Most buildings need to hire several suppliers: maintenance technicians, cleaners, security guards, electricians, HVAC companies… and dozens of other services needed in the day-to-day running of the company. Therefore, managing and monitoring all these contracts is essential to control costs and avoid breakdowns. So, how does contract lifecycle management work?
Contract lifecycle management is also known by the acronym CLM. CLM concerns the council of building contracts from the time they are signed until they expire.
Efficient and proactive management of all contracts can result in savings for the building as well as greater efficiency. It also helps ensure compliance and exposes the building to less risk.
CLM is considered to have five different phases, which are repeated over and over again:
Just like monitoring the performance of technicians, monitoring the performance of suppliers is much more than “controlling” or “mistrusting” someone. It is absolutely indispensable to:
Monitoring performance allows you to identify opportunities and processes that could be more efficient. Thus, you minimise waste, avoid disputes, and better control your investments.
Furthermore, by managing the contract over time, you can better assess the quality of services. In turn, this allows you to compare quality and costs – to determine the relative value of the services.
If one of the contracts is not meeting targets, you can terminate it and look for a new provider. Comparing all the options and renegotiating your contracts helps you control your maintenance costs.
There are several good practices you should follow when working with your supplier. We highlight four to make it easier to communicate, negotiate, and manage the contract on a daily basis:
Be transparent about the objectives of the contract. Effective communication is essential to ensure a good negotiation and, later on, good contract management. By the way, check here our guide to communication.
It is always a good practice to define goals and accountability. Therefore, establish an SLA from the start, in order to align expectations and define performance indicators.
Your suppliers take risks for you. Hence, do a risk analysis so that everyone you hire and subcontract is prepared and avoids unnecessary risks.
Most maintenance contracts are agreements that include a certain number of hours or a list of pre-stipulated tasks. Use digital signatures to save time when the unexpected happens.
Good contract management increases your agility, your ability to manage daily operations, and reduces your maintenance costs.