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Similar to Tips to Simplify Contracting Process By SN Panigrahi
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Tips to Simplify Contracting Process By SN Panigrahi
- 2. 2 SN Panigrahi is a Versatile Practitioner, Strategist, Energetic Coach, Learning Enabler & Public Speaker. He is an International-Corporate Trainer, Mentor & Author He has diverse experience and expertise in Project Management, Contract Management, Supply Chain Management, Procurement, Strategic Sourcing, Global Sourcing, Logistics, Exports & Imports, Indirect Taxes – GST etc. He had done more than 150 Workshops on above Published more than 500 Articles; More than 60 Youtube Presentations He is an Engineer + MBA +PGD ISO 9000 / TQM with around 29 Yrs of Experience He is a certified PMP® from PMI (USA) and become PMI India Champion Also a Certified Lean Six Sigma Green Belt from Exemplar Global Trained in COD for 31/2 Yrs. on Strategy & Leadership GST Certified – MSME – Tech. Dev. Centre (Govt of India) ZED Consultant – Certified by QCI – MSME (Govt of India) Member Board of Studies, IIMM Co-Chairman, Indirect Tax Committee, FTAPCCI Empanelled Faculty in NI MSME He has shared his domain expertise in various forums as a speaker & presented a number of papers in various national and international public forums and received a number of awards for his writings and contribution to business thoughts. SN Panigrahi 9652571117 snpanigrahi1963@gmail.com Hyderabad
- 3. 3 Keep Contract Language Clear and Concise Contracts today are pervasive in the Business World and inevitable in any Business. Good Contract Management greatly improves the company's competitiveness and also Reduces Risks. An effective contractual system gives greater security to both the company as a whole and those responsible for these documents. Contracts may formalize important agreements and impose significant responsibilities, but that does not mean that they have to be lengthy documents written in a complicated language. In fact, Contract Process should take the opposite approach and focus on keeping things as simple as possible.
- 4. 4 Contract-related disputes that often arise end up in court because of differing interpretations and understandings. Although language, in general, s subject to interpretation (including contract terms), there are ways to avoid unnecessary ambiguities. Here are a few ways to keep contracts simple: Keep Contract Language Clear and Concise Make it both clear and concise, and avoid using vague parameters like “as reasonable” or “when feasible” is setting the contract up for disaster. Short Sentences, Plain English Contracts don’t have to be written in legalese. Short, plain statements of the parties’ intent will do nicely. If a sentence starts running long, break it up. Struck a Precise balance when drafting contractual agreements by not missing Essential Clauses & Conditions and Not Incorporating Many Clauses which are irrelevant. Contract Clarity, Structure
- 5. 5 Indexing Create a Table of Contents to Expedite Referencing In some cases, when you do not know the exact words you are seeking in a contract and thus cannot simply conduct a quick search on the electronic version, it can be beyond aggravating having to sift through page after page of a voluminous document trying to find a clause or term. A good contract has Numbered and / or Lettered headings and subheadings that clearly explain the content contained within that particular section, allowing viewers to quickly scan and locate the part they want.
