Today 11 reasons (and thus not a top 10) why CEO’s should ask about their maturity in contractmanagement.

Contract management (CM) is no longer a back-office function—it’s a strategic enabler that impacts revenue, compliance, and reputation. Yet, many CEOs fail to prioritize CM or ask the right questions about its performance. Below, I outline 11 compelling reasons why every CEO should make CM a top priority and the critical questions to ask to ensure it’s driving measurable success.

1. Contracts are the foundation of business relationships

Every partnership, supplier agreement, and client deal begins and ends with a contract. If your CM process is inefficient, it can erode trust, delay projects, and strain relationships.

Ask: How are our contracts aligned with our strategic goals and fostering trust with stakeholders?

2. Poor CM costs you money

Research shows that inefficient contract management can cost companies up to 9% of their annual revenue. Missed renewals, non-compliance penalties, and poor negotiation outcomes all add up.

Ask: What KPIs do we use to measure the financial impact of our CM processes?

3. Compliance risks are on the rise

With increasingly complex regulatory environments, non-compliance can lead to hefty fines and reputational damage. Robust CM ensures compliance is built into every stage of the contract lifecycle.

Ask: How does our CM process mitigate compliance risks and ensure regulatory alignment?

4. AI and technology are changing the game

AI is transforming CM by automating workflows, identifying risks, and improving accuracy. However, not all AI is created equal, and understanding the underlying technology is critical.

Ask: What technologies are we leveraging in CM, and how are they driving efficiency and accuracy? Are we aware of the risks tied to non-proprietary AI models?

5. Contracts are a goldmine of data

Contracts hold valuable insights into pricing trends, supplier performance, and market dynamics. Failure to analyze this data means leaving opportunities on the table.

Ask: How are we extracting and utilizing contract data to inform strategic decisions?

6. Supply Chain under pressure

Global supply chains are under constant pressure, from disruptions to geopolitical risks. CM plays a critical role in identifying vulnerabilities and ensuring continuity.

Ask: Are our contracts structured to protect us from supply chain risks and ensure resilience?

7. Speed as an competitive advantage

Delays in contract approvals or renewals can cost you deals and slow down growth. Streamlined CM processes enable agility and responsiveness.  And then lets not even talk about the loss of innovation in general.

Ask: What is our average contract cycle time, and how quickly can we execute critical agreements?

8. Stakeholder joint effort drives huge benefits

Contracts touch multiple departments—legal, procurement, finance, and operations. A disjointed process leads to inefficiencies and errors.  Remember the days when people said “what procurement bought is not what we need” or “what sales sold we cannot make”….

Ask: How are we fostering collaboration across teams involved in contract management, how do we align roles and responsibilities?

9. CM as an indicator for organizational maturity

A strong CM process signals operational excellence and strategic foresight, which boosts investor confidence and market reputation.

Ask: What does our CM process say about our organizational maturity and readiness for growth, who is the process owner and why?

10. It is not risk, it is opportunity

While CM is often seen as a risk management tool, it’s also a driver of value creation. From negotiating better terms to identifying upsell opportunities, CM can directly impact the bottom line.

Ask: How are we leveraging CM to not just mitigate risks but also create value and seize opportunities?

11. Leverage industry best practices (Bonus)

Best practices in CM can be the difference between mediocrity and excellence. Aligning with proven methodologies ensures your organization is not only efficient but also competitive.

When it comes to industry best practices, CATS CM has been the gold standard since 2005. Its structured framework empowers organizations to maximize value, mitigate risks, and drive strategic outcomes.

Ask: Are we aligning our CM processes with industry best practices, such as CATS CM, to stay ahead of the curve?

Wakey Wakey: the CEO call to action

Contract management isn’t just a functional necessity—it’s a strategic lever for growth, risk management, and value creation. CEOs who fail to ask the right questions risk inefficiencies, missed opportunities, and exposure to unnecessary risks.

By understanding how CM is functioning, measuring its success, and leveraging the right tools and methodologies like CATS CM, you can transform contract management into a competitive advantage.

So, ask yourself: Are we treating contract management as a strategic priority—or as an afterthought?

Het bericht 11 reasons why every CEO should ask about contract management verscheen eerst op Arjen van Berkum | Technology & Contract Management Evangelist.

