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How can failed contracts be avoided? Active Contract Management is the answer

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Industry studies indicate that as much as 9% of the bottom line is lost due to poorly written or executed contracts. How can failed contracts be avoided?  Through active management of the contract.  Here are some steps...


Scenario:  The sales team spends months winning over the client and then it takes another two months to close the contract.  Within twelve months the client is dissatisfied and lodges a formal contract dispute. 

This scenario is not uncommon. Industry studies indicate that as much as 9% of the bottom line is lost due to poorly written or executed contracts. A tremendous amount of energy is front-end loaded, and then the negotiation team disbands and hands over the contractual commitments to the implementers (who may not have been involved with the negotiation). 

How can failed contracts be avoided?  Through active management of the contract.  Here are some steps which can be taken to minimize risk and optimize profitability:

  • Documentation of contract risks and obligations
  • Assignment and tracking of obligations to identify risk
  • Creation of a contract scorecard which identifies areas of business and legal risk
  • Collaboration between client/supplier facing stakeholders with the contract management team.  The contract will require interpretation, regular status updates and changes over its life.

Infosys' LPO team can assist our clients with all phases of the contract life cycle-from contract drafting, playbooks (pre-approved by legal), summarization (abstraction), data base management, risk analysis/reporting, obligation tracking, and more.

Today's market is more competitive than ever and resources are limited.  Our clients can realize tremendous value by partnering with us to administer the contract over its life.

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