Effective Allocation of Resources Using Contract Management System
Resource allocation in construction management
In the world of economics, the term ‘opportunity cost’ arises from the scarce nature of resources. Any form of resource on this planet is not infinite, thereby making resource management an important part of an economy. The construction industry is no exception. Ineffective management of resources is unacceptable due to the opportunity cost that surmounts, and the economic loss incurred followed by realizing actual loss in form of time and cost.
After the Letter of Award is presented, the parties are expected to get on an agreement to carry out the works or services as agreed upon. Contracts are one of the earliest documents that both parties get involved in, that form the basis of the works carried out. The nature of contracts with each stakeholder varies with a high degree of uncertainty. It is in both the parties’ best interest to honor everything agreed upon in the document. This makes Contracts Management one of the key aspects of construction that has its presence all throughout the lifecycle of the project.
The need for a Contracts Management System
Managing contracts involve collaboration and coordination between multiple stakeholders. This process when done without a digital environment requires dozens of resources to carry out the tasks which have no form of efficiency in the process. For example, the speed and efficiency of the project team related to the processing of RFIs should be monitored by an appropriate member of the project team (perhaps an RFI Coordinator) or, in some cases, the owner’s project manager, design professional, or construction manager. In a digital environment, the response can take up to 1 day on average whereas, it could take 4-7 days without the presence of a digital environment.
The number of people(resources) that work on the assigned RFI moves around inefficiently for a work that can be simplified into a single day. This is the power of a Contract Management System.
Similarly, developing and monitoring the subcontractor and supply agreement process will become a breeze of a task as the digital environment enables the owner to communicate with the desired stakeholder for any sort of change management. Contracts management involves change management at any point and stage of the project. Change orders that arise due to inefficient planning are one main reason that adds to the dynamic nature of the construction projects. Managing change orders according to the terms of the contract is of utmost importance as these orders can eat away at the profits of the organization when it is managed inefficiently.
Benefits of a Contract Management System
A Contracts Management System enables providing clear and timely feedback to direct stakeholders on the correspondence related to the bespoke contract. Contractual Correspondence count into the large volume of everyday conversations happening between various stakeholders. When this process is carried out in a digital space, there is real-time updating of data that can be visible to people on all rungs of the organization ladder. This level of visibility of information, on a real-time basis, was not possible ever before and when matched with the visualization of data with intuitive dashboards, the management system reaches a new level of ease and clarity in carrying out the effective allocation of resources. The Contracts Management system mainly presents a load of actionable data that will require acting rationally from the data visible in order to save or use resources effectively.
The Contract Management System helps in
Centralizing your Contract correspondence repository
Reduce Contract risk through the ability to quickly manage change orders
Drives alignment across the team
Relatively faster Contract Execution
Ensure effective contract compliance
Secure storage space for important classified documents and conversations
Relieving multiple points of contact for contract terms
Tracecost helps to solve the complex construction process of correspondence by delivering a comprehensive CMS (Contract Management System) module solution that allows access to unlimited projects and unlimited users within a defined organization. The module allows correspondence with stakeholders, external to the organization, as well as inside. All the correspondence is stored in a secured registry that can be accessed across multiple levels of the organization. Dashboards also present actionable insights for the top management of the organization and help in bringing a common data environment for the management.