Commercial and Contract Management

Discuss about the Commercial and Contract Management.

Delegate in Work Role

Teamwork becomes a necessity when the work at hand is too large and requires the participation of multiple people. Projects that are complex and fast moving also need toe completed by multiple people working as a team. The process of delegation is simple when heard but is quite difficult in real life application. One of the major duties of a manager or administrator is to delegate or assign work or projects to the members of the team wherein each member is assigned his or her set of duties and the total set of duties is divided among the members of the team. The act of delegating or assigning duties requires years of experience and great management skill as it is considered as one of the most important aspect of leadership qualifications among as well as management skills (Mutua, 2014). The act of delegation is important as it allows managers to give up on a few tasks and assign it to others. The proper ways to utilize delegation methods ensure that a person can improve their status within the company and get to higher designations. For improving the status within a company a person has to have the skills to provide and distribute work to the persons who are knowledgeable and can provide work to the capable employees for timely completion of targets and projects (Waiganjo, 2014). It can easily be said the delegating is one of the most needed skills in the Management industry. The skill for delegation not only requires knowledge but also requires maturity and experience. The manager or administrator is required to have an analytic brain and assess all the possibilities before engaging someone in work (Oteyo, 2014). The requirement is to first pick the right person for the work that is required to complete. Assigning work to the wrong person can result in poorly done projects and less satisfaction. Also, putting pressure on undue people can also result in work that is of poor quality. One of the required skills for good delegation is to communicate and have good knowledge about the requirements and the skills of the person in question (Anbari, 2008).

A manager or a person who is delegating work requires patience and skill to handle the work, so that he can assign work to the right persons. Many managers have the wrong assumption that they will make a better team with him doing most of the work, but it is wrong. It is the duty of the person to carefully know the best way to divide work so that the manager or administrator can do his work efficiently. The need today is for a person who manages the contracts of the company with the different clients throughout the different sectors of the company. These sectors can be like employees, business partners or even normal customers. This system of management is often termed as Contract management. In the normal business of a company there are multiple contracts formed that need to be managed so that the constant flow of income for the company is not disrupted. The importance of contract management might seem unimportant but it is an important aspect of any business. The client lifecycle can be enhanced (Bresnen, 2008). Another important aspect that companies need to adhere to is the terms they have stated in the contracts, therefore the contract managers need to be alert and check continually so that there is no discrepancies for the contracts that are under him/ her. Usually in a large scale company it is impossible for a single person to handle the thousands of contracts that are maintained under them, but there is some contract management software available for the ease of contract management. The commercial manager however manages the contract manager and instructs on what the proposed steps should be. The main reason why there is a distinction between the commercial and contract management is that even though both the term indicates the work of creating and maintaining contracts, the commercial management section also created scope for the company to increase its revenue and works closely for the settlement process too (Jensen, 2006).

Programme Concepts and Principles

Many organizations regard Commercial as a special and separate section of the management of a company and this trend is especially prevalent in the United Kingdom. For companies that work in project and a project-oriented working environment, it is a requirement that they regard Commercial as a special capability within an individual. Especially business to business dependent sectors as well as exchanges are seeing systematic changes within themselves. The importance of contract management has been established by all and it is also accepted fact that contracts are important aspects of a business. The need today is to not only manage the contacts, both commercial and internal buy to have proper grasp and control over every aspect related to your contracts (Lazar, 2000). When companies are finding it hard to keep the land beneath their feet stable in an economically turbulent time, these contracts can become your assets and having proper contract management is necessary for the development and smooth running of the company (Marshall, 2000).

So, what exactly are contracts? Contracts are agreements and sometimes a gist of terms and conditions signed within customers and businesses and sometimes within two businesses, in case of a B2B situation. The more contracts a company has, the more power it has over the market and is more stable. The employees and vendors, from partners to customers, everyone can be engaged with contracts with the business. The main aim for contracts is to create a terms and conditions between the seller and the buyer in layman’s terms (Packendorff, 2005).