- 6. 6 Include Tables, Charts, or Other Data-Descriptive Visual Aids as Appropriate Charts and Tables Instead of long, complex narrative language, use charts and tables. Visual elements such as graphs, charts, tables, photographs, diagrams, and maps capture your readers’ attention and help them to understand clearly. These visuals help to augment your written ideas and simplify complicated textual descriptions. They can help the reader understand a complicated process or visualize trends in the data. The key concept to remember here is that visuals clarify, illustrate, and augment your written text; they are not a replacement for written text all together. If you have visual elements in your document, they must be based on and supplement your written content. Explanatory Footnotes also clarify or highlight certain aspects of the study which are somehow related to it but could be written separately from the main text
- 7. 7 Charts and Tables Instead of long, complex narrative language, use charts and tables. Here’s an example of the former: If it delivered within 10 Days, then Party A will pay $3.00 per Piece, provided that, if it delivered after 10 days, then Party A will pay $2.00 per Piece subject to such delivery not exceeding 20 days and the party A has the right to reject if the Delivery is after 20 days [etc., etc.] Here’s the same provision, in table form : Delivery Conditions Payment by Part A Within 10 Days $3.00 per Piece Delivery between 11 to 20 Days $2.00 per Piece Delivery after 20 Days Right to Reject by Party A
- 9. 9 Categorise the Contracts Based on Type of Contracts (Goods Procurement, Service Contracts, Consultancy Contracts, Domestic / International Contracts etc) and Authorization Values (With threshold limits : Upto 10,000 - Small value, Above 10,000 to 1,00,000 - High Value, Above 1,00,000 Very High Value etc) Standardize Document Layouts & Templates based on Categorization Standardised contracts and documents could save a lot of time and energy allowing the organisation to function more efficiently and focused on its core business. Pre-approved language, clauses, terms, and conditions, speeds up contract processes and cuts down on the administrative work required by Contracting / Legal Department. When industry-standard terms are used, there is less room for interpretation, minimizing risk for the company. Specifications consisting of the written requirements for materials, equipment, systems, standards and workmanship for the Work, and performance of related services. Item Coding's are used to Assign Unique Codes for Standardizing Specifications for Easy Identification & Tracking Categorise the Contracts Standardize Formats Based on Categorization Standardize Clauses Standardize Specifications / Item Codifications
- 10. 10 Creation of Clause and Template Libraries Consisting of Standard Formats, Language, Alternatives and Guidance. Delegation Creates Accountability & Responsibility - Enhances Productivity Delegate Authority with Controls : Levels of Authority with Flexible Review and Approval – Simplify Approval Procedure – Routing for Approval & Signing / Releasing For High Value / Critical Items Establish Cross Functional Member Committees with Necessary Controls & Monetary Thresholds Contract management is a team sport. Over the life of a contract, many people and departments get involved with a contract: legal, procurement, contract management, and business units. It would not be possible for different people on the contract management to handle Contracts without some sort of collaboration. Collaboration Provides Clarity and Ease out Differences. Frequent Review & Progress Meetings with User Departments to understand Requirements & Prioritizing Creation of Clause & Template Libraries Delegate Authority with Controls Committee Based Contract Finalization Team Collaboration
- 11. 11 Frequent Review & Progress Meetings with User Departments to understand Requirements & Prioritizing Rate Contract is a contract for the supply of stores at specified rates during the period (Generally up to one Year) covered by the contract. No quantities are ordinarily mentioned in the rate contract and the contractor is bound to execute any order which may be placed upon him during the currency of the contract at the rates specified therein. Automated Contract Management Systems can help for better contract administration and Reduce the Costs and Time that you spend; Increase Accessibility; Better Security; Stronger Compliance; Better Reporting System - Improves Contract Documents Traceability & Visibility A reverse auction is a type of auction in which each bid is kept confidential and Creates a Virtual Competition among Bidders on a Common E-Platform and one clear winner is defined after the auction finishes. Team Collaboration Rate Contracts / Long Term Agreements Automate Contracting System E-Procuring & Reverse Auction
- 12. 12 Renew Contracts on Similar Terms if Market Conditions are not Changed, Specially for Service Contracts and Item Rate Contracts Contract Compliance Processes exist to make sure both parties get what they expect out of a deal and follow all Statutory & Legal Compliances & Responsibilities. Also there is need to Reporting, Monitoring, Control Budget and Evaluating Contract Performance with Centralized Contract Data Collection & Audits By implementing a process improvement program, contracts organizations can re-evaluate their processes and ensure Improvement. In this way, the contracting organization can position itself to perform efficiently and effectively to satisfy the needs and objectives of its customers. Contract Renewal Compliance Monitoring & Audit Continuous Process Improvements
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