Last updated on May 9th, 2020 at 08:44 am
Managing people and projects is never easy. But, when you also have to make sure you are meeting the requirements of a contract with another company, project management can become overwhelming.
The key to keeping these projects on time, on budget, and in full compliance with the terms of the agreement is to use contract milestone management.
What is Contract Milestone Management?
Contract milestone management is the act of dividing the overall project into smaller parts. Each part is called a milestone.
You want to make sure that each contract milestone is tied to both the successful completion of the project and to the contractual obligations laid out in the agreement.
Contract milestone management is both a project management tool and a contract management tool.
Many contracts have a variety of penalties for failure to meet all of the exact requirements of the deal. While one single penalty may not be excessive, each penalty eats into your profit.
If you are regularly incurring penalties on a variety of contracts, it can lead to huge losses. This also damages your business reputation. The most common cause of late deliveries and other problems that incur contractual penalties are the result of mistakes and poor management.
There are too many moving parts for one person to keep track of everything without help.
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Contract milestone management simplifies contract management and allows you to focus on the small steps that will ensure a timely, high-quality delivery. This technique also allows you to better forecast the resources you will need in the near future to complete the rest of the milestones.
Monitor Progress of Big Projects
Large, complex projects are difficult to monitor. It can be hard to project when future work will be completed or even how close you are to project completion.
When you use contract milestone management, you have an objective method for monitoring completion percentage and progress.
The company will know early on if they are on schedule or if they will need additional resources to speed up project completion.
It is easier to show executives and other stakeholders what milestones have been completed and what milestones remain.
When you are working with a variety of different departments, managers, and employees, it can be hard to monitor deadlines. It is easy for different parts of your organization to become confused about what deadlines they are facing.
However, with contract milestone management, everyone has a clear set of deadlines that must be met to complete the project on time.
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The biggest advantage of contract milestone management is that it improves the company workflow. By creating milestones at the outset of the project, it forces everyone to spend more time thinking about all of the work that goes into a single project. It also forces the organization to create an efficient workflow. It establishes greater accountability.
Managers can plan for their portion of the project because they will know when something is supposed to be delivered and who will be making the delivery.
Conscientious monitoring of contract milestones will lead to better contract compliance, stronger relationships between different departments, and more improved workflows.