Contract manager

a new project team member?

Conference Paper Strategy 13 May 2016

Bellec, Martial | Cottard, Olivier

How to cite this article:

Bellec, M. & Cottard, O. (2016). Contract manager: a new project team member? Paper
presented at PMI® Global Congress 2016—EMEA, Barcelona, Spain. Newtown Square, PA:
Project Management Institute.

MARTIAL BELLEC

OPM, PMP, PgMP

Orange Business Services

OLIVIER COTTARD

ITILv3, PMP

Orange Business Services

Contract management becomes strategic for many companies exposed to complex projects.
The scope of contract management has strongly evolved in the last ten years. It now becomes
more mature and offers a range of processes to be applied during the contract life cycle.
Strong synergies exist between project management and contract management where contract
managers and project managers need to team up and agree on their respective roles and
responsibilities during project implementation. Orange Business Services is engaged in a
long-term programme to develop contract management skills and achieve increased
performance of the projects.

Keywords: PMBOK® Guide, contract management, project management

INTRODUCTION
A signed customer contract is a must prior to the effective launch of the customer project in
order to efficiently manage the technical, operational, and financial aspects of the project.
Contract management is becoming critical within many companies who consider this activity
as strategic for the performance of their activity and the quality of their relations with their
main customers and suppliers. Contract management needs to be more and more considered
as a key component of project management.

HOW TO DEFINE CONTRACT MANAGEMENT

PARAMETERS?
Contract management can be considered as a relatively new activity (IACCM founded in
1999 versus PMI founded in 1969).

As seen in A Guide to the Project Management Body of Knowledge (PMBOK® Guide) – Fifth
Edition, contract management is part of procurement management, where main activities
concern the development and administration of contracts to purchase products and services.
Contract management is cited only once in the PMBOK® Guide and is mainly considered in
the way the buyer manages his seller (PMI, 2013). This definition is in line with Wikipedia
definition, however, it is not restricted to vendor management. Contract management includes
negotiating the terms and conditions in contracts and ensuring compliance with the terms and
conditions, as well as documenting and agreeing on any changes or amendments that may
arise during its implementation or execution.

Aberdeen Group has gone a little farther with the association of contract management with
risk and profitability, while describing contract management as the process of systematically
and efficiently managing contract creation, execution, and analysis for the purpose of
maximizing financial and operational performance and minimizing risk.

Gregory Leveau, in his book on contract management (2013), brings his own definition
where contract management consists of developing and controlling the life cycle of a contract
from initialization to its termination through the systematic and methodic coordination of
resources and processes useful for risk control and financial optimization.

FUNDAMENTALS IN CONTRACT MANAGEMENT

Similar to a project, a contract has a life cycle (Exhibit 1).
Exhibit 1: Contract management life cycle (Leveau, 2014).

The main processes are the following:

- Contract awareness: consists of making an explanatory summary of the main clauses of

the contract. The added value of this summary is to interpret and make the contract explicit in
simple and intelligible terms, and make it accessible to non-jurist stakeholders

- Negotiation: this is a day-to-day activity of the contract manager which supposes an uphill
preparation, an extensive search of mutual interests, a proactive and creative mutual
approach, and the elaboration of objective criteria, as well as promoting a respectful
relationship

- Risk management: this is rather similar to project risk management, whose ultimate
artefact is the risk register with more or less the same attributes as those elaborated upon in
the PMBOK® Guide.

- Conflict resolution: this is an essential process to be mastered when the relationship

between the customer and the project becomes too emotional. Nonviolent approaches are
potential techniques to be developed here

Other useful processes may encompass:

- communication

- deliverables management

- critical data management (personal, commercial, in confidence, intellectual property, etc.)

- commercial levers

- contract closure
THE BENEFITS OF CONTRACT MANAGEMENT
FOR ORANGE BUSINESS SERVICES
The benefits of contract management for Orange Business Services can be seen from three
different perspectives.

From the customer perspective, the benefit will be to ensure the use of a professional
approach to contract management that will even better facilitated if the customer has a
contract manager as part of its project team. The contract management activities will be
explained to the customer in order to reassure him or her on the mutual benefits (win-win
ambition) expected from the approach.

From the Orange Business Services perspective, the benefits may appear even more clearly
by deriving the benefits from risk management and profitability enhancement and
providing a clear ROI on the cost versus benefit of the contract management activities. It is
also expected to bring benefits in the realm of customer relationships and ensure that, even in
case of project difficulties, the customer relationship's quality preservation is a clear target as
well as the avoidance of conflict escalation.

From the Orange Business Services’ people perspective, the benefit is to be seen in skills
enhancement and in providing tools and techniques to the project manager to better manage
projects and customer relationships. There is also the ambition to provide recognition through
an official, external certification. This brings potential career path evolution.

