Contract management or contract administration is the management of contracts made with customers, vendors, partners, or employees. Contract management includes negotiating the terms and conditions in contracts and ensuring compliance with the terms and conditions, as well as documenting and agreeing on any changes or amendments that may arise during its implementation or execution. It can be summarized as the process of systematically and efficiently managing contract creation, execution, and analysis for the purpose of maximizing financial and operational performance and minimizing risk.
Effective contract management is essential to any business, and as more companies start to understand the value of process automation, contract management solutions are becoming more sought after than ever before.
Contracts (contract agreements) are the formal, finalized agreements between businesses, necessary for legal protection between parties. They are used to dictate the respective roles between a company and its vendors, partners, customers, and employees. Managing contracts, then, involves the process of overseeing the creation, signature, storage, execution, and review of contracts. This process poses a growing challenge as a company matures through the business cycle from start-up to enterprise.