The terms "contract administration" and "contract management" are often mistakenly used interchangeably, blurring the lines between two distinct yet interconnected stages in the lifecycle of a contract.
This common mix-up does a disservice to the nuanced complexities and unique contributions of each phase.
In this guide, we're setting the record straight.
We'll first explore contract administration — the careful drafting, detailed planning, and foundational setting that precedes any contract's birth. Then, we shift focus to contract management — where these well-laid plans are brought to life, navigated, and adapted through the ever-evolving landscape of business needs and relationships.
By understanding each process, you can elevate your approach to contracts and learn how to use contract management software to take your business to the next level.
Table of Contents:
Contract administration is the foundational stage of any contractual agreement. It includes all of the planning and prep work a contract needs before it's signed, ensuring everything is set for smooth operation.
Key responsibilities of a contract administrator include:
Contract administration helps get all the details right from the start, setting the stage for a successful and dispute-free relationship between the parties involved.
Preparing a contract administration plan means thoroughly and thoughtfully addressing all the little details that go into writing a contract.
Here are a few steps you can take to write a successful contract administration plan:
Remember, a strong contract administration plan is just the start. The real efficiency and strategic advantage come when you evolve into comprehensive contract management .
While contract administration focuses on setting up a contract correctly, contract management involves the broader spectrum of managing the contract throughout every stage of its lifecycle . This includes creation, negotiation, review, execution, ongoing management, and renewal.
It’s a more holistic approach, ensuring the contract adapts and continues to deliver value throughout its duration.
While there is a little bit of overlap between contract administration and contract management, it’s important to understand what each term entails.
Contract administration is all about laying the groundwork for a contract, focusing on defining objectives, establishing scope, avoiding risks, setting timelines, and, of course, drafting the initial agreement.
Contract management , on the other hand, is a more expansive and dynamic process that covers the entire contract lifecycle.
Contract management includes:
While contract managers pick up where administrators left off, their responsibilities also extend beyond the scope of individual contracts to encompass the oversight of an entire database.
This approach enables organizations to organize, secure, and report on contracts en masse, leveraging technology to streamline processes and enhance decision-making capabilities.
They adapt to changes, manage challenges, and ensure the contract continually serves its intended purpose and aligns with evolving business goals.
The seamless transition from contract administration to management is underpinned by distinct roles and responsibilities.
Contract administrators focus on the initial phase, where their primary role is to set the contract on the right course. They’re responsible for creating a contract’s framework and foreseeing everything that could happen. Armed with this information, they can pass the baton to contract management.
Contract managers hit the ground running. Their role expands into dynamically managing the contract, ensuring it remains effective and responsive to changing conditions and requirements.
As part of their expansive role, contract managers also navigate the complexities of managing an extensive portfolio of contracts. This involves utilizing contract management tools to organize, track, and analyze contracts across the organization, ensuring a secure and efficient handling of the entire contract database.
The strategic importance of these roles is reflected in their impact on the contract's success.
Contract administration is vital in setting a clear, solid foundation. It’s the bedrock of the contract’s success, ensuring initial clarity and alignment with objectives.
Contract management is about the evolution and adaptation of the contract over time. Its strategic value lies in its ability to guide the contract through changing landscapes, continually aligning it with long-term business goals and market dynamics.
The strategic significance of contract management tools becomes evident in their capacity to handle contracts not just on an individual basis but across the entire organizational spectrum.
These tools empower businesses to maintain a macro-level overview by providing a centralized platform for organizing, securing, and reporting on an extensive array of contracts.
This is pivotal for informed decision-making, risk management, and ensuring compliance across all contractual agreements.
Transitioning from contract administration to management is a move that can significantly impact your organizational efficiency and contract effectiveness.
Here are a few steps you can take to ensure a smooth transition as you implement a contract management solution :
In contract management, having the right tools at your disposal is a necessity — and ContractSafe was designed with exactly that in mind.
ContractSafe boasts a powerful yet accessible suite of tools tailored to meet your business where it’s at right now.
Take advantage of features like:
By incorporating ContractSafe into your contract management strategy, you empower your team with the tools they need for effective oversight, strategic decision-making, and streamlined operations. Want to see it in action? Schedule a demo today !
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