Finding The Risk And Value Through Assessment

Linking to the opportunity assessment is a key part of the development of contract management, once the framework has been put in place. Finding success through this is all thanks to developing the plans and priorities you decide.

Responding to risk

Exploiting opportunities through keeping away for the risks is pretty much the reason why contract management took off across the globe. Basic contract management is about performance and administration, mid-level focuses on change, relationships and risk, while the top level is strategy and development.

There are four types of risks:

- Reduction - Here you can mitigate any possible likelihood or impact of business risk.

- Elimination - Clearing any likelihood of risk impact to nought.

- Acceptance - This is where risk is there but nothing is done against it - the reasons for this could be because there is nothing that can be done or the end product isn't going to affect the business too much.

- Transfer - Moving all risk to a third party or the supplier through insurance so that you don't own it.

You can get to grips with business change easier if you can identify the risk and understand where it lies. What's more is that you can stop this from happening, through the mitigation of this, and this can end in opportunities for the business.

Value opportunities

Responding to these is just as important as responding to any risk that the company may have. The incorporation of value needs to be looked at, and while the suitability doesn't come from every contract you will find it in more than a few.

Developing contract management

Everything needs developing over time, and within contract management this is no different. Reasons for the changes tend to be thanks to the complexity and nature of the contracts that are being looked at. Generally, there are three different ways to look at this:

- Simple services - If it just a service that has been agreed on then the contract is unlikely to change from the start to the finish.

- Complex services - When services aren't going to be delivered immediately, then there is likely to be a transition period which means that the contract will change between the transition and delivery phase. An example of this would be the hiring of a new catering service.

- Very complex - There are huge variations to many contracts and services, and when things like customer facing are involved you will see a continual development over a long period of time - from design to build to operation, there will be great changes in the contract.

----------------------------------------------------
Contract management systems vary from business to business, and getting the right one for you is imperative to your success. Take a look at a top vendor - http://www.ecteon.com/products-overview

EasyPublish this article: http://submityourarticle.com/articles/easypublish.php?art_id=247253