The contract management is a fairly new arena in the business management processes and is quite a new term in the United States as well. The contract management revolves around the simple task of managing the contracts that are created with the company and managed with other companies. These professionals are engaged in the following works; (a) The creation of contracts : the contract managers are people who keep a lookout for the contracts that need to be created depending on the proposals provided to the said company. The job of the contract manager is also to check the terms and conditions of each contract or proposals submitted to the company and evaluate the proposals and shortlist the ones that are beneficial for the company.  The contract manager assesses the prospective bids or proposals and analyses the effects of each ones and forwards the important ones for review (Cicmil, 2005). The job of the contract manager is to assess and forward. Usually after the approval from both the parties the contract manager delegates the work within the designated team for fulfillment; the manager hardly tries to take chances and sticks to the norms or rules and works according to it. Also after the proposal is forwarded by the higher authority for selection the manager then communicates with the concerned customers and come to the terms, pricing and conditions associated with the contract. Once the three aspects, conditions, price and terms are finalized, the manager is free to assign the work to the concerned delegates and supervise whether all the work is being done in the proper way, It is also the job of the contract manager to find any scope for betterment or problem and deal calmly and tactfully so that there is no need for last moment problems (Romze, 201). Contract management when done in the right way can assure that the services or goods created by the company are accepted by the buyer company without a problem, the manager can create a better environment for the workers and create the scope for better working condition, operation as well as uphold the company’s name in the society. Another important aspect of the work of a contract manager is to keep a lookout for the contract renewals. Renewals are times when the original contract is near to the expiry and the company proposes a new contract or ants the buyer to renew the contract. Contract renewal is an important aspect of the work duties of a contract manager since a large company may hold thousands of contracts and it is important that every renewal is looked into carefully and renewals are handled in the right way (Heneghan, 2015).  Most of the times contract managers are associated with working out ways for completing projects in time and creating contracts that re profitable for the company. Seldom do these managers go out of the line to try something new or take chances as they are people who have been designated to work as the plan. The company’s scope for new business opportunities and having the profitability depends on the innovative ideas from the commercial manager. The commercial management is a section of management which involves taking risks, creating new avenues, helping the business grow at rapid rates, knowing and understanding market values and inclination and preparing the company for the switch (Hill, 2002). These managers are also associated with the risk taking decisions that often lead to success for a company and create the means for additional revenue. The skill set of commercial managers vary from company to company but for most case s they are expected to have leadership and supervision skills. Since these managers are expected to handle crisis and delegate work to the team members, they are required to have good supervision and leadership talents, they are also expected to provide project strategies formulated for each situation and find unique and profitable ideas. The handling of budget and financial sections is also associated with this job as these managers are expected to forecast and plan ways to increase revenue generation. They are also expected to create new strategies and implement them successfully. Some commercial leaders are also expected to have good knowledge of writing proposals and SLA’s and have good supply chain management skills too (Meckling, 2006).

Also there is a need for the suppliers for your company to take full advantage of their expertise in the business, the commercial management section also deals with getting the most out from the contractors, the importance needs to be provided to the most important contracts who are said to produce the most amount of revenue for the commonly and the suppliers are also required to be monitored so that there is no discrepancies afterwards. The contracts that are already completed need to be reviewed to see whether all aspects for the contract were successfully completed or whether there was any scope of improvement. There is a need for the easy filing and easy retrieval of the contracts which can make it easier for others to access it at the needs of the times, the need for creating good relationship among the team is also important since teamwork can create better performances hence profitable contracts. Most importantly these contracts need to be completed keeping in mind the terms and conditions specified, the stakeholders of the commpany should also put in their valuable insights for the overall improvement (Sibbet, 2015).

While it can be said the huge amount for general and low budget/ complicated contracts can easily be handled by the contract manager and through manual contract management systems, it is required that the large scale and important ones are handled by the commercial managers who can assess every aspect of the contract, weight down the benefits and losses, evaluate scope and also keep an eye on the quality of final profits or services to keep the company’s reputation intact (Wanjau, 2010).

