The delivery of a contract requires effective monitoring to control the financial and legal risks incurred. These risks increase when the contract evolves to meet a need that has changed: this is when the contract management intervenes. This complex task is sometimes assigned to the buyer who must ensure the proper implementation of the project, maintaining a stable relationship with the supplier and keeping control over the costs. Knowledge in legal and financial, communication fluency, ability to anticipate, global and transversal vision … become essential assets in risk management and conflict resolution.
To feed on information held by teams
To be credible during its exchanges with the supplier, the buyer must have first collected as much information and technical details about the project from the departments concerned: technical and / or project manager, lawyer, accountant supplier, among others … It is also up to the buyer to make the link with the teams: for example, in case of request for additional remuneration from the supplier, the buyer must consult the internal services to determine with them if the claim is justified.
Guarantee a clear communication process and a relationship of trust with the supplier
At the beginning of the contract, the supplier may be in direct contact with the technical prescriber and / or the project manager to understand the technical complexities of the project. To avoid being exposed to nonsense or contradictory information, it is essential that the buyer positions himself as the main contact for the supplier by centralizing the remarks to guarantee the commitments of each. Mastering the communication with the supplier is also developing a relationship of trust with him: his support will be appreciated in case of difficulties on the project. Organizing meetings, knowing how to listen well and question the supplier, is to create an environment favorable to the good development of the project. It is also a way to avoid potential hidden costs and thus guarantee control of the Total Cost of Ownership (TCO): the overall cost of the service including direct and indirect expenses.
Track items exchanged with the supplier …
The buyer must be able to have at any time the following information: the additional remuneration costs requested by the service provider, milestones stages of progress, billing and payment status … for this, it is essential that the buyer has effective tracking tools.
… to better anticipate risks
The worst case scenario is the termination of a contract by a major supplier in the middle of the project. Avoiding this situation is the challenge of the contract management that combines supplier relationship and cost monitoring, to better predict the movements of the subcontractor!