Strengthening contract management from various roles

In the world of collaboration, contract management is an essential link in delivering quality services and products. It goes beyond just putting agreements on paper; it's about keeping those agreements alive through measurability and proactive communication. And as more and more items are purchased Off the Shelf, this field is becoming increasingly important. In this blog, we explore the vital roles of Procurement, Contract Manager, and Service Manager within this process and emphasize the importance of working together to maintain control and have the right conversations.

Crucial Role of Procurement

The procurement department sets the tone for successful contract management. It does so by focusing not only on price but also on the quality and continuity of service delivery. This begins with jointly translating the mission, vision, and strategy into frameworks and measurable objectives that serve as the basis for the contract. These objectives must be realistic, achievable, widely supported, and above all, measurable, so that all parties know what is expected and how performance will be assessed. There must also be consideration of when it might no longer be suitable. For example, the bonus-malus can be replaced by terminating factors and conditions. There can be a contractual obligation to cooperate, for instance, in a multi-party construction in case of scarcity. Establishing a transition situation, such as a detailed transfer document and transition plan, is also a method to make continuity not entirely dependent on one (European Tendered) party. This type of cleverness also comes from operational experiences, where you actually see the contract in action and can identify bottlenecks and wastage.

The Role of the Contract Manager

Contract managers ensure compliance with the contract and ensure that both parties know and respect their obligations. Their role includes monitoring the contractual agreements and facilitating communication between the involved parties. Regular evaluations and reports are essential to ensure that performance meets expectations and to make timely adjustments where necessary.

The Service Manager

The service manager plays a key role in measuring and interpreting operational performance. As the 'ears and eyes' on the ground, they monitor the actual service delivery and are often the first point of contact for operational challenges. The measurability of the agreements enables them not only to ensure compliance with the contract but also to proactively address problems and propose improvements. Their insights are crucial for conducting constructive conversations with suppliers, timely adjustments of the service, and to safeguard learnings from practice in new collaborations and tenders.

The Difference Between a Contract Manager and a Service Manager

The difference between these roles primarily lies in the focus and responsibilities of their roles within an organization. Essentially, a contract manager focuses more on the legal and commercial aspects of contracts with third parties, while a service (level) manager focuses on the operational quality and consistency of service delivery within the organization. Both roles require strong communication skills and the ability to effectively negotiate and manage relationships. Therefore, a combination of these roles is conceivable, with a potential preference for service management profile, especially when the focus of collaboration is on service delivery and execution: output.

Difference with Account Manager

It's important to clarify the distinction between a service manager and an account manager. While the service manager focuses on the operational aspects of service delivery, the account manager focuses more on the relationship with the customer, commercial opportunities, and overall customer satisfaction. The account manager is often more involved in strategic discussions, while the service manager focuses on daily execution and ensuring operational integrity and continuity.

Measurable Agreements

To effectively set up measurable agreements, a profile with strong analytical skills, experience with improvement management, and a thorough understanding of business processes and services is needed. This person must be able to understand both the needs of the organization and the functional specifications and translate them into clear, measurable objectives within contracts or SLAs. Ideally, this person also has experience in relationship management and the ability to think and work at both strategic and operational levels. This ensures that the agreements made are realistic, achievable, and aligned with organizational objectives.

Conclusion

Effective contract management is active contract management and requires interplay between measurable agreements and the proactive roles of procurement, contract management, account management, and service management. By focusing on the measurability and performance of operational execution, we ensure that contracts exist not just on paper but also serve their purpose in practice. This ensures better control, timely interventions, and stronger, more cohesive service delivery.

Looking at the roles, consisting of tasks and responsibilities, choices can be made. Actually, if you don't want too much diversification of roles, you can look for someone who can manage both the relational and operational aspects well. The profile of a service manager may just contain the right mix of being fact-driven in compliance with the agreements and managing the relationship at an operational and tactical level.