How Contract Management is Used in Project Management

The roles of contract managers and project managers tend to overlap. Nevertheless, contract management and project management are two separate disciplines. In smaller teams, there tends not to be separate contract managers and project managers as it would cost too much. However, in more complex projects, it is necessary to have distinct roles where each individual has specific experience in their field of expertise. Despite the separate nature of the roles, both are considered equally important in the success of a project.

The Role of a Project Manager

The project manager is responsible for managing the entire project from beginning to end, keeping an eye on the progress of the project and playing an essential role at each stage of the project, making sure it is a success.

Project managers have a long list of responsibilities, and so make use of different types of technology to become more efficient in their role. This can include tools like customer relationship management (CRM) or virtual data rooms to share and store data used in the project.

Although project managers are involved in the contracting process on larger projects, this isn’t their primary responsibility. It is the role of the contract manager to manage this sub-process. Therefore, contract management can be considered a sub-discipline of project management, albeit, a more specific one, unlike the varied nature of the role of the project manager.

How Contract Management Fits Into the Wider Project Management Process

Because companies enter into new contracts regularly with other third parties, this needs to be tightly controlled. After all, poor negotiation, contract loopholes and poor knowledge can result in serious problems further down the line and result in costly arguments between both parties.

Therefore, contract managers need to make sure partners are thoroughly checked. Once they are convinced a contractor is reputable, they then put together a contract, based on agreed terms between both parties. This makes sure that any risk is minimised.

Just like project managers make use of various software to do their job effectively, this is also the case for contract managers. After all, contract management is arguably as complicated as project management and shares much of the time constraints that project managers suffer.

Reasons Contract Managers Use Contract Management Software

One critical tool for contract managers is an online contract database which is essentially a central repository where all contract-related information is contained. It makes working with internal team members much more comfortable, as well as the communication that happens with external parties as well.