Plenty has been written about entering into a contract the right way, but far less attention gets paid to what happens after the ink is dry — managing the contract and the relationship with the provider once it’s in place. Too often, once signed, an agreement gets filed away and forgotten, only surfacing again once something has already gone wrong.
Reallocating time and resources to manage a contract properly takes effort, but set against the cost of a poorly managed one, it is effort well spent. My own view, built on years of managing large contract relationships, is that a contract should be treated as a living thing — an ongoing guide that reminds every party of the obligations, deliverables, and responsibilities they signed up to, and one that can adapt to changing circumstances, provided that change is managed carefully and under agreed guidelines.
So how do you prepare properly for good contract management, and what should you keep on top of once a large, live contract is running? Here are ten hints and tips to help.
1. Give contract management the priority it deserves
Don’t treat contract management as an afterthought bolted on once the ink is dry. Build it into your strategy from the start of procurement, and make sure properly funded resources are secured early — a strong client-side contract management function typically costs 5-8% of total contract spend. Plan in detail for continuity, with a handover strategy ready in case a key individual leaves, supported by a solid knowledge base covering the contract’s development from drafting through signing and beyond. That commitment needs to be sustained for the entire life of the contract.
2. Develop a robust document storage and sharing facility
From the start of procurement, set up a shared facility for document storage, and pay close attention to document identification and versioning. By the time of signature, you’ll need a definitive library of master documents — requirements documentation, the winning tender with all supporting clarifications, the contract and its attachments, evaluation records, plans, logs, minutes, and other material communications. Keep sensitive internal documents private while still sharing what’s relevant with the provider. This paper trail can prove vital if a dispute ever arises over who said what and when.
3. Design key post-contract information flows
Build in obligations during procurement that give you the visibility, accuracy, and granularity you’ll need to manage the contract effectively. Open-book accounting, for instance, is a common obligation in larger contracts, but the data provided can end up opaque, with the provider’s actual costs and margins hard to pin down. Avoid this by setting out clear heads of expense the provider must produce, including any hidden overheads or intra-provider cross-charges, and build in the right to audit open-book information at reasonable intervals.
4. Give careful consideration to invoice design
Accuracy matters just as much as visibility. Poorly designed invoices that allow — or simply don’t prevent — ambiguous entries can waste thousands of hours of client-side admin time over the life of a large, long-running contract. A little upfront thought about how invoices should be structured to reflect known or expected cost factors can make a real difference down the line.
5. Ensure appropriate management provisions are included in the contract
The provisions, processes, and tools needed to manage the contract must be embedded for its full duration, and the level of contract management should be proportionate to the scope and complexity of what’s being delivered — an outsourced ICT contract, for example, warrants far more attention than a commodity supplies contract. These provisions can range from routine delivery meetings to value testing and special arrangements for underperformance or disputes. Model contracts can help, but have your legal and procurement advisors confirm that adequate tools exist to monitor normal operation as well as situations where things go off track.
6. Produce a contract user’s guide for complex contracts
Where possible, get the legal team to draft a plain-language guide to the finalised contract, explaining how to navigate it and what mechanisms exist to support its ongoing management — particularly how any KPIs, SLAs, or service credit regimes actually work. Contracts can become extraordinarily complex documents, so a simplified version helps everyone understand their roles and responsibilities, supports easier handovers, and keeps things clear in every situation that might arise.
7. Create and maintain a timeline of decisions made on the project
In the run-up to contract signature, gather together everything relevant about governance structures, meeting attendees, and roles and responsibilities — and keep it updated as things change. Build a calendar for recurring activities: service and contract management meetings, progress or KPI reports, and information to be shared before or after meetings. This gives you a framework for planning and managing the contract on an ongoing basis. Don’t forget aperiodic activities either, such as contract breakpoints, open-book reviews, benchmarking, or market testing — these should be clearly documented in advance, since they may not be triggered until long after the people involved in the original procurement have moved on.
8. Identify and address issues early
This isn’t a call to become an obsessive, hawkish watcher of KPIs and statistics, waiting to pounce on the first out-of-tolerance event — that mindset can make the numbers matter more than whether the underlying cause was actually understood and resolved. But where a genuine issue or persistent problem does arise, confront it rather than deferring it and hoping it goes away. Problems, left alone, usually get harder to deal with over time — both in terms of delivery and the relationships around it.
9. Manage behaviours carefully and escalate issues under agreed guidelines
Some contracts run into trouble simply because of personality clashes. Good working relationships, trust, and mutual respect need constant attention; without them, behaviours stop being constructive and outcomes suffer. Deal with relationship issues when they appear, and make escalation easier by agreeing mechanisms upfront — for example, giving the client a route to require replacement of uncooperative or underperforming provider staff. At the same time, the client must resist the urge to ‘wade in’ and take over delivery, since that risks relieving the provider of its legal obligations under the contract. The goal is always delivery against the contractual obligations, through a professional, trustful, and mutually beneficial relationship.
10. Be consistent and correct in your approach
Know what the provider is obliged to deliver, and hold them to it. Allowing informal concessions here and there can become a bad habit — one that often turns into a one-way street, with favours rarely flowing back. If something material genuinely needs to be conceded or changed, put a formal record in place setting out the reasons and how long the arrangement will last before reverting to the previous position. And stay watchful around change control: scope-creep through change requests is common, and can be expensive, so check that each one is necessary, valid, and not simply an attempt to get something delivered that was already within the contract’s scope.
The Bottom Line
A contract shouldn’t be treated as something that only matters at the start of a project or when things go wrong. It should be monitored, updated, and maintained, and adapted to meet the changing needs of both parties and the circumstances around the project. Following these ten tips won’t guarantee success, and ignoring them won’t guarantee failure — but they will shift the odds firmly in your favour by keeping everyone pulling in the same direction.