Reflective Assessment: Ideas and Insights

The contract management system and the contract generation system is a long one. A successful contract is not created within a moment and it takes participation from both ends. There are surely some stages through which every contract passes. These stages are important in the reaction of the new contract and require the active participation from both the parties, whether they are customer and seller or vendor or seller. The first stage for any contract surely starts from the company or side which wants to create a contract and requests the company for a quote for the services or products they require, this stage is important since there is a problem of legal agreements and terms. Usually the legal team of both eth companies or customers handle this section as there are many companies that lack proper personnel to complete the procedures in the right way so they are provided with old templates that are used most times to create new contracts. But not having the right repository often creates financial and compliance problems within companies. The next step involves the generation of contracts. While there are many types of contracts there are some popular ones like standard contracts or specific type of contracts. There is a need for additional time and manpower in this stage and sometimes many contracts take a long time to be processed from this stage (Saxena, 2008). After the generation of the contract comes the Negotiation part. Negotiation is the negotiation that takes place between the buyer and the seller about payment, changes in contract, terms and other changes are discuses and both the parties have to come to a single set of terms for the contract to be actualized. After the negotiation occurs within the parties and the standard terms or a unified set of terms and conditions are created, it is time for the sale team to complete the contract and deliver the goods or services. Sometimes the contract might be involving a huge amount of products and can have huge value which must be approved by the main management. Sometimes the legal team also finalizes and the terms are conditions are checked to see if all the conditions are met and the contract deliverables are delivered. The execution part is met and often after this stage the contracts are kept into filing sheets for future reference. It is important to argue that a successful contract will have both the parties complying with the terms and conditions both agreed to follow. There may be many challenges and even scope for human errors but the main terms and conditions should be met for the contract to stay valid. Today there are many manual ways to manage and create new contracts. We have already mentioned the creation stage where the companies create the contract and assess the terms and conditions but there is always the scope of having problems like human errors and problems like noncompliance that can create trouble for the company providing service or goods. The need for the effective management of obligations is also an aspect that the contract managers look into closely as this is apart that determines whether a contract is probable to renew the contract or withdraw it. Post the customer renewal of contracts it is important to take a close look at the costs and other sections of the project through proper auditing and reporting methods. Sometimes, at the time of renewal the contracts can also go through the proposal of amendment from both sides, resulting in amendments to the usual contrac (Davenport, 2009)t.

The work of the commercial manager revolves around the generation of revenue for the company and creating further returns for the company from places where the company has spent money. Some texts suggest that this particular term and designation has a history within the United Kingdom’s reign over the years and has had a history in their construction industry as well as the defense industry. The commercial management is a part that might seem simple but it is quite difficult to describe, since it involves a lot of management and business sections, the purpose of commercial management is a branch of business organization, which involves the creation of many policies and terms that govern the main events and services of the company. Every company has certain policies and set of rules, which are important in the way the company, functions and provides the services. The main responsibilities handled by the commercial manager is to handle the trading of the company with the customers, vendors etc. The commercial manager is required to have a good amount of leadership skills which involve taking risks and creating new business goals for the company. These risks and procedures are sometimes out of the book or sometimes experimental which are a reason why these rules sometimes fail and sometimes they bring massive success. The commercial managers deal with chances and are implementers of new rules and techniques (Davenport, 2009). They are innovators who bring something new to the table and create business opportunities. Their involvement in the process of creating business for the company does not stop at any level, these leaders are at the heart of making the business profitable and providing services that uphold the company’s reputations. The commercial management team also provides technical support and participates in the claiming process for contracts and if there are any disputes, the team also works to create an agreeable settlement. The job description also allows him. Her to be able to control supervises and decides the payments and the services that are being offered. The outsourcing of material is also handled by him and the title also gives proper power to control and manage the contractors that are related to the business and also the members in the contractor team. The main objective of a commercial manager is to improve the business of the company and create better contracts. The most important clients and contracts are handled by the commercial manager who is present in all the planning and delivering the products or services. The designation requires people to be able to participate in the contract from the proposal to the implementation and auditing.  The following stages of the system should also be monitored and made easy to use by the managers who need to keep an eye out for the services they make available for their customers (Lazar, 2000).

