It is common for leaders to be hesitant to manage risks internally or to outsource. Check out the advantages of having a company specialized in risk management in contract maintenance. A risk management it is a fundamental step for the long-term sustainability of a business. The process that seeks to identify and protect against potential threats ensures that directors and managers can move forward with their plans, without having to worry about unforeseen obstacles. In view of the recognized importance, risk management raises a question: is it better to carry out this management internally or to hire an external company?
Without a doubt, when delegating to risk management when maintaining contracts for an internal team, the leadership ends up creating a false impression that they will be closer to the process and will be able to better control the flow of activities. However, this is a fallacy, as rarely can professionals who already have their own activities be able to effectively reconcile risk management.
Another problem: a lack of risk management experience may result in several undetected threats. Therefore, it is essential to have the knowledge to apply the project of risk management , with already specialized professionals and experience in the activity.
Thus, it is understood that one of the main reasons for hiring a company for risk management contract maintenance means being able to rely on proven experience in the role. Having specialized professionals will also ensure quick support in resolving questions that arise during risk management. Consultants may use their prior knowledge to answer the contractor's questions.
Risk management and the regulatory environment Each market segment has its own regulatory considerations and current aspects that cannot be ignored, both for the legal issue and for the very safety of the business and its employees. The great difficulty is that these regulations change periodically, either more sporadically or often. Again, rely on an external company for risk management in contract maintenance is the most recommended. Consultants will be able to follow regulatory changes more closely, using their expertise to see contextually and anticipate possible consequences.
Understand the advantages of risk management in maintaining contracts so that your business can grow protected from potential threats To undertake is to be in contact with the market at all times. The entrepreneur must be aware of all the flows of activities inherent to the business: organization and adjustment of accounting and financial processes, production of the product or service, employee safety, sales strategies, among others. Therefore, it is essential that every administrator has tools that can help them in a practical and effective way.
Among the main services that help entrepreneurs, Risk management is one of those with the most potential to assist in business growth. It is through the risk management in contract maintenance that the administrator will be able to view potential threats and hidden traps.
A question may arise in the entrepreneur's mind:”my company isn't big. Do I really need one risk management in maintaining contracts”? It is common for inexperienced managers to neglect important strategies, realizing the error only in the medium-term future.
In fact, the Risk management is important for businesses of various sizes , regardless of the sector of activity or revenue. The risk management culture is preventive, so it must be done in advance.
A Risk management works in different areas of a company . Some examples relate to financial, operational, and even legislative activities (compliance ). Note that they are three fundamental pillars for any company. Neglecting risks in any of these segments makes it possible for major problems to occur in the future.
The services of risk management can be carried out with methodology, assessment and effectiveness, and a team with high technical capacity is important to ascertain all potential risks to a company. Your support to entrepreneurs ensures that they understand all processes and acquires a macro view of risk management related to their activities. Possible failures in the financial, operational, or areas of compliance may be corrected and prevented in advance.
The business benefit appears in different forms: company protection, employee safety, greater effectiveness in creating the product or service provision, time savings and better use of financial resources.
The importance of risk management in maintaining contracts Use techniques of risk management maintaining contracts is essential to keep your business safe and growing sustainably. Every negotiation needs a contract. It is a security for both the customer and the service provider.
Because of this importance, there can always be questions for drafting a contract . It is necessary to raise important points, such as the characteristic of the service, object, methodology, delivery/completion deadlines, amounts, withdrawal clauses, labor clauses, and others.
What many entrepreneurs don't know is that they can count on projects of risk management in contract maintenance, where an expert verifies and indicates the processes that can be improved, further guaranteeing the company's profits and security.
And what can be seen in a contract from the point of view of risk management ? Currently, risk management in contract management is considered a strategic factor in business, focusing on the volume of resources, especially financial resources, good risk management, seen as a way of anticipating that risks occur and serve as a preventive factor and reduce losses in companies.
The function of risk management contract maintenance is seen as an activity that ensures and combines the organization and synergy of contract management processes with all departments of a company. Its objectives are efficiency in obtaining the right materials and services, the correct quantities, the timely deliveries and the most advantageous prices and in the provision of quality services.
The process of risk management in the maintenance of contracts, be it of any type, it is defined by the following sub-processes:
Development and maintenance of suppliers. Identification of the need for hiring. Selection of the vendor/contractor. Definition of Criteria for Creating a Contractual Link. Identification and Framework of Contractual Transactions. Contract Management. Execution of the follow-up of contracts. Reception and SLA of contracts An experienced entrepreneur knows the importance of contracts for your business, whether with clients or suppliers or partners. Therefore, it is necessary Minimize risks and Increase opportunities .
In relation to contracts, specialists carry out the identification and analysis of risks, a diagnosis of the processes carried out to manage contracts concluded with clients or suppliers or partners, seeking to identify opportunities for improvement , including inventory, review of adopted standard models, standards and procedures, support tools, periodic monitoring, and performance indicators.
But there are some important considerations for risk management in the maintenance of contracts. When a contract is developed, it is necessary to take into account many aspects that must be framed in a risk management . These are elements such as planning, ownership and title, design, construction, measurement and approval (product and/or service), price and payment, liability and insurance, legal aspects and compliance.
The project of risk management when maintaining contracts, you must consider adