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Contract Performance
What Is It
The Contract Performance Enabler is a structured framework that ensures contractual obligations are actively monitored and managed to achieve successful contractual outcomes.
Contracts are often signed and forgotten, leading to non-compliance, missed entitlements, and inefficient contract execution. The Contract Performance Enabler mitigates these risks by embedding structured performance management into the contracting lifecycle.
Effective contract performance management involves tracking obligations, managing deadlines, ensuring compliance with contractual terms, and taking proactive corrective actions when necessary.
Contract success is not accidental but the result of intentional strategies that drive compliance, efficiency, and commercial success.
The Contract Performance Enabler includes proactive engagement with contractual stakeholders, ensuring that required actions—such as providing notices, enforcing rights, and conducting contract performance reviews—are completed in a timely manner.
Businesses that focus on contract performance management are significantly more likely to achieve the intended contractual benefits while avoiding costly disputes and disruptions.
A lack of structured contract performance management can lead to missed obligations, financial losses, increased disputes, reputational damage, and operational inefficiencies.
Scope
The Contract Performance Enabler framework includes the following key elements:
◼️ Obligation Tracking: Monitoring contractual obligations, ensuring they are met on time and as agreed.
◼️ Performance Metrics & KPIs: Establishing key success indicators to measure contract effectiveness.
◼️ Proactive Deadline Management: Ensuring awareness and timely action on key contract milestones.
◼️ Entitlement Management: Actively claiming contractual benefits and enforcing rights.
◼️ Compliance Monitoring: Ensuring adherence to legal, regulatory, and contractual requirements.
◼️ Contract Performance Reviews: Conducting regular assessments to evaluate contract success and areas for improvement.
◼️ Stakeholder Engagement: Aligning all relevant teams, including legal, procurement, finance, and operations, to ensure contract execution is optimized.
◼️ Issue Resolution Frameworks: Proactively addressing potential disputes before they escalate.
Resource Status
GLS legal ops, the Contract Performance Enabler is both a "Repeater" resource in contract management.
A Repeater Resource: Supports multiple legal and commercial functions by ensuring that contracts deliver the expected value across various business operations.
Best Practice Features
The best practice features of the Contract Performance Enabler include:
◼️ Clear Accountability Structures: Defining roles and responsibilities for contract management.
◼️ Obligation Visibility: Ensuring key stakeholders can track obligations in real-time.
◼️ Automated Reminders & Alerts: Setting up proactive notifications for key contractual deadlines.
◼️ Performance Dashboards: Providing real-time insights into contract execution.
◼️ Regular Performance Audits: Reviewing contracts periodically to ensure compliance.
◼️ Risk Identification & Mitigation: Proactively addressing risks before they escalate.
◼️ Escalation & Issue Resolution Mechanisms: Establishing clear pathways for handling performance-related disputes.
◼️ Technology Integration: Leveraging contract lifecycle management (CLM) tools to streamline monitoring and reporting.
◼️ Collaboration & Communication: Ensuring cross-functional engagement in contract execution.
Business Value
The Contract Performance Enabler delivers significant value to the business:
◼️ Increased Contract Success Rates: Enhances the likelihood of achieving intended contractual outcomes.
◼️ Reduced Financial & Legal Risk: Prevents costly disputes and compliance failures.
◼️ Improved Operational Efficiency: Ensures obligations are fulfilled on time, reducing inefficiencies.
◼️ Stronger Supplier & Partner Relationships: Enhances collaboration and contract performance.
◼️ Proactive Risk Management: Identifies and resolves performance risks early.
◼️ Optimized Resource Utilization: Ensures legal and commercial teams focus on high-value activities.
◼️ Improved Financial Outcomes: Ensures the business captures all contractual entitlements and prevents financial leakage.
◼️ Regulatory & Compliance Assurance: Ensures all contractual activities align with legal and industry standards.
◼️ Strategic Decision-Making: Provides data-driven insights into contract performance.
