Let’s start by introducing Contract Ops: A contract operations person supports and maintains all the pre and post-contract signing operations. But one must not think of contract ops only as a “support role” as it’s a critical and strategic function for smoother contract management. Depending on the size and capabilities, most organizations prefer dedicating an entire team to run contract operations.
The rapidly evolving field of contract ops covers a variety of roles and functionalities, which are meant to reduce bottlenecks in the contract management process. This will increase productivity, and revenue, and decrease capital losses related to non-compliance. With the support from Contract ops managers, the decision makers like project managers or directors can focus on devising effective growth strategies. The contract operations people make the decision-making as effective as possible by analyzing contract data, generating progress reports, and sharing strategies to optimize the contract management process.
Contract ops roles are progressing in most organizations. However, some small or medium size organizations and often startups – struggle with employing effective contract operations management. The main obstacles they face include a lack of clarity in responsibilities and team goals, the overlap of work with other teams, and sometimes dealing with the wrong people in the wrong places. In the upcoming sections, we will be getting deep into understanding the role contract ops plays in contract management. This will be followed by pro tips for combating the obstacles in contract operations.
“Companies are making investments in improving the management of contracts after signature.”
– Deloitte
Contract operations functions and associated roles have evolved in the past decade. Earlier, contract operations were associated with the legal teams of the organizations. But, the scenario has changed and now the contract ops teams work with many different teams in the organization. Today, the broader purpose of contract ops is to maintain all types of contracts and enhance the contract lifecycle’s efficiency
To achieve this purpose, the contract ops person smoothens contract processes, makes better use of statistics and research, gives all contract-related updates, and reports to project managers, business owners, and other teams. Besides this, they perform a variety of functions. Let’s take a look at common contract ops responsibilities and different roles related to them.
- Managing daily or weekly updates to the contract repository related to upcoming renewals, obligations, issues or escalations, requests, and workflows
- Keeping contract and counterparty data in repository data up to date, maintaining correspondence, updating statuses, etc.
- Managing schedules, handling inquiries, follow-ups & reminders with contract stakeholders
- Creating tasks and reviewing status, adding comments, uploading documents, following next steps, reassigning pending tasks, sending reminders to concerned stakeholders managing escalations.
- Adding or updating Terms, Renewals, Amendments, Milestones, and Obligations
- Starting new contracts, new counterparty, or other relevant processes
- Search, share, or generate contract progress and performance report
Today’s Average Contract Ops Team Operations
The average or subpar contract ops teams still follow the same outdated ways to manage the contract operations. Usually, each department has a few personnel handling their contract operations. This leads to inefficiency as they use different tools for completing different operations which makes the process time-consuming. The tools used by an average contract ops team for different operations are as follows:
- Excel sheets for color coding, sorting and updating terms
- Reminder on renewals and obligations through emails on outlook. Document and contract template sharing is also done through emails
- A local network drive is used to download and store drafted documents
- New contract requests are made through emails or phone calls
- Decisions on renewal, amendments, etc. are made in meetings or phone calls
- Next steps and processes are often tracked in contract policy documents
Clearly, using these tools won’t result in standardized contract operations. Hence, excellent contract ops teams opt for contract management tools enabling them to complete all these contract operations from one platform in an efficient way. Now, let us look into some related roles or teams which collaborate with contract ops teams on different contract operations.
Different Roles Collaborating with Contract Ops
Contracts have become ubiquitous and almost all major teams in the organizations deal with some kind of contract or related process. Thus, contract ops teams have to work with executives or managers of different teams. Here are the different roles related to contract ops:
1. Business Owners, Directors
a) Final decisions on contract processes like renewals, compliance, obligations, starting a new contract, or adding a counterparty, among others based on the request of the contract ops manager.
b) Finalizing growth strategy with the help of contract performance reports, statistics, and insights given by Contract Ops Manager
2. Vendor and Procurement Managers
a) Take decisions related to upcoming renewals, obligations, and compliance related to buy-side contracts, vendor contracts, purchase agreements, and other similar commercial contracts.
b) To keep track of budget and spending, they ask for spending reports of contracts related to different purchase categories
c) Final approval of negotiations terms and vendor onboarding or deboarding
3. Legal and Compliance Specialists
a) Analyzes and interprets legal, contractual, regulatory, and legislative provisions related to contracts. Suggests alternative approaches wherever required.
b) Daily/weekly/monthly contract audit and performance reports
c) They set standards based on compliance-related provisions for contracting processes.
d) Based on the standards, the Contracts ops people review the contracts and identify escalations or unwanted issues.
