Even before any work gets done on your construction project, there are more pressing matters that you need to focus on.
One of the most crucial components of the construction process is the contract. All parties involved should collaborate and agree to whatever is stipulated in this document. It binds them legally, and they’re obligated to fulfill their end of the agreement, whether it’s delivering a service, producing and providing materials, or fulfilling the payment. And as the industry shifts to incorporate the latest innovations in technology, so does the contract management process.
With different online tech, contract management has become increasingly collaborative. This is why every construction professional should be aware of these new practices and methods so that they can adapt to the changing legal landscape and ensure that their work is protected.
Before subscribing to any construction management technology, you should first review your current process and see how you can improve it. Take note of the pain points, and what you think should be done to address them. One example is to ask yourself how long it should take your company to work on and finalize a contract. Will this process involve just a handful of C-suite personnel or a whole team? Will you be using pre approved templates and clauses, or start from the ground up?
Just from these questions alone, you can already see which aspects you need to work on in terms of contract management. You can automate the process, complete with various elements like roles, permissions, and security, as well as alerts that could ensure everyone involved to stick to the process. Auditing automated contract management can be done in real-time, so any corrective measures can be taken whenever needed.
If this is not enough to convince you to adapt to the modern innovations for your construction contract, here’s a detailed discussion of how tech eases contract management further.
Handling Multiple Contracts with Ease
If you need only one reason to adopt new tech for construction contract management, that would be the ability to handle multiple contracts with ease.
Imagine this: your business is booming, with prospective clients coming in on a regular basis. However, you can only focus on a handful of contracts, else, you’ll have difficulty tracking and managing them. Even with excellent service, a mismanaged contract can easily spell the end for your company. With the capability to handle multiple contracts with ease, you’re not only providing the service level you want to maintain, but you’re also opening doors to more fruitful partnerships, as well as opportunities to expand and grow your business further.
A typical construction company would have a dedicated department to handle writing contracts and following whatever contracting procedures they have in place. However, there are a lot more companies with a less defined structure, so they struggle with implementing a standard contracting process.
With proper tools, like a contract management application, you can easily create a construction contract template that can guarantee a consistent contract creation process, perhaps with the guidance of their legal department. This streamlines contract creation, drastically reducing the creation time from days or weeks to just a couple of hours. This instills a set of rules so that each of the contracts created follow a workflow that adheres to the company’s conduct.
It cuts down the time needed for repeatedly reviewing each section of the contract, so you can only focus on parts that are unique to every client.
Visibility Across Departments
Another way that technology eases the management of construction contracts is it promotes visibility across different departments.
In most construction companies, different departments or teams would use similar suppliers such as manpower, transportation, sourcing, and more. It is a common scenario where one department has established a contract, while others lack access to it, and they end up creating an additional copy of the said contract. This exposes your company to risks of contracts getting lost or misrepresented.
Technology solves this problem by making contracts and other important documents available to those who need them. Contract management apps can be shared to those who need them. This increases the usage and adherence since they can easily be searched and accessed on any device, filtered by types of construction contracts, name of the company, and more.
Easy, Convenient Tracking of Metrics
If you have certain metrics in the contract that should be monitored regularly, you can do so with the help of a contract management solution. Standard construction contracts measure or track automatic renewal dates, contract tolerances like spend amounts, limit quantities, pricing, and many more.
With these contract management tools, you can track contract approval and signature authority. This way, you can check who signs what, who’s in charge of reviewing, or who’s responsible for the contract stalling. And since it’s made available and accessible to multiple departments, you can also check the access requests, views, downloads, and many more.
These are some of the most basic elements that you can track, which would be next to impossible to do on the traditional pen-and-paper one. Procore Technologies, for example, can help you manage your construction budgets easily, thanks to efficient tracking.
It may seem glaringly obvious, but it’s important to mention that technology can really improve contract compliance.
Since everyone involved needs to access the contract, they can check it anytime they need, wherever they may be. This is crucial with on-the-fly decision making, especially if there’s a possibility that an action or decision can violate any agreement. Imagine all the problems and headaches that you can avoid simply because you have a very modern contract available all the time.
Accountability for Work Quality
Another way that technology can ease contract management is it promotes personal responsibility for the boots on the ground, especially those in the position of power and control. Such applications make the signing officers personally responsible for maintaining internal controls.
It holds them personally accountable for any errors, misstatements, and other problems. It requires continuous monitoring and reassessment of risks and controls to address any loopholes. If they fail to comply, signing officers can be punished with harsh financial penalties or even face criminal charges.
With technology, a construction company can have better internal controls. Picture this: a contract management application provides a single database for all the contracts, so uploading, searching, and retrieval with a couple clicks. It is easier to make process changes, and it is also easy to audit any processes, thanks to an audit log or change log, showing what changes were made and who made them.
Overall, with technology easing your construction contract management burden, you’ll have a competitive edge over other companies.
You have security, convenience, and ease-of-use on your side. You can focus more on providing a better service instead of worrying about contracts and adhering to them. You can stay on budget, maximize your resources, and see all your efforts pay off thanks to applying tech to manage your contracts.
Your company’s proactive management of the creation, execution and analyses of its contracts significantly boosts your financial and operational performance while eliminating future headaches.