When Is Finance IT Contract Management Governance Needed?

IT Contract Management is a discipline designed to streamline the entire tracking process
from start to completion. It is designed to reduce total costs and increase margins. A
contract is an agreement between two parties which is legally binding. Stipulated in the
contract are the terms and conditions which both parties should accept before they sign and
be bound by the contract. Contract management is the management of contracts made with
customers, partners, employees and vendors. It is the systematic and efficient management
of contract agreement, execution and analysis with an objective of maximizing financial and
operational performance.

With IT Contract Management, the management of volume of paper works has become manageable.
Contract management application tools now exist and were designed to reduce the cost of
contract management. Financing IT Contract Management is one major concern of a business
entity. In the year 2006, corporate users were said to have spent as much as $496 million
on contract management applications and is projected to reach $720 million this year. IT
related contracts include Disaster – Recovery contract, hardware lease contract, and other
renewals, consolidation and many more. These types of contracts really cost money. An
answer to this is a software which allows storage of the contract details such as contract
value; the name of agreement; owner; contract length; and other supporting documents. The
system should allow the company to monitor contracts from start to finish and do necessary
renewal as needed.

It is expected that business entities will eventually consider the use of contract
management applications for functionality and to stay within budget.