Contracts and Contract Management Systems - Essay Example

Contracts and Contract Management Systems Sub Number Table of Contents Executive Summary 21.0 Introduction 3 2.0 Contracts 3 2.1 Benefits of CLM Solutions 4 3.0 Criminal trial process 6 3.1 Jury Selection 6 3.2 Oath and Preliminary Instructions 6 3.3 Jury Deliberations 8 3.4 Verdict 8 3.5 Sentencing 8 4.0 Contract Management Systems 9 4.1.0 Projectmate 12 4.1.1 Strengths 12 4.1.2 Weakness 12 4.1.3 Opportunities 13 4.1.4 Threats 13 5.0 Conclusions 14 References 15 Executive Summary Benefits of Contract Lifecycle Management for the modern organization are numerous for both parties in a contract. Lifecycle of a contract is also encompassed in the CLM. The process of a criminal trial is given from the jury selection to the sentencing stage. Important stages of a criminal trail include as Jury selection, Oath and Preliminary Instructions, Criminal trial, Jury Deliberations, Verdict, and Sentencing.Contract Management system at Edwards is good for alerting about the expiry dates of the contracts. Edward’s investment is capable to analyze and determine efficiency of contracts according to conditions and requirements. Disadvantages of this CMS also can push the company out of business. A contract management system should function for retrieving and tracking of any information relevant to contracts. Security concerns of Company about this CMS are also severe. Edward is still missing best services of CMS in the market. It cannot locate any record in the system. CSM is a holistic approach for the security and data redundancy. IT management systems are important for both client and management even a client does not have sufficient knowledge about these systems. USDA Rural Development in New York signs a contract with an EPA certified to control the Lead Hazard control system. Projectmate is more commonly used software as contract management software by clients. SWOT analysis of Projectmate supports the developer to see the potential risks of the construction. The Projectmate is web based and can be accessed by the outsiders who are irrelevant of the system. Cost and Time aspects of the Projectmate provide more opportunities to manager to attract more clients. BuildTool is software similar to functions for Projectmate in the market Contracts and Contract Management Systems 1.0 Introduction: This paper addresses the different aspects of the contracts and contract management systems. Contract will be defined from different point of views, and its management for the organizations. Life cycle management of a contract is essential for the involving parties in a contract. After establishing the importance of the CLM, the trial process of a crime is the part of this study that will point out the important stages of a criminal trial process. A Contract management system is a system that has been optimized for the storage and management of contractual agreements in documented forms. CMS is beyond the simple document in that contract management and in most cases overlap with vendor management systems (Betz, 407). 2.0 Contracts: In the modern day context, contracts are considered to be quite vital, possessing immense significance in terms of legal tools, measuring tools for business performance and also as a communication mode to finalize the agreement between two or more business parties. However, the exact definition of a contract, in today’s business circumstances, varies from individual to individual. Where on one hand, it is often regarded as a mechanization of the processes which are required to abolish the blockage of selling process and the lawful activities; similarly, on the other hand, a contract is explained as a process of concession and versioning (Saxena, 11-12). However, in most of the instances, it has been noted that companies fail or rather provide insignificant consideration towards the effective management of contracts and subsequently have to witness various risks hampering the regular business activities in these companies (IBM, “Contract Management — A Strategic Asset”). The discussion intends to focus on the benefits of Contract Lifecycle Management (CLM) solutions for modern day organizations. With this concern, it will also explain road map which is intended to accomplish the purpose of the study, i.e. to obtain a comprehensive understanding of the CLM solutions in case of modern day business context. 2.1 Benefits of CLM Solutions Similar to every management tool or document, contracts are also learnt to go through several phases signifying its life cycle. Notably, the instigation of contract life cycle happens with the formal documentation and signature of the engaged parties deciphering their concession to the specified norms in the written form, i.e. the contract. This is regarded as the conception and creation stage. In the conception and creation stage, both the parties communicate about their desired objectives which they wish to accomplish through mutual understanding and collaboration. The desired objectives are often made open by an agreement between the two parties or through a letter of intent. After the objectives have been identified and mutually settled, contracts are formed which includes the procedure of words formation based on the association of both parties (Saxena, 12-13). Next is the collaboration stage. In this stage, rights and responsibilities of each participant i.e. the engaged parties to the contract, are discussed where different articles and clauses of managing risk situations, tax liabilities, and legal issues among others are often included for the approval of the contract. The collaboration stage is followed by the execution stage where the procedures for contracts and its implementation are planned and observed to identify if any modifications are needed in the clauses of the contract. Subsequently, in the administration stage, the contract is examined thoroughly in order to foresee the probable deficiencies that might occur in future owing to the ambiguity regarding the specifications of payment modes, pricing techniques and other process related lacunas. Furthermore, it is in this stage that final assessment of the contract is made. The aim of this stage is primarily to look that all the process