Managing Enterprise third party contracts can be daunting. In the case of a large financial institution, the sheer scope of work includes hundreds of third party vendors and thousands more contract documents. We work in an environment where it is vital to stay ahead of the fast pace of business while providing quality support to our Business Lines. From onboarding a new third party that will provide critical services to the organization, to processing a standard renewal of an existing contract, contract management doesn’t have to be overwhelming with the right amount of thought, preparation and communication.
Five Best Practices:
1. Get Involved Early
Connect Business Lines with appropriate resources early. When selecting and onboarding new third parties, have a clear engagement model for your Procurement/ Sourcing group, in order to direct Business Lines to the appropriate resources to help them with RFPs/RFIs, pricing analysis and negotiation when they need it.
For renewals of existing contracts, create an automated or otherwise reliable process whereby the individuals that “own” the contract and third party relationship are automatically notified well in advance of upcoming renewals. This allows for sufficient time to review third party performance, address current performance gaps and learn what the Business Line’s needs are moving forward with regard to budget and services. This further allows for enough time to negotiate updated pricing, modifications to services or products, and perhaps adjustments to SLAs. If these conversations don’t kick off early enough, frantic conversations will ensue in the weeks or days leading up to expiration, leaving the organization disadvantaged when it comes to the relationship, pricing and quality of service.
2. Clearly Define Timelines, Responsibilities and Expectations
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