4. Invoicing and Order Management
a) This team needs information related to pricing or discounts for orders and delivery-related contracts
b) They take actions based on obligations reports, pricing lists, and contract invoice data provided by the contract ops team.
5. Sales Teams
a) The sales team and managers deal with sell-side contracts.
b) With the focus on increasing revenue, they are interested in updates on upcoming contract renewals, new customer onboarding contracts, and revenue analysis reports given by contract ops people.
6. Business Users
a) General business users have queries related to contracts or they want to submit new contract requests.
b) Contract ops people assist them with new contract requests and resolve their queries related to general contracts or processes.
Contract Ops vs Contract Management: The Overlap and Differences
The overall functioning and responsibility of contract ops are often confused with contract management. Obviously, there is an overlap of functions but there are some differences between contract ops and contract management. Contract Ops is more like part of Contract Management and the scope of contract management is wider than contract ops.
Contract ops are related to the maintenance of contracts in the pre and post-signing stages. Contract ops people look after the contract and update their progress. They also identify and report issues or escalations to the stakeholders. With the scope of Contract ops increasing in almost every organization, they support the decision-making process of different teams with contract data analysis, contract progress reports, pin-pointing escalations, etc.
However, the main difference lies in the final decision-making power related to contract processes. The final decisions related to contract processes are not taken by the contract ops people and are taken by the project head, director, contract owners, etc.
What Are Common Contract Ops Headaches?
Contract ops managers tend to face a lot of issues that can be due to various factors. These can be due to non-standardized contract processes, outdated contract management practices, plain human errors, etc. Let’s understand some of the common headaches faced by contract ops people.
- Managing collaboration among different teams and counterparties is one of the main headaches as any miscommunication between collaborators can lead to unnecessary delays or escalations.
- As the no. of contracts grows, manually updating, reviewing, and tracking bulk contract data becomes time-consuming.
- Preventing or dealing with escalations and other unwanted issues arising out of human errors.
- Delays- Missing renewals, compliance, obligations, and deadlines leading to financial losses. Reviewing the progress of tasks assigned to other teams and ensuring on-time completion of negotiations with the counterparty
- Finding better ways of reporting and analysis to support decision-making on terms, SLAs, financials, and devising strategy
- Managing contracts through outdated methods like using excel sheets for color coding, sorting or sharing documents and templates through Emails, or collaborating on Phone Calls, Meetings.
With the understanding of obstacles faced by contract ops people, let us look into some pro tips to deal with these issues.
Pro Tips to Deal With Contract Ops Headaches
Following are some of the remedies which can be used by project managers or departmental heads to deal with the issues mentioned above.
- Use an automated contract repository to manage bulk contract data. Do away with the manual contract management practices and use a high-end automated contract management tool to deal with bulk contract data.
- Clearly assign tasks to collaborators and use version control to effectively manage the contract management process in the team
- Standardize contract ops processes in the organization to prevent unwanted issues
- Train contract ops people to adhere to standard process while drafting contracts to avoid any escalations
- Outline the complete contracting process to the counterparties to check any miscommunication
- Set up automated alerts, notifications, and reminders for counterparties or stakeholders to fastrack negotiation process
- Using AI-based CLM tools to deeply analyze contract performance and generate relevant insights that help in decision making
- Employ automated workflows and AI-based contract management tools to quickly track or review contract progress and improve reporting
With the understanding of why contract ops teams need high-performance contract management software, you can empower your contract ops teams to go above and beyond with a sophisticated contract management platform. eContract is a contract lifecycle management platform that is designed to match the needs of your team — and adapt to the rapidly changing business environment.
The eContracts platform with automated workflows and AI features makes it easy to start, update, review, and manage contracts helping your teams be more effective and get more done. The contract ops teams can generate reports on key metrics and get real-time visibility into contract workflows.
For more details on eContracts’ features or requesting a free demo click here.