Stagflation is around the corner in many economies but especially in the largest of them all, the USA. Now it is not up to me to have an opinion on the current geo political and economical tensions but I do think it is vital to think on this topic, especially in our world where everything is connected #contractmanagers need to be aware of this…  In this article first some generic explanation then a more in depth on how a bank might be proactive; this example on plan of approach in a bank is not meant to be a full plan but showing you the different roles in there and to show you a bit of the complexity in practice.

Stagflation is a rare economic phenomenon where an economy experiences stagnation (slow or no economic growth) combined with high inflation and often high unemployment. This scenario is particularly challenging because the traditional economic tools used to combat inflation (e.g., raising interest rates) can further dampen economic growth and exacerbate unemployment, while tools to stimulate growth (e.g., lowering interest rates or increasing government spending) can worsen inflation.

A stagflationary shock occurs when an external or internal economic disruption triggers this challenging situation. Common causes include:

1. Supply Shocks: Sudden increases in the cost of essential inputs (e.g., oil crises in the 1970s) that drive up production costs and consumer prices.

2. Policy Missteps: Overly loose monetary or fiscal policies that lead to inflation without driving sustainable growth.

3. Structural Economic Issues: Long-term inefficiencies or rigidities in labor markets, supply chains, or industries.

The key challenge of stagflation is the dual pressure on businesses: rising costs (due to inflation) and reduced consumer demand (due to stagnation and unemployment).

What companies should do during a stagflationary shock

To navigate such a turbulent economic environment, companies must adopt strategies that balance cost control, operational efficiency, and long-term resilience. Here are some actionable steps:

1. Cost Management:

– Optimize Supply Chains: Diversify suppliers to reduce dependency on cost-volatile regions or commodities.

– Renegotiate Contracts: Revisit supplier and vendor agreements to adjust for inflationary pressures or introduce variable pricing terms.

2. Revenue Diversification:

– Explore new markets or customer segments that may be less affected by economic stagnation.

– Bundle products or services to offer greater perceived value to consumers facing tighter budgets.

3. Operational Efficiency:

– Invest in automation and technology to reduce labor costs and improve productivity.

– Conduct regular audits to identify and eliminate inefficiencies in operations.

4. Pricing Strategies:

– Implement dynamic pricing models to reflect inflationary trends while maintaining competitiveness.

– Focus on high-margin products or services to sustain profitability.

5. Talent Retention:

– Offer non-monetary benefits (e.g., flexible work arrangements, upskilling opportunities) to retain employees without significantly increasing payroll costs.

6. Risk Mitigation:

– Hedge against currency or commodity price fluctuations to stabilize financial performance.

– Build cash reserves to weather prolonged economic uncertainty.

The proactive role of the contractmanager

The Contractmanager plays a pivotal role in helping organizations navigate stagflationary shocks by ensuring contracts, supplier relationships, and financial obligations are optimized for resilience. Here’s how they can support leadership:

1. Proactive Risk Identification:

– Conduct audits of existing contracts to identify clauses that could expose the company to inflationary risks (e.g., fixed pricing, long-term commitments without renegotiation clauses).

– Flag contracts tied to volatile commodities or currencies and recommend hedging strategies.

2. Negotiation and Renegotiation:

– Collaborate with procurement and legal teams to renegotiate terms with suppliers, introducing escalation clauses or index-linked pricing to manage inflation impacts.

– Advocate for shorter contract durations or flexible terms to allow for periodic adjustments.

3. Supplier Diversification:

– Analyze dependency on single-source suppliers and identify alternative vendors to reduce supply chain vulnerabilities.

– Ensure contracts with new suppliers include performance guarantees and penalties for non-compliance.

4. Cost Transparency and Reporting:

– Provide leaders with clear, data-driven insights into contract-related costs and their inflationary trends.

– Develop dashboards to track compliance, cost overruns, and supplier performance in real-time.

5. Strategic Alignment:

– Align contract management processes with organizational goals, such as cost containment or market expansion.

– Collaborate with finance and strategy teams to model the long-term impacts of inflation on key contracts.

6. Scenario Planning:

– Work with leadership to simulate different economic scenarios and their contractual implications.

– Develop contingency plans for high-risk contracts or suppliers.

