Managing IT contracts is sensitive business. Typically, corporate relationships and large sums of money are on the line. One Western Australian public servant recently learned the pitfalls of poor contract management the hard way. The employee overspent $40 million dollars on an IT contract in the healthcare industry. Similarly, Serco, a private security firm, found itself on the receiving end of over $68 million dollars in fines as a result of contract errors. And NHS Partners, a clinical services provider, found themselves out $1.2 billion dollars due to poor contract management.
As those examples reinforce, the effects of mismanaged contracts adds up from legal fees and costing businesses large sums of money that they don't need to lose. Russ Edelman, CEO of Corridor Company, a company dedicated to contract management technology, says he's seen a trend where businesses find themselves far behind in modernizing the contract process, but he notes that it's a fixable problem with the right technology, budgets and staffing. It's not only about upgrading the systems and process you have in place, but also ensuring all your employees are invested in proper contract management and understand the implications.
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