Contract Management

Contract Management is the structured administration, monitoring and control of contracts over their entire lifecycle. This includes recording contract data, terms, notice periods, costs, services, responsibilities and risks. The aim is to make contracts transparent, meet obligations and take economic decisions on a reliable information basis.

In the IT environment, Contract Management is particularly important because licenses, cloud services, service provider contracts and maintenance agreements often have complex cost and service structures. Without a central overview, automatic renewals, unused services or inconsistent conditions can lead to unnecessary spending. A structured approach therefore supports procurement and finance as well as IT organizations. Accordingly, Vendor and Contract Management links contract data with cost, service and vendor information.

Contract Management is closely linked to IT Financial Management, vendor management and compliance. It helps to plan budgets better, identify risks early and prepare decisions on renewals, consolidations or renegotiations. In conjunction with IT Financial Management, contract costs can also be included in cost models, forecasts and charging logic. In addition, KPIs can be used to regularly assess contract volumes, savings potentials or service quality.

See also: IT Asset Management and Service Level Management.