IMPACT ON ORANGE BUSINESS SERVICES’

PROJECT MANAGEMENT SYNERGY
METHODOLOGY
The presentation is based on further developments of the Synergy Methodology which was
introduced at the PMI® Global Congress 2015—EMEA in London (Bellec & Mead, 2015).

The main point is to try and align the respective life cycles of both the contract and the
project. When referring to Figure 1, the project life cycle is generally aligned as follows, in
Table 1:

Table 1: Alignment of project and contract life cycles.

Project Contract
5b-Renewal
Opportunity
2-Negotiation
Initiation 3-Validation
Planning 4-Execution
Executing
Monitoring and Control
Closing 5a-Closure
It should be noted that both life cycles are not strictly aligned, given the fact that most of the
project activities are performed during the execution part of the contract.

In terms of processes, a difference should be made between the technical project management
Knowledge Areas and the Leadership Knowledge Areas.

The technical processes are rather similar, given the fact that contract management may
naturally benefit from well-structured and mature processes such as: risk management,
communications, stakeholders, and so forth. The Leadership Knowledge Areas seem to be
much more emphasized in contract management. Indeed, the major goal of contract
management is to keep a constructive and valuable relationship with the customer in all
circumstances.

THE CONTRACT MANAGEMENT PROGRAMME

IMPLEMENTATION FOR ORANGE BUSINESS
SERVICES FRANCE
The contract management programme was launched within Orange Business Service at the
end of 2013. The purpose was to propose to the project management community in France, a
scalable approach for contract management skills from foundation to advanced, finally
reaching certification for project managers exposed to the most complex projects.

The achievement after nearly 30 months is the training modules design for each of the three
levels of competence and the training of more than 150 project managers in the French
project entity. At the end of 2015, a request for proposals (RFP) was launched to select a
training and certification provider in contract management based on a mix of external and
internal training programmes. It is scheduled to achieve the certification of a minimum of ten
contract managers by end 2016. The certification is open to different job roles in the
organisation such as project directors, legal advisors, risk and financial managers, and
account service managers.

In terms of lessons learnt, it might be considered to take different approaches to develop

contract management within organisations. Even if some organisations decided to position
contract management as a job role within the legal department, the choice of Orange Business
Services is not to create, at this stage, a dedicated job role, but rather to identify a mission
statement and give the possibility to different job roles as based on the required contract
manager profile, the project, and the customer profile.

It also needs to be considered that the maturity of most organisations towards contract
management is still quite low and that the maturing process may take some years in order to
be considered at the proper strategic level.

CONCLUSION
Contract management is the next challenge for most project managers, as it emphasises, not
only on traditional technical skills, but also leadership skills. The value of a contract manager
is not only seen in keeping the project economically on track, but also in its role as a key
partner to the project manager to professionally master leadership skills (PMI, 2015).
ABOUT THE AUTHORS

Martial Bellec, PMP, PgMP, is head of the project and program management center of
excellence (CoE) within Orange Business Services. As an internal PMI Registered Education
Provider, this mission consists of developing the skills of project and programme
practitioners by means of reference materials according to job roles, related training, and
certifications, as well as coaching, assessment, and auditing services. Mr. Bellec co-authored
the best-seller, PgMP® Exam Preparation. He is the vice president of the PMI France
Chapter and has volunteered and spoken at several conferences and events in France and
Europe.

Olivier Cottard, PMP, has more than 15 years of experience in project management in the
area of telecom. Today, he is heading the global project and programme management practice
within Orange Business Services for a community of more than 1,200 project and programme
managers. The mission of the project and programme management practice is to enhance the
skills and competence of the community, to provide best-in-class project management tools
to allow increased efficiency and performance, as well as customer satisfaction, and to
capitalise on knowledge and best practices through various transversal communication
initiative

CONNECT WITH US!

Martial Bellec
 Olivier Cottard

|
Business Services

|
projectmanagement.com
martialbellec

REFERENCES

Bellec, M., & Mead, R. (2015, May). Using PMI standards to create and industry-leading
methodology in a global organisation. PMI Global Congress 2015—EMEA, London, UK.

Leveau, G. (2013). La pratique du contract management. Paris, France: Gualino-Lextenso

éd.

Project Management Institute. (2013). A guide to the project management body of knowledge
(PMBOK® guide) – Fifth edition. Newtown Square, PA: Author.

Project Management Institute. (2015). PMI Talent Triangle™. Retrieved from

http://www.pmi.org.

This material has been reproduced with the permission of the copyright owner.
Unauthorized reproduction of this material is strictly prohibited. For permission to
reproduce this material, please contact PMI or any listed author.

© 2016, Martial Bellec and Olivier Cottard

Originally published as part of the 2016 PMI® Global Congress Proceedings –
Barcelona, Spain