and legitimations are done in a proper manner without any drawbacks. The final stage of a contract lifecycle is the closeout and analysis stage. In this stage, importance is given on budget allocations, along with the study of audiences’ reactions to the accomplishment of the desired objectives after winding up all the resources so that profits can be gathered (Saxena, 14-15). It is in this context that proper management of contract lifecycle tends to be quite significant in minimizing the risks of conflicts owing to the legal definitions and clauses considered during the contract preparation. It is also considered as vital in the overall achievement of the determined objectives which were documented with the consent of all the engaged parties. Contextually, there are multiple benefits of appropriate CLM (CIPS, “Contract Management Guide”). For instance, CLM has been considered as quite effective in enhancing the security of the interests perceived by each participant engaged through the contract. It also tends to secure the profit percentage entitled to every participant. Effective CLM have also been regarded as a tool to generate better revenues by promoting the organizational transparency and financial as well as strategic competencies to obtain persuasive investment opportunities. By minimizing the risks associated with legal obligations of the participants, as well as by securing their business interests, a contract often plays a vital role in preserving coordinated and collaborative intra-organizational and inter-organizational relationships. This in turn decreases the probability of incurring excess costs when executing the business processes. Furthermore, from an overall perspective, CLM fosters contractual, procedural as well as regulatory compliance within an organizational setting increasing its sustainability by a large extent. However, from an overall perspective, CLM can be recommended as a risk mitigating tool (Fletcher, Hernandez and Rizza; Saxena, 15-19). 3.0 Criminal trial process A criminal trial is aimed at making a determination on whether an accused person is guilty under the provisions of the law (Reid). During a criminal trial, there is a jury which is assigned with the responsibility of identifying the facts for the court and assessing evidence presented by different parties before the court. There is also a judge who presides over the court including addressing issues that may arise during the criminal trial. Am judge also guides the jury on how to apply facts to the laws related to the criminal case. This paper provides an outline of the criminal trial process from jury selection to sentencing. 3.1 Jury Selection: This is the first phase of the criminal trial phase and involves the selection of jurors. The number of jurors varies depending on the nature of the case that is being handled. In case of a felony offense, 12 jurors and a maximum of six alternate jurors may be selected; a charge of misdemeanor requires six jurors (Sprack). The judge is always available during juror selection because he explains the principles of law, reads the statement of accusation, and questions potential jurors. The court and the attorneys of the parties involved in the case may question the jurors to ensure that they are fit to serve the case. This process is continuous until all parties get satisfied with the composition of the jury. 3.2 Oath and Preliminary Instructions: This succeeds the screening and selection of jurors. The oath involves making a pledge to act fairly and impartially in assessing all questions and facts. After the oath, the judge will provide preliminary instructions that will outline the basic responsibilities of jurors. Some of the directives include a caution to avoid listening or reading news accounts of the trial, visiting scenes of crime, or discussing the details of the case with members of jury or the public (Reid). Criminal trial: this is a process involving a determination on whether the accused person is legally guilty of criminal offense. It involves a number of steps including: Opening Statements- the prosecutor makes an opening address to the jury after the judge has made preliminary instructions. The address involves giving details of the charges and the evidence that will be used in sustaining the case. The defendant and his attorney can also make an opening statement but this is not guaranteed. People’s Direct- the prosecution presents proof in form of either witnesses or physical objects. Redirect- the defense cross-examines the witness after questioning by the prosecutor. Afterwards, the prosecutor may ask for clarification of questions using “redirect” examination. Defense case- the defense case presents its witnesses who may include the defendant or at times there may be no witnesses. Rebuttal- if a defense is raised, then the prosecutor may have a rebuttal. There is a cross-examination of rebuttal witnesses. Summation- the defense attorney delivers a summation argument and may question the credibility of the testimony. The prosecutor also delivers a summation argument supporting the reason why the defendant is guilty beyond any reasonable doubt. Jury Instructions- the judge describes to the jury the applicable law and elements of the charged crime. The judge also explains various legal concepts including “presumption of innocence”, “burden of proof” and “beyond a reasonable doubt” (Sprack). 3.3 Jury Deliberations: after the delivery of instructions from the judge, the jury leaves the courtroom for a jury room where they commence deliberations. Jurors review the evidence presented during the case and discuss their view on the information (Reid). Sometimes there is a re-read of the testimony whenever questions arise. 3.4 Verdict: the results of the deliberations must involve a unanimous vote by the jury in order to make a verdict that the prosecuted is either guilty or not guilty (Reid). If the jury votes for a guilty verdict, the judge will determine the level of punishment in accordance to the existing laws. In a case where the accused is found “not guilty”, the charges are dismissed. 