7. Automation and Efficiency:

– Leverage contract management software to streamline workflows, reduce manual errors, and ensure timely renewals or renegotiations.

– Use AI-driven analytics to predict trends and identify opportunities for cost savings.

Wrap up on stagflation and contractmanagers

A stagflationary shock presents a complex economic challenge, but companies that adopt a proactive, strategic approach can not only survive but also position themselves for long-term success. ContractManagers, as key enablers of operational resilience, play a critical role in mitigating risks, optimizing costs, and ensuring that leadership has the data and flexibility needed to make informed decisions. By embedding agility and foresight into contract management practices, they help organizations navigate uncertainty with confidence.

An example of stagflation in a bank

Overview:

Stagflation, characterized by high inflation, stagnant economic growth, and rising unemployment, poses unique challenges for banks. Contract managers play a pivotal role in mitigating risks, ensuring compliance, and maintaining financial stability. Below is a concise plan of action for banks and the recommended structure for a “Taskforce Stagflation.”

1. Strategic Objectives for Banks

– Preserve Liquidity: Ensure sufficient liquidity to navigate economic uncertainty.

– Mitigate Inflationary Pressures: Monitor and control costs in procurement and contracts.

– Strengthen Risk Management: Enhance oversight of contractual obligations and credit risks.

– Customer Retention: Implement measures to support clients facing financial distress.

– Regulatory Compliance: Stay ahead of evolving regulations and compliance requirements.

2. Role of Contract Managers in Stagflation

a. Cost Control and Optimization:

– Review Existing Contracts: Identify opportunities to renegotiate terms, such as pricing, payment schedules, or service levels, to mitigate cost increases.

– Indexation Clauses: Analyze contracts with inflation-linked clauses to assess financial impact and renegotiate where feasible.

– Supplier Consolidation: Reduce reliance on multiple vendors by consolidating contracts with key suppliers offering favorable terms.

b. Risk Mitigation:

– Credit Risk Monitoring: Review counterparty creditworthiness to avoid defaults.

– Force Majeure Clauses: Evaluate applicability in case of economic instability affecting contract performance.

– Scenario Planning: Develop contingency plans for worst-case scenarios, such as supplier insolvencies or market collapses.

c. Compliance and Transparency:

– Ensure compliance with financial regulations, including reporting obligations and anti-inflationary measures.

– Maintain transparent communication with stakeholders, including suppliers, clients, and regulators.

3. Taskforce Stagflation: Structure and Responsibilities

It is vital to setup a cross functional task force, in this part of the article I dive a bit in this taskforce.

a. Composition of the Taskforce

1. Chairperson: Senior executive to oversee strategy and decision-making.

2. Contract Managers: Experts in contract negotiation, risk assessment, and supplier management.

3. Risk Management Specialists: Professionals to assess and mitigate financial and operational risks.

4. Economists/Market Analysts: Advisors to provide insights on inflation trends, market forecasts, and economic policies.

5. Legal Counsel: Ensure all actions comply with regulatory frameworks and contractual obligations.

6. Procurement Specialists: Focus on supplier negotiations and cost control.

7. Customer Relationship Managers: Address client concerns and implement retention strategies.

b. Responsibilities of the Taskforce

– Scenario Analysis: Conduct regular assessments of economic conditions and inflationary pressures.

– Policy Implementation: Develop and enforce policies to manage inflation, cost control, and risk.

– Stakeholder Communication: Maintain open lines of communication with clients, suppliers, and regulators.

– Performance Monitoring: Track the effectiveness of implemented measures and adjust strategies as needed.

4. Immediate Actions for Contract Managers

– Conduct a portfolio-wide audit of contracts to identify high-risk agreements.

– Engage in proactive renegotiations with key suppliers to secure cost stability.

– Collaborate with the taskforce to align contract management strategies with overall bank objectives.

– Monitor inflation indices and adjust financial forecasts accordingly.

– Strengthen relationships with clients and suppliers to foster collaboration during economic uncertainty.

By adopting a structured approach the bank ensures that it remains resilient, minimizes financial losses, and maintains trust with stakeholders during the stagflation period.

Het bericht Stagflation, the economic shocker around the corner verscheen eerst op Arjen van Berkum | Technology & Contract Management Evangelist.

