People, processes, and technology are crucial elements that drive performance and enhance resilience in an organization. It is a go-to model for several organizations where people refer to the individuals who work there. The process aspect is about aligning people with tasks, procedures, and culture and the role of technology is to automate the processes and enhance efficiency.
The people side of the business includes employees, managers, leaders, and stakeholders who work toward the organization's vision. Having the right people on board and assessing the competencies of your workforce is the first step in implementing a process for contract management.
For organizations where contracts are integral to their business, empowering the team with the right contract management system can make all the difference.
Why do organizations need a high-performing contract management team?
The world of contracts has changed for the good. Contracts are now an essential part of any business and those days of using the basic and conventional contract agreements are long gone. Today, businesses ensure that contracts use sophisticated wording that reduces the chance of any conflicts by detailing the obligations outlined in the contracts.
These multifaceted agreements are complex and handling these complicated documentations calls for expertise beyond legal knowledge. For example, clauses related to intellectual property or data protection can be seen in modern contracts, and addressing those clauses could be difficult.
Owing to these complexities in contracts, it is important to build a high-performing team that possesses not just strong legal knowledge but also a thorough understanding of your business objectives.
Risk mitigation and compliance: A high-performing team that is well-aligned with your business can spot potential red flags, find threats, and help stay compliant.
Efficient processes: Right from contract creation to execution and reporting, a cohesive team can streamline the contract lifecycle and improve the process efficiency.
Communication: Improved communication within the team improves value. This reduces delays or any redundancies in tasks.
Strategy: When managed properly a contract can be more than just a legal document. A high-performing contract team uses contracts as a strategic tool to strengthen partnerships with customers or clients.
Let us learn some of the core skills and qualities that constitute a high-performing contract management team.
Core skills and qualities for contract management team members
- Negotiation skills: Contract negotiation is a key skill where the contract managers try to achieve a win-win solution for both parties through skilled negotiations over terms, conditions, and prices. Some of the key negotiation skills involve research and preparation, effective communication, emotional intelligence, strategic thinking, building rapport, active listening, and asking the right questions.
High-performing teams invest a good amount of time to stay updated through training sessions with seasoned mentors. They seek constant reviews and feedback at the end of each negotiation to improve their contract negotiation skills. - Legal Knowledge: A high-performing contract management team doesn't have to be a team of lawyers, but it is important to build a team equipped with a strong foundation in legal knowledge. Understanding industry-specific legal contract requirements ensures legally sound contracts that are compliant and safeguard the organization's interests.
To avoid any ambiguities, teams ensure they are well-versed in key contract clauses, for example, indemnity, dispute resolution, and termination clauses. They are adept at drafting and ensuring terms are defined clearly.
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Project Management: Project management is a top skill that high high-performing contract management team leverages to ensure contractual obligations are met. Keeping up with the contract timelines and keeping track of deliverables and milestones are important throughout the contract lifecycle.
The project managers set clear objectives, manage budgets, allocate resources, and use collaboration tools like Microsoft 365 and SharePoint to facilitate easier communication and collaboration among team members. They adopt agile methodologies to enhance the effectiveness of contract execution by including regular sprints and reviews that provide opportunities for changes and improvements.
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Communication: Effective communication (both written and verbal) is important throughout the contract lifecycle. High-performing contract teams excel at building strong relationships with stakeholders by mastering communication skills. Conveying the contract terms and expectations effectively ensures that all parties understand the terms and conditions.
When strong verbal communication improves negotiation, written communication skills help craft legally sound documents allowing smooth execution of contracts. Leveraging technology enables real-time communication. Contract management solutions built on Microsoft 365 facilitate them to edit contract documents collaboratively and do virtual meetups and instant messaging.
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Analytical Skills: Analytical skills play a major role in helping teams make informed decisions. Teams use data and analytics to drive continuous improvement, and the overall contract management process aligns with the organizational goals and delivers value. The analytical skills involve organizing and data collection, identifying trends, risk evaluation, and analyzing the effectiveness of contracts by leveraging data.
Investing in contract analytics enables teams to prioritize risks based on their severity, and efficiently review long and complex legal contracts. The teams can iteratively improve contract templates, terms, and processes and develop custom reports based on analytical data.
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Document Management: Document management skills are key to improving operational effectiveness. Effective contract document management involves managing, monitoring, and organizing contract documents. High-performing contract management teams focus on every aspect of a contract and carefully document every version of a contract, making sure the document's evolution is well documented. This enables team members and the stakeholders to understand the status and the specifics of the contract documents.
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Problem-Solving: A team that focuses on problem-solving skills is bound to succeed. Proactive problem-solving accounts for a win-win solution for all the parties involved in the contract. Identifying and examining problems at an early stage of the contract lifecycle, critical thinking, negotiating unforeseen roadblocks, mediation, and conflict resolution, all contribute to problem-solving skills.
In situations under pressure, high-performing teams excel at making swift decisions with confidence by evaluating the scenarios and looking at the data. To navigate the complex contractual landscapes requires creative problem solving and in the long run, it guarantees improved organizational outcomes.
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Financial Competency: A contract management team equipped with extensive financial knowledge supports the organization's objectives and plays an important role in maintaining financial stability. Understanding the financial perspective in a contract gives the team the ability to manage financial risks proactively. Adhering to financial laws and regulations makes the team aware of tax benefits, financial documentation, and any industry-specific laws.
Investing in team development
Investing in building a high-performing contract management team guarantees you long-term benefits. Here are some areas of development you should focus on in order to explore the potential of your contracts by providing them with the right tools and resources.
First things first. Training sessions that cover the fundamentals of contract management would be a good start. This ensures every member of the team has a strong understanding of critical clauses and is aware of the contract management processes. Providing industry-specific training and mastering the best practices produces a team that is confident in creating clear and compliant contract agreements.
Instilling a culture of learning improves the efficiency of your contract management team. As the laws and regulations keep changing, staying updated on the latest advancements and trends in contract management is made possible by encouraging the team to attend regular webinar sessions and conferences.
Promote internal knowledge-sharing sessions and workshops to facilitate a learning culture where the team members exchange their ideas, knowledge, and experience.
Equip your team with contract management tools
The role of technology is indispensable in modern-day contract management. Putting together a highly competent and knowledgeable team with the right tools transforms your contract management process.
Contract management tools improve the productivity of contracting teams with pre-approved clause libraries and standardized templates. This reduces the time spent on drafting and reviewing the contracts. The centralized dashboards give visibility into all the contract portfolios and insights into key metrics such as contract renewals, negotiations, and more.
The version control feature tracks the changes in the document ensuring all the members of the team are using the latest version and thereby it encourages teamwork. With all your contracts in a single location, both internal and external stakeholders can share suggestions, ask questions, and review comments and as a team, it helps improve your existing practices.
The final part and the most important one is to review the performance of your team on a regular basis. To do this, set up key performance indicators (KPIs) to measure the impact of the processes and track the results. Dock 365, an easy-to-use, centralized contract management software built on Microsoft 365 uses data to empower high-performing teams.
Conclusion
The modern-day contracts have become more complicated and are evolving as the business landscape evolves. Building a high-performing contract management team does not happen overnight but setting it up the right way will prove to be a strategic asset to your organization.
Build a team with different areas of expertise in legal, financial, communication, negotiation, and collaboration skills and empower them with the right tools. High-performing contract management teams use advanced digital solutions such as Dock 365. Get a Free demo today to learn how Dock 365 empowers high-performing teams.