3.5 Sentencing: before the commencement of a sentence hearing, the court conducts an investigation into the background of the accused and prepares a presentence report which will be presented to the defendant, the judge, and the prosecuting attorney. During the sentencing hearing, the defendant can rebut or even object to the contents of the presentence report. There is also an opportunity to make a statement regarding the sentence determined by the judge. For instance, the defendant can make a plea on a sentence reduction (Sprack). 4.0 Contract Management Systems The contract management has an aspect in document management, but document management has to focus more on management of unstructured data. This means answering the question regarding the project, all that was purchased with the contract, its location and its utilization and performance measurement (Beltz, 408). Therefore, a contract has to have a tie with the structured world and go into more detail regarding managing contractual documents. Contracts are essential in any business procurement activity; they set the processes, terms of supplies, service levels, etc. A good contract management system has to provide all the necessary required features, and offer a holistic integration of all aspects that pertain to a specific project. In the case of Edwards’s investments, the company has some strengths and weaknesses in its contract management system. The system is good in alerting the dates of contract of expiry and the management of important data in the contract. This implies the contract has a self-management system where the manager does not have to keep the track of the expiry dates daily. Beltz (408) argues that a good CSM has to have control of functionalities for updating, informing, and tracking schedules similar to Edward’s investment CSM. Moreover, ensuring the contracts are in compliance with the company’s policies and has to go through an elaborate formal process before the contract is executed. Such a process would amount to having the required control measures that ensure a contract is above board. According to the IBM Corporation, legally binding contracts comprise of obligations and objectives that have to be traced through an entire contract. Contracts have to maximize the business benefits while at the same time reduce potential risks. Edward Investments has these formal processes of authenticating such contracts. Edward Investments have the ability to analyze and compare contracts to determine efficiency is in accordance with contract requirements and conditions. However, the company lacks vital contract management aspects that may cost the company massively, even push it out of business. According to Altiris (2), a contract management system has to ensure tracking and retrieving any information regarding a contract. CMS must ensure that it is user friendly, has to have built in notification policies, notify the IT or accounting manager, has to offer multiple levels of details in the report, and has to allow extensive customization of features as well as ensuring the security of such data. The CMS from Edwards lacks some of the above critical factors that would ensure the proper functioning of the system with respect to enhanced security features to protect the company against any potential losses. For example, the company cannot locate any contract easily and efficiently as required, the company cannot afford to coordinate the contracts across the various divisions; there is no guarantee of regulatory compliance. The company admits to be paying unnecessary penalties and fees, and still missing out on selecting the best CSM service in the market. Edwards CSM according to the criteria outlined by Atiris (1) regarding an ideal CMS scores very low in terms of security, ease of access to any contract at any time, ensuring security standards at the highest levels possible. Lack of an effective and critical follow up of the contract implies the company may end up undergoing great losses or misusing resources by allocating them to already completed projects, which would amount to fraud. Betz (408) elaborates that an ideal CMS has to be thee control point for all expenditures and information technology; it has to be governed with the required architectural checkpoints to avoid any redundant and unsupported technology. The CMS at Edwards has a lot of redundancy as it is expensive and operates dismally; the company is losing out on CMS. A Contract Management system is a holistic approach of classifying contracts. This being said has to have an elaborate system that links all contracts, offers the required checkpoints, informs on vital information related to the contract, reduces redundancy and costs, and allows management of contracts efficiently through a holistic approach where the management can access all contracts. It must manage them and control the required data. A good CMS needs to provide all required contract management and control tools that would make contract management safe, efficient, effective, and much cheaper. Contract management or administration involves planning and utilization of contracts made with clients partners or the company’s employees. At any instance, the management is concerned with the interests of the organization creating the need for customers to present their interests to the management. Application of IT management systems has been known to represent the interests of both the management and the clients. In most cases, the clients do not have concrete knowledge about the type of IT management system applied by the company (Saxena 308). However, they are equally interested with the output of the system. This essay presents a SWOT analysis on the selected clients on their understanding of the contract. USDA Rural Development requires the services of a company that is EPA Certified to perform lead hazard control services in New York. The property in consideration is an agency inventory property that requires to be scrutinized for risks resulting from lead contamination. USDA is a property development company that concentrates its activities in rural development projects. The company has significant concern about the sustainability of its projects in relation to the country’s regulation. In addition, the client is concerned with the impacts of its projects on the environment and the health concerns of its customers. Lead contamination has been identified as a contentious issue in the property development industry and, hence the need to source for an EPA certified company. In order to achieve its objectives, the company needs to sign a contract that guarantee or safeguards its interests. 