Key Learning Points and Actions

The main objectives of the study were to create and understand the differences between commercial management and contract management. The two have been repeatedly measured and studied throughout United Kingdom where commercial management is surely a term that’s becoming popular in every new company and even in some large scale companies. Before the 2010  the term ‘commercial management’ was something only people and companies in the United Kingdom used to refer to, the term was quite new for the global market but it is slowly changing and the term has become popular in many parts of the world, but sill there are many places where the term is fairly new. The term resembles a job or signifies a specific job title that caters to the management of contracts but they are suggested to be superior to the usual Contract managers who are busy performing their duties in the orderly fashion only (Meckling, 2006). The job of a commercial manager is to cater to the needs of the project; they are associated with the business development and provide new ideas to the table. They are passionate and are inclined to the improvement of the sales of the company and even increase business through their continual process of development. These people are connected with the major events that occur within the company like major acquisitions, Commercial management requires proper leadership techniques and qualities from the people holding the post. It is important that the person is able to take big decision in a wise way, and even help the company keep up their business in crisis situations. Whereas the contract manager is someone who is given a set of duties of managing the contracts which are usually low budget or not complex or of huge importance. These people are usually less inclined to leaders and that these people are more inclined with following the processes assigned and trained to them than churn new ideas and take tough decisions. The lack of judgment is common for contract managers. The term of commercial manager is fairly new in the United States because earlier the United States had faith in their continual and data driven processes that had provided them with huge returns, but commercial managers are exercisers of judgment, tactics and risk takers too (Jensen, 2006). Commercial managers often take decisions without being certain of the outcome, it is true that sometimes their plan also fails but these people are leaders who can turn even the worst case scenarios into a good one. This skill is not developed in a year or two and requires years of experience of working and understanding the works of the market and assessing the possibilities, here’s where the Commercial Management section excels. It works on making the company’s contracts its assets and managing the way the business handles them to create a solid structure for the company that guards them in situations like economic downfall. Similarly there are conditions where the planning might backfire and the company might see loss, but with the small contracts providing support the commercial magnet team can take risk with the large contracts and improve the business of Rhea Company. Hence it can be said that both the aspects of management and both the persons responsible for performing the duties are important in the purview of the company (Cicmil, 2005).

Critical Reflection

The main reason for businesses to succeed is to depend on efficient people who are able to handle the delegations properly. The requirement is to assign work to the right people without making wrong assumptions about their abilities or do not have the skill set required to complete their work efficiently. The management of contracts is a section that needs to be handled carefully by learned and experienced people who are well versed with the importance of commercial and internal contracts and their importance for a company. In the era where the economy is unstable and constantly contacts can become the lifeline of your company. The best way to keep this lifeline safe is to apply tried and tested means of keeping more contracts and keeping them in the client cycle. The companies need to focus more on the proper means to manage and assign work so that the contracts they manage are efficiently delivered. Poor deliverables, not adhering to their terms, providing unethical products or services or providing incentives that have not been mentioned can be the reasons why a company can lose an important contract so it is of utmost importance that the company keeps its commercial and contract management team active and plans ahead. It is the duty of the contract management personnel to see that stakeholders and the company interests are protected and the customer cycle is enhanced. The risks need to be assesses and contained so that the objectives of the company are preserved. It is also important for prospective management to assess the negative aspects of the contracts and adversities that may occur in order to become proactive, it’s important to keep an open mind and use the latest means of Contract management to increase chance of customer satisfaction and increase customer cycle. The commercial and contract management are two quite different aspects of management within a company but it can be said that they both are interlinked. One part diligently follows the rules and terms applied to them to complete the requirements of the time and the other pat requires the person to look into every aspect of the business, create scope for betterment and improve the conditions in which the company can attain better sales and get better customer satisfaction. 

References

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