Effective monitoring and management of contracts is an elusive challenge for legal, sourcing, and HR professionals. With hundreds of active contracts in use annually at global corporations, measurement of key deliverables can prove next to impossible. Blame it on the lack of metrics measurement that extends across a contract’s lifecycle from contract creation to its expiry/renewal.
Contract lifecycle management (CLM) metrics are applicable to sell-side as well as buy-side contracts. It is also beneficial for the administration of other contract types, such as intellectual property rights.
Certain metrics are critical at the pre-contract award (upstream) stages, while others at the post-award stages. Legal Department and other teams like Sales, IP, and Procurement can leverage best practices and automation in combination with pre-award metrics to ensure optimal operational outputs.
AI Technology has provided multiple ways to streamline the contract management processes over recent years. This ranges from consolidated contract data repositories to advanced contract capability monitoring options. To derive the best possible outcomes from the Contract Management methodology, it is imperative that these solutions are bolstered by robust processes and suitable metrics.
The use of pre-award and post-award metrics with a major focus on process, people, and support system is essential to achieve desired sell-side as well as buy-side outcomes.
Major Pre-Award Metrics To Track
This is the first whitepaper of our knowledge sharing series. It thoroughly examines five main pre-award metrics to be kept in mind by all contract management professionals. These are as follows:
- Contract approval turnaround time
- Business risk score
- Legal and Sales operation costs
- Compliance rates
- Deviation from standard clauses
