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Thursday, 15 November 2007

The contract management – what is this?

The contract management – what is this

Some people say that the newest technologies are the most important for economics growth. I am agreeing with that but some of these folks missed the very important thing and this is a relationship between market players. These days when the market is a full and glutted with many firms, we may choose the right one which covers our requirements. But if we are a big firm and our executor is a small firm we sometimes receive a good service/stuffs, but it is putted in badly prepared contracts and unkempt support. What I mean.

Sometimes we conclude contract for supply of something and the small firm deliver to us this things. But after few mounts we understand that the firm is stopped support in spite of contract requirements. Yes, they always said “We late for a few weeks but we will complete all jobs on time”. Of course they can’t do that.

Considering a question we must see and the big firms. Sometimes they are monopolistic structures and making negotiation with them is a little bit impossible. As example – you should imagine a huge factory with a large production capacity and in the background stays many little firms which support the giant. Many of these firms have contracts with the factory and many of them are not “happy” from these contracts. Way? The answer is simple – they obey the giant, because without work these firms will be cast out.

Yes of course in the world most contracts may be were concluded between firms in the same rank i.e. with the same productivity or turnover. In this case the firms work in quite good environment because they both believe each other and some problems with payments in not a proper time or bad finished work have not spoil the contract. Of course this is not an ideal case – many firms just not finished their work and become to spoil the contract.

There is one solitary instance – when the contract is between one company and the Government. In this case the executor (in this case the company) always trying to avoid contract spoil. I think you know why – in my country the corrupt practices is a basic craft of the administration. If you as a company give bribes to some high-standing civil servant, you always will be overloaded with jobs.

All that I said is leading me to the next stage of this little article. To make our business profit and working comfortable in every stress environment we should prepare a solid contract (except in the case with government). The solid contract means that agreement which satisfy both of the sides. Yes this is the essence of contract management – the solid contracts and their executing. For these two things work many contract managers over the world.

Thanks for the patience. Next article will be “Head of the contract – or what kind of things we must put in it.”