Koen Vercauteren, Product Management Leader at Birdseye
The advantages of the CATS CM methodology are clear: grip on contracts and clear processes provide a solid foundation for professional contract management. Yet in practice, organizations face obstacles that ultimately cause them to get into problems when managing their contracts.
In this blog, we list the four most common obstacles that can stand in the way of success when using the CATS CM methodology.
CATS CM as a method works excellently, but as soon as the number of contracts increases significantly (or quickly), many organizations get into problems. Although the processes are well defined and documented, due to the rapid growth there is a lack of overview and time to properly update all substantive contract information. Who does what, when, under which contract? How urgent is it? What exactly is in the contracts?
In practice, even if you use a good methodology, it turns out it is difficult to work consistently at scale. It is especially important when rapid growth occurs to structure the contract information according to the CATS CM principles, and make relevant actions, deadlines and tasks immediately visible to all involved. Only then will contract management remain manageable, even as the volume grows.
In many sectors, multiple changes can occur at a high frequency: price adjustments, new supplier terms and conditions or changing laws and regulations, for example. If contracts cannot be adjusted quickly enough, risks arise: content that is no longer correct, and stipulations that cannot be complied with.
Adjusting and implementing proper contract changes is often a slow and error-prone process. Especially because adjustments are usually carried out ad hoc and manually. As a result, changes are not implemented in a structured and controlled manner, often without version management, impact analysis and automatic communication with stakeholders.
Contract management can remain an abstract matter for people whose involvement with contract tasks is more incidental. If employees do not have a clear view of the impact of their contract tasks, their motivation to take them seriously and execute them carefully decreases.
This is usually because there has been no shift from abstract responsibilities to concrete, feasible tasks. There are no clear dashboards to provide insight, and necessary notifications are not received. In short, there is no clear division of tasks, and employees do not understand what needs to be done, why it needs to be done, and what the effect of good contract management is.
Critical knowledge is often in minds rather than in systems. And that becomes a problem at moments of personnel changes. The structure of CATS CM helps to clearly define roles and tasks, but if that information is not captured and shared properly, handover problems arise.
If knowledge is not embedded and is not available to new employees, this can lead to major problems. New employees cannot get on board quickly and do not know exactly what is expected of them. Continuity of contract management is not guaranteed.
The four obstacles we've outlined, loss of control at scale, managing rapid contract changes, lack of insight, and knowledge gaps, are exactly the challenges that intelligent tooling can address. But the tooling needs to be closely aligned with the CATS CM methodology to effectively get the most out of contracts.
CATS CM provides the methodological framework with its four pillars: the ten essentials and structured processes from our first blog, and the clear role definitions and focus on work-to-be-done that we covered in our second blog. To successfully bridge the gap between methodology and daily practice, organizations need a purpose-built technological foundation.
Such purpose-built contract management software transforms the CATS CM framework from theory into seamless operation. It maintains oversight when contract volumes grow, manages changes systematically, provides the dashboards and notifications that give employees clear insight into their tasks, and preserves institutional knowledge beyond individual personnel changes.
Success also demands commitment from management and leadership to create organizational conditions where CATS CM can flourish. The system must be scalable, transparent, and workable for everyone involved, from contract managers to C-suite executives.
Only then will organizations achieve the control, speed and continuity in contract management that turns contracts from administrative burden into strategic advantage.
Do you want to avoid the four common contract management pitfalls in your organization? Download Birdseye and Contract Management with CATS CM and discover how intelligent software gives your contract management a huge boost.