4.1.0 Projectmate: The client is more likely to be using Project mate as their main contract management software. The software provides an overall monitoring and management of construction projects and, therefore safeguarding the interests of the clients. 4.1.1 Strengths The main strength of the management system is its ability to define the life cycle of a project. This is a significant aspect, since the impacts of a construction project are not easily visible beyond the physical impacts related to the occupied space. A complete analysis of a construction enables the developers to estimate the value of potential risks resulting from the construction. Projectmate offers vigorous document management and bid distribution. This enables the clients to establish the best option from the provided possibilities. In addition, the feature provides a basis for evaluating a contract in relating to the construction needs of the client. The system is also web–based and, hence provides a simple interface for retrieving and submitting information. This minimizes data entry requirements and requirement for approvals. The system also calibrates range for different scheduling and financial budgeting procedures. This helps to save time and increase accountability among the participants. In addition, the feature increases the bargaining power of the clients. 4.1.2 Weakness The main weakness of the system is its web-based features, which allows access of a contract by outsiders. This allows other interested parties and the government agencies to scrutinize the terms and condition of a contract. The system does not have effective bid management system and, hence unsuitable for sustaining customer relations (Saxena, 308). Although the system has been designed with the interests of the customers, it does not include sustainable evaluation criteria. For instance, the system lacks criteria for evaluating returning customers. 4.1.3 Opportunities Projectmate has been considered as the most efficient project management system. The criteria for the ranking are based on the abilities of the software to save time and reduce costs. This indicates that the system is likely to attract new clients to the firm. The impacts of the system to schedule tasks and assignments have made it preferable in project management. Thus, the cost effective aspect of the system has made it popular among project managers. 4.1.4 Threats Availability of other competitive project management software such as BuildTools stands out as a threat t the software. BuildTool has similar features as those found in Projectmate thus threatening its long-term application. The IT system also lacks the capacity to provide effective price schedule making it not attractive in contracts. These results from its fundamental design which allows or cater for life cycle monuments. Been a life cycle management software, the program is best suited for analyzing the impacts of a construction on the environment. Unlike other competitive software, the system does not provide adequate information on cost and taxation. Finally, the product does not offer a complete basis for the signing of building contracts. This makes it less favorable compared to other related or similar software. In addition, the system cannot be used as a long-term proof for a contract. 5.0 Conclusions: Certainly, CLM is a multidimensional and a complex conceptual framework which is subjected to more in-depth understanding. Therefore, to gain a better understanding of the concept, the challenges and the influencing factors associated with CLM will be studied in an organizational perspective. Contextually, the findings generated from the study will be incorporated to develop a comprehensive explanation regarding the role of CLM. Criminal trail process with its important stages of jury selection to sentencing is also part of this paper. SWOT analysis of Projectmate provides the advantages, disadvantages, opportunities and threat from other tools in the market. This product does not offer a complete basis for the signing of building contracts. This makes it less favorable compared to other related or similar software. In addition, the system cannot be used as a long-term proof for a contract. Contract management system is need for both client and other party in a contract. In the current time of technology, both parties in a contract are interested in the development of the CMS. Edward’s contract management system is both advantageous and disadvantageous because of its features. However, the lack of data retrieval of any contract is not incorporated in the core functionalities of this system. Projectmate is a software used for keeping the record of contracts, but similar application of this one have threatened the importance of Projectmate. References: Altiris, Control Management Solution: Asset management, Altiris Inc., 2003 Betz T. Charles, Architecture and Patterns for IT Service Management, Resource Planning, and governance, London: Elsevier, 2011. CIPS. “Contract Management Guide”. Documents, 2007. Web. 22 Oct. 2012. Fletcher, Chris., Hernandez, Mary Kate. and Rizza, Mickey North. “Contract Lifecycle Management a Revenue Opportunity”. AMR Research, 2009. Web. 22 Oct. 2012. IBM Corporation. Contract Management System: A Solution for Cross Industry. IBM, 2010. http://www-01.ibm.com/software/data/information-agenda/catalog/profiles/Datamatics_Contract_Mgmt_System_psp_CROSS_09.html Accessed 8th Dec. 2012. IBM. “Contract Management — A Strategic Asset”. Contract Management Whitepaper, 2004. Web. 22 Oct. 2012. Reid, S. Criminal Justice Essentials. Chicago: John Wiley & Sons. 2011. Saxena, Anuj. Enterprise Contract Management: A Practical Guide to Successfully Implementing an ECM Solution. London: J. Ross Publishing, 2008. Sprack, J. A Practical Approach to Criminal Procedure. New York: Oxford University Press. 2011. Saxena, Anuj. Enterprise Contract Management: A Practical Guide to Successfully Implementing an ECM Solution. India: J. Ross Publishing, 2008. Print. Read More