during mid-contract reviews. Look back at what concerns people had at the time.
- Also make sure your system allows for addendums and other supporting documents to travel with the original contract, so you can evaluate all information at once — especially any changes that might have been made while the contract was in effect. Compare the costs agreed upon in the contract to actual costs — were change orders, additions or revisions made that affected the cost?
- Your system should also produce ad hoc reports, which should be evaluated as well. Consider how long it took to approve the contract initially and how long the approval, execution and obligation management processes took.
- Lastly, be sure all contact information and dates are up-to-date. People, positions, titles, phone numbers and addresses can change over the course of a contract’s execution, so make sure your point-of-contact and his/her information has not changed. That way, if an issue or question arises, you have someone to whom you can reach out, and don’t have to scramble or chase down a new contact. When you’ve decided to renew a contract, also make sure to set new dates for obligation and renewal management in your contract management system.
At ConvergePoint, we combine our turnkey Contract Management Software with a knowledgeable IT team to help contract managers streamline their processes, from contract requests through renewal management. Whether you’re looking for guidance on industry best practices or top-of-the-line support, we’ll tailor our software and advice to your needs. For more information, take a look at our white paper, Achieving Efficient Contract Lifecycle Management.