In this article I will dive into the role of contractmanagement in customer success: It is all about building stronger client relationships

Customer success is not just a department or a buzzword; it is a critical function that ensures clients achieve their desired outcomes while using your products or services. It’s a proactive approach, focusing on delivering value, retaining customers, and fostering long-term partnerships. However, one element often overlooked in this equation is the role of contracts—arguably the foundation of every client relationship. Let’s delve into the interplay between customer success and contract management, and why integrating these functions is vital for delivering on promises and driving mutual success.

What is Customer success?

At its core, customer success is about ensuring that clients derive maximum value from their investment in your offerings. It’s a shift from reactive support to proactive engagement. Typically, the customer success function is organized into teams or roles dedicated to:

– Onboarding clients and setting them up for success from day one.
– Monitoring usage and performance to identify opportunities for improvement.
– Acting as a trusted advisor to guide clients in achieving their strategic goals.
– Retaining customers by addressing challenges before they become problems.

Customer success teams are often the bridge between the client and the company, ensuring alignment on objectives and outcomes. Yet, despite their critical role, they can sometimes operate in silos, disconnected from the contractual obligations that underpin the relationship.

Contracts: The foundation of client relationships

Contracts are not just legal documents; they are the blueprint of the client relationship. They define the scope, deliverables, timelines, and financial terms that govern the partnership. A well-structured contract provides clarity, sets expectations, and serves as a reference point for both parties.

Why are contracts so fundamental? Because they translate promises into actionable commitments. Without a clear and comprehensive contract, even the best customer success teams can struggle to deliver value, as their efforts may lack alignment with what was originally agreed upon. As one of our clients aptly put it, “Customer success is probably the best description of a contract manager at our sales side of the organization.”

Involving customer success in contract creation

To truly align customer success with contract management, the customer success function must be involved early in the contract creation process. Here’s why:

1. Understanding Client Needs: Customer success teams have firsthand insights into client goals and challenges. Their input ensures that contracts are tailored to address these needs effectively.

2. Setting Realistic Expectations: By collaborating on the contract, customer success can help define achievable deliverables and timelines, avoiding overpromising.

3. Establishing Clear Metrics: Success metrics should be embedded in the contract, providing a shared understanding of what “success” looks like for both parties.

When customer success professionals contribute to the contract’s development, they are better equipped to manage the relationship and deliver on promises, as they have a deep understanding of the agreed-upon terms.

The art of managing the contract

Managing a contract is not just about maintaining a positive perception with the client—it’s about delivering on the commitments outlined in the agreement. This requires a multifaceted approach, including:

1. Delivery management: Ensure that all deliverables are provided as specified in the contract, on time and to the agreed standard. This requires close collaboration with internal teams to align execution with contractual obligations.

2. Engaging key client stakeholders: Building relationships with decision-makers and influencers within the client organization is essential. These relationships provide insights into the client’s evolving needs and help address potential issues proactively.

3. Financial oversight: Contracts often have financial implications, such as payment schedules, penalties, or bonuses tied to performance. A keen eye on these elements ensures that the financial aspects of the relationship are managed effectively, avoiding disputes and ensuring profitability.

4. Monitoring and reporting: Regularly track progress against the contract’s terms and provide transparent updates to the client. This builds trust and demonstrates accountability.

5. Adaptability: Contracts should not be static. As client needs and market conditions evolve, the ability to renegotiate or amend contracts ensures that the partnership remains relevant and mutually beneficial.

Customer Success: The new face of contract management?

In many ways, customer success professionals are becoming the de facto contract managers on the client-facing side of organizations. They are responsible for ensuring that the promises made during the sales process are fulfilled, and that clients derive the value they were promised. This alignment between customer success and contract management is not just a best practice—it’s a necessity in today’s competitive landscape.

By integrating customer success into the contract lifecycle—from creation to execution—organizations can build stronger, more resilient client relationships. Contracts become living documents, guiding the partnership and ensuring that both parties achieve their goals.

Final thoughts

Contracts are the foundation of customer success, and managing them effectively is key to delivering value and fostering long-term partnerships. By involving customer success teams in the contract creation process and emphasizing proactive contract management, organizations can ensure alignment, accountability, and mutual success.