Legal Department Value
The Contract Performance Enabler enhances legal department operations by:
◼️ Reducing Contract-Related Disputes: Minimizing litigation risks by ensuring contract compliance.
◼️ Enhancing Risk Oversight: Proactively identifying legal and commercial risks.
◼️ Improving Legal Workflows: Streamlining contract review and enforcement processes.
◼️ Supporting Compliance Initiatives: Ensuring adherence to regulatory and contractual obligations.
◼️ Facilitating Efficient Resource Allocation: Allowing legal teams to focus on high-priority matters.
◼️ Strengthening Internal Client Support: Providing business units with proactive contract management tools.
◼️ Enabling Faster Response Times: Improving legal response times to contract-related issues.
◼️ Supporting Automation & AI Implementation: Enhancing contract monitoring with technology-driven solutions.
◼️ Ensuring Institutional Knowledge Retention: Preventing contract mismanagement due to staff turnover.
Who Needs It
The Contract Performance Enabler is essential for:
◼️ Legal Teams: Ensuring contracts are executed and enforced as intended.
◼️ Procurement & Sourcing Teams: Managing supplier performance and contractual obligations.
◼️ Sales & Commercial Teams: Monitoring customer contract performance.
◼️ Finance & Risk Officers: Ensuring contractual financial commitments are met.
◼️ Contract Managers: Overseeing the full contract lifecycle.
◼️ Operations Teams: Ensuring business functions align with contractual requirements.
◼️ Compliance Officers: Monitoring adherence to legal and regulatory standards.
◼️ Senior Executives: Ensuring contract strategies align with business objectives.
◼️ External Legal Counsel: Supporting contract enforcement and dispute resolution.
◼️ Legal Operations Teams: Leveraging technology to streamline contract performance management.
Productivity Consequences
A business that does not implement a structured Contract Performance Enabler will face:
◼️ Missed Obligations: Failure to track and fulfill contractual commitments.
◼️ Increased Disputes: Poor contract management leads to costly disagreements.
◼️ Financial Losses: Missed entitlements and unclaimed benefits impact profitability.
◼️ Compliance Risks: Contracts may not adhere to legal and regulatory requirements.
◼️ Operational Inefficiencies: Lack of contract oversight results in delays and redundancies.
◼️ Higher Contract Failure Rates: Increased risk of contracts failing to deliver intended outcomes.
◼️ Resource Drain: Legal teams spend excessive time resolving preventable contract issues.
◼️ Limited Visibility & Reporting: Inability to assess contract performance effectively.
◼️ Weaker Business Relationships: Unstructured contract execution damages commercial partnerships.
◼️ Reduced Strategic Agility: Inability to optimize contracts in response to business changes.
Tech Implications
Implementing a Contract Performance Enabler has key technology considerations:
◼️ CLM System Integration: Embedding contract performance tracking within digital contract workflows.
◼️ Automated Notifications & Alerts: Ensuring timely action on contractual obligations.
◼️ AI-Powered Contract Analytics: Leveraging machine learning to assess contract performance trends.
◼️ Compliance & Risk Monitoring: Using technology to identify compliance gaps in real time.
◼️ Dashboard Reporting & Insights: Providing data-driven contract performance metrics.
◼️ Workflow Automation: Reducing manual effort in contract execution monitoring.
◼️ Secure Data Storage: Ensuring contract documents and performance records are securely maintained.
◼️ Cross-Functional Collaboration Tools: Enhancing coordination between legal, finance, and operations teams.
◼️ Scalability & Customization: Enabling contract performance strategies to evolve with business needs.
◼️ Mobile & Remote Accessibility: Allowing contract stakeholders to monitor performance from anywhere.
What Next?
The GLS Knowledge Centre has a wealth of resources available for learning more about the importance of a Clause Bank and how you can effectively implement one - check out a few on the right.
The GLS Legal Operations Centre contains everything you need to effectively implement your own tailored Clause Bank in a cost-effective and timely manner. Check out the resources linked on the right.
Also, feel free to contact GLS to book a consult to discuss your Group Legal Policy needs right here.
