How do you identify and manage contract opportunities and challenges in a dynamic environment?

1 Why CPM matters

CPM is not just a compliance or administrative task, but a strategic and proactive approach to managing contracts and relationships with customers, suppliers, and partners. It can help to enhance customer satisfaction and loyalty, increase revenue and profitability, reduce costs and risks, improve collaboration and communication, and foster innovation and learning. CPM can do this by optimizing contract terms, incentives, and penalties, avoiding disputes and litigation, minimizing contract variations, delays, and errors, ensuring compliance with contractual obligations and regulations, establishing clear roles, responsibilities, and expectations, and sharing relevant information and feedback. Additionally, CPM can identify best practices, lessons learned, and opportunities for improvement and growth.

2 How to implement CPM

CPM is not a one-size-fits-all solution and requires a tailored and flexible approach that suits your contract type, scope, complexity, and objectives. However, there are some common steps and elements that you can follow to implement CPM effectively. These include defining contract performance objectives and indicators that are aligned with your business goals and customer needs, establishing a contract performance baseline and targets, monitoring and measuring contract performance regularly, evaluating and reporting contract performance periodically, and managing and improving contract performance continuously. This involves collecting and analyzing data and information on contract performance indicators, assessing and communicating results, achievements, and challenges, and identifying and addressing any gaps, issues, or risks that affect contract performance.

3 What to consider for CPM

CPM is not a static or isolated process, but rather a dynamic and integrated one that involves various factors and stakeholders. To ensure success, you should consider the contract lifecycle, from planning and negotiation to execution and closure, and ensure it is aligned and coordinated with your contract management process and tools. Additionally, a clear and effective contract governance structure and framework should be in place, defining the roles, responsibilities, and authorities of the contract parties and managers, as well as the rules, policies, and procedures for contract decision making and escalation. Furthermore, a positive and collaborative contract culture should be embedded, fostering trust, transparency, and mutual respect between the contract parties and managers, and encouraging feedback, learning, and improvement. Lastly, CPM should be responsive and adaptable to the contract environment, which includes the internal and external factors and conditions that affect the contract performance.

4 How to overcome CPM challenges

CPM is not a simple or easy process and can present various challenges and difficulties for contract managers and parties. These include a lack of clarity or alignment on contract performance objectives and indicators, a lack of data or information on contract performance, a lack of resources or capabilities to monitor and evaluate contract performance, a lack of commitment or engagement from contract parties or managers, and a lack of trust or cooperation from contract parties or managers. To overcome these challenges, it is best to involve and consult contract parties and managers in defining and agreeing on contract performance objectives, indicators, baseline, and targets. Additionally, reliable and relevant sources and methods should be used to collect and analyze contract performance data and information, and sufficient and appropriate resources and capabilities should be allocated to monitor and evaluate contract performance. Furthermore, contract parties and managers should be communicated with and engaged regularly and effectively, and trust and cooperation should be built and maintained with them.

5 How to learn more about CPM

CPM is an invaluable and indispensable skill for contract managers and professionals. To learn more about CPM, you can read books, articles, and blogs on CPM and related topics, such as contract management, contract negotiation, contract administration, and contract risk management. You can also take courses, workshops, or webinars on CPM and related topics, offered by accredited providers, such as universities, professional associations, or industry experts. Additionally, you can join networks, communities, or forums on CPM and related topics, where you can exchange ideas, experiences, and insights with other contract managers and professionals, and seek advice or support. Finally, you can seek mentoring, coaching, or guidance from experienced and qualified contract managers or experts, who can share their knowledge, skills, and best practices on CPM and related topics.