What Happens When No One Owns Contract Management

Have you ever had to find a contract, but you weren't sure who to ask? Chances are you're operating in a decentralized contract management environment. There's no one person or department that has ownership of all contracts across the organization.

Every department has their own method, their own process, and their own rules. And it's absolute madness.

In this video, we're kicking off a four-part series on "The Problem with Decentralized Contract Management".

Want a crash course on contract management?

Check out our free video course on "The 4 Pillars of Contract Management". You'll discover a step by step process to streamline your contract management process to save time and money.

Click here for immediate access to the course (FREE).

Video Transcript

Think about the last time you had to find a contract in your organization.

Now, think about all the people you had to talk to just to get to that contract.

You probably started with Procurement, and then they sent you to Legal, who said maybe you should go talk to IT or Finance.

And in the end, you were probably huddled around some admin’s computer, trying to find the contract in their emails.

Over the last several months, I’ve written articles, posted videos, and talked to a lot of organizations about what drives inefficiency in their contract management process.

And at the core, there are really four issues with decentralization:

[1] There’s a lack of ownership of the contracts

[2] There’s a risk of being exposed to your supplier agreements

[3] There’s a lack of adherence to the actual terms and conditions that were negotiated

[4] There’s an exposure to audit — both internal, and external.

Today, we’ll look at the issue of ownership in a decentralized environment.

And the issue is, when you decentralize contract management across your organization, the responsibility to actually manage those individual contracts falls upon somebody within a department or a business unit -- sometimes even on a small team -- and that individual more often than not isn’t a contract manager.

In fact, they were probably hired to do something completely different.

So, when the responsibility of contract management falls on them, they’ll create their own processes and ways of tracking their renewals.

Which may be fine...

But the moment you start adding more contracts to that person’s plate -- or even worse, if they leave the organization -- well, then their process falls apart and you have chaos.

I can’t remember how many times I’ve gotten a call from a supplier letting me know our support expired because the person they were dealing with didn’t renew our contract.

And if you think about the cost of reinstating maintenance on even one contract, you really start to get an idea ofwhy it’s so important to have all of your contracts managed centrally.

The reality is, you want all of your contracts in one central location, being managed by a proper contract’s manager.

Ultimately, you want to implement some tool to assist with this function.

But until then, a quick fix is to get all of your contracts into one place.

It could be anything: a share point, a shared drive on the network, even a metal filing cabinet.

As long everybody in the organization knows where all of the contracts are.

And then categorize them: you can do it by asset type, by department, by spend — whatever metric works for your organization.

That way, one person -- or maybe even a small team -- can take ownership of all of the contracts.

Now, if you’re interested in learning more about good contract management, we’ve put together a free video course on the four pillars of contract management, which will show you exactly what a good contract management process should look like.

And you can get immediate access to these videos just by going to oneviewnow.com/course and signing up.

So, that’s it.

Watch for our next video where we’ll talk about the risk of exposure to your supplier agreements.