In the words of one of our clients, “Customer success is probably the best description of a contract manager at our sales side of the organization.” Let’s embrace this perspective and elevate the role of contract management in driving customer success.

Het bericht Contractmanagment and Customer success; a winning team verscheen eerst op Arjen van Berkum | Technology & Contract Management Evangelist.

Technology, Human Insight, and Evolution

Contract management is undergoing a seismic change. A huge transformation is on the horizon, driven by the convergence of technology, evolving business roles, and the ever-growing complexity of global dynamics. As we try to navigate these changes (and there are a lot), it’s clear that contract management is no longer just about managing documents—it’s about managing relationships, ensuring compliance, and creating value across the entire lifecycle. Let’s explore the most significant trends shaping this field today.

1. Technology: The backbone

The contract lifecycle, from creation to execution, is now heavily supported by advanced technologies. Tools leveraging artificial intelligence (AI) and machine learning (ML) are revolutionizing how contracts are drafted, reviewed, and managed.

Contract creation: Technology is enabling legal professionals to draft contracts faster and with greater precision. AI-powered tools can analyze vast databases of clauses, case law, and industry standards to suggest optimal terms and flag potential risks. This augmentation allows legal teams to focus on strategy rather than repetitive tasks.

Contract execution: On the other hand, the execution phase is evolving into its own specialized domain. Workflow automation, smart contracts, and integrated platforms ensure that obligations are tracked, milestones are met, and risks are mitigated in real-time. This bifurcation of creation and execution reflects a maturing field where each phase demands unique expertise and tools.

However, as transformative as technology is, it is not a panacea. While algorithms draft and analyze with remarkable efficiency, human oversight remains irreplaceable. The nuance of intent, context, and relational dynamics cannot be fully captured by machines. This duality—leveraging technology while ensuring human validation—underscores the importance of collaboration between tech and talent.

2. The Education imperative

One of the paradoxical challenges of automation is its impact on career progression. If junior-level tasks are increasingly automated, how do we ensure the pipeline of future senior leaders? This is a pressing question for the contract management ecosystem.

The answer lies in significant investment in education—both theoretical and practical:

Theoretical mastery: Professionals must understand the models, frameworks, and mechanics that underpin the discipline. A strong foundation in the principles of contract law, risk management, and compliance is essential. Understanding the different theories out there are a must.

Interpersonal excellence: Equally important is the development of soft skills. The ability to negotiate, foster trust, and maximize value in relationships is what differentiates good contract managers from great ones. Technology can support, but it’s the human touch that drives exceptional outcomes.
Education must evolve to balance these dual priorities. Organizations, academia, and professional bodies have a shared responsibility to create pathways that prepare the next generation of contract leaders.

3. The changing role of business in contracts 

Gone are the days when procurement gets the blame, “We bought what we didn’t need,” or operations saying, “We sold what we can’t deliver.” The interconnectedness of modern businesses demands accountability and alignment across all functions.

The increasing specialization of companies has amplified the importance of managing product chains and breaking down silos. Contract management is no longer a back-office function—it’s a strategic enabler that ensures the entire value chain operates seamlessly. This shift is particularly critical in today’s environment, where:

Global Economic Pressures: Rising costs, inflation, and supply chain disruptions demand agile and resilient contract strategies.

Geopolitical Tensions: Trade wars, sanctions, and shifting alliances add layers of complexity to cross-border agreements.
In this context, contract management professionals are not just administrators; they are strategists, risk managers, and value creators. Their ability to adapt, innovate, and lead will determine their relevance in the evolving business landscape. And every leader should be aware of the dependency of external relations in general and how to deal with it.

The call to evolve: staying relevant in dynamic world
Relevance is not static. It requires continuous evolution, especially in a field as dynamic as contract management. Professionals must embrace a mindset of lifelong learning, growth, and experimentation. This evolution can take many forms:

Formal Learning: Enroll in courses, attend workshops, and pursue certifications to stay updated on the latest tools and trends.

Practical Experimentation: Test new approaches, pilot innovative solutions, and learn from both successes and failures. Go to events where practices are shared and listen and learn.

Simple Habits: Sometimes, growth can be as straightforward as reading a book. The insights gained from thought leaders and industry experts can spark new ideas and perspectives. Great books are found everywhere and it is not just the “procurement” classics

The future

As contract management continues to gain relevance, its practitioners must rise to the occasion. Technology will undoubtedly play a central role, but it is the human element – our ability to think critically, connect meaningfully, and adapt continuously – that will define success.

In a world marked by uncertainty and complexity, the mantra for contract management professionals, leaders, procurement, everybody is clear: evolve, learn, grow, and stay open-minded. The future belongs to those who are ready for it.

Het bericht The Big Trends Shaping Contract Management Today verscheen eerst op Arjen van Berkum | Technology & Contract Management Evangelist.

Top 15 failures in the creation of contracts that make the execution into a potential nightmare or disaster.

Contract creation isn’t just about drafting terms—it’s about crafting a robust foundation for execution. Yet, time and again, we encounter the same mistakes that turn contracts into obstacles rather than enablers.

Top 15 pitfalls in contract creation

Here are my top 15 pitfalls that make contract execution unnecessarily difficult—and why they’re critical to address:

1. No exit strategy

A contract without an overarching exit strategy leaves parties unprepared for the end of the relationship. Whether it’s due to project completion, unforeseen circumstances, or disputes, the absence of a strategy creates uncertainty and risks legal entanglements.

2. Bad or missing exit clauses

Even when exit clauses exist, they’re often vague, impractical, or unenforceable. Poorly drafted clauses can trap parties in unfavorable conditions or lead to costly legal battles upon termination.

3. Bad or not even a change process

Change is inevitable, yet many contracts lack a clear mechanism to manage it. Without a structured process, agreements quickly become outdated, leading to misalignment and execution challenges. For me the end of a contract is a form of change process. How to break up and move on.

4. Fuzzy word use

Ambiguity in contract language is a recipe for misinterpretation. When terms are unclear, parties may have conflicting understandings of their obligations, resulting in disputes and delays.

5. KPI overload

Overloading contracts with excessive KPIs creates unnecessary complexity. Instead of focusing on strategic priorities, parties get bogged down in tracking and reporting irrelevant metrics.

6. Unclear governance structure

When roles, responsibilities, and decision-making processes are undefined, execution becomes chaotic. Clear governance ensures accountability and smooth resolution of issues.

7. Ignoring the allocation of risk

Failing to allocate risks appropriately leads to disputes when unforeseen events occur. Proper risk-sharing mechanisms protect both parties and ensure fair handling of challenges.

8. Over-Reliance on boilerplates

Copy-pasting standard clauses without tailoring them to the agreement’s specifics often results in irrelevant or unenforceable terms, weakening the contract’s effectiveness.

9. Lack of focus on relationship management

Contracts that prioritize legal formalities but ignore the relational dynamics set the stage for mistrust. A strong contract fosters collaboration and mutual understanding.

10. Poor documentation of assumptions

Assumptions made during negotiations often remain undocumented, leading to misaligned expectations. Proper documentation ensures clarity and alignment from the outset.

11. Failure to address End-to-End lifecycle

Contracts often focus solely on signing, neglecting execution, monitoring, and renewal phases. A comprehensive approach ensures the agreement remains relevant throughout its lifecycle.

12. No dispute resolution mechanism

Disputes are inevitable, but many contracts fail to outline a clear process for resolving them. Without this, conflicts escalate unnecessarily, damaging relationships and delaying execution.

13. Unrealistic deadlines

Setting impractical timelines creates undue pressure on both parties, leading to rushed work, missed milestones, and strained relationships.

14. Failure to consider external factors

Many contracts overlook external influences like regulatory changes, market dynamics, or force majeure events. A robust agreement anticipates and accommodates these variables.

15. Overcomplicated legal jargon

Contracts written in overly complex legal language alienate stakeholders who aren’t legal experts. Clear, accessible language ensures all parties fully understand their obligations.

Why This Matters

Contracts are more than just legal documents—they’re the backbone of successful business relationships. By avoiding these common pitfalls, you can ensure smoother execution, stronger collaboration, and better outcomes for all parties involved.

And is this list complete, no, it is why there are checklists out there that help you further. The key point I wanted to make here is that if procurement and sales dont talk to contractmanagement or customer success management there is a setup for issues and potential failure.

Het bericht Top 15, a list of classics in contract creation verscheen eerst op Arjen van Berkum | Technology & Contract Management Evangelist.