What are the most common contract management challenges for FM, and how can technology help overcome them?

1 Compliance issues

One of the main challenges for FM is to ensure that the contracts comply with the relevant laws, regulations, standards, and policies. This can be difficult, especially when dealing with multiple contracts across different locations, sectors, and jurisdictions. Non-compliance can result in legal penalties, reputational damage, and loss of trust. Technology can help FM to achieve compliance by automating the contract creation, review, and approval processes, using templates, clauses, and workflows that adhere to the best practices and requirements. Technology can also help FM to monitor the contract performance, track the deliverables, and alert the parties of any deviations or violations.

2 Performance issues

Another challenge for FM is to optimize the performance of the contracts, by ensuring that the service providers, suppliers, and contractors deliver the expected quality, quantity, and timeliness of the services and goods. This can be challenging, especially when dealing with complex, long-term, and dynamic contracts that require frequent adjustments and modifications. Poor performance can result in dissatisfaction, disputes, and inefficiencies. Technology can help FM to improve the performance of the contracts by enabling real-time communication, collaboration, and feedback among the parties, using tools such as chatbots, portals, and dashboards. Technology can also help FM to measure and evaluate the performance of the contracts, using key performance indicators (KPIs), metrics, and reports.

3 Risk issues

A third challenge for FM is to manage the risks associated with the contracts, such as financial, operational, legal, and reputational risks. These risks can arise from various factors, such as market changes, contractual disputes, unforeseen events, and human errors. These risks can have negative impacts on the FM objectives, such as revenue, cost, quality, and safety. Technology can help FM to mitigate the risks of the contracts by providing visibility, transparency, and traceability of the contract data, using tools such as cloud storage, blockchain, and digital signatures. Technology can also help FM to identify and prevent the risks of the contracts, using tools such as analytics, artificial intelligence (AI), and machine learning (ML).

4 Cost issues

A fourth challenge for FM is to reduce the costs associated with the contracts, such as procurement, administration, and maintenance costs. These costs can be high, especially when dealing with large, diverse, and frequent contracts that require extensive resources and coordination. High costs can erode the FM profitability, competitiveness, and value. Technology can help FM to lower the costs of the contracts by streamlining and automating the contract processes, using tools such as electronic procurement (e-procurement), contract lifecycle management (CLM), and robotic process automation (RPA). Technology can also help FM to optimize the costs of the contracts, using tools such as benchmarking, negotiation, and optimization.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?