The main types of risks in the performance of contracts such as internal, market, economic, legal, ethical sourcing and performance based risks

Evaluate the potential risks that goods and services may be subjected to, and liaise with suppliers and stakeholders to create and implement plans to mitigate the adverse effects of these risks

The responsibilities for contract management

Allocate clear responsibilities with stakeholders for the roles of contract management of delivered goods and services

Demand management for contracts

Forecast and plan requirements with internal stakeholders and suppliers to ensure the supply of goods and services matches demand taking into account actual demand

The use of contractual terms, specifications, KPIs, reporting, governance, escalation and benchmarking in contract management

Monitor the supply of goods and services to ensure that required performance standards and KPIs are achieved, and identify where changes in the contract or other changes are required, taking actions to implement them

Payment responsibilities in contract management

Certify costs of and monitor compliance with, taking remedial actions where necessary, any variations from contracted payment terms for procured and delivered goods and services, managing any contracted risk and reward mechanisms

Creating targets for assessing the performance of suppliers based on SMART (specific, measurable, achievable, relevant and timely) targets

Formulate SMART targets for supplier performance and agree their application with suppliers and other stakeholders

Supplier relationship management and the use of improvement plans

Ensure that supplier relationship management processes and improvement plans are proactively executed to correct defective performance of delivered goods or services

Transition and exit arrangements for contracts

Ensure security of supply is managed in any transition period or during exit of contracts with suppliers

The importance of reviews at the end of contracts and the opportunities for organisational learning from the review

Conduct activities to close out contracts and evaluate learning from experience

The use of budgets in contract management

Ensure budgets are monitored, instigate actions for deviations from planned budgeted costs and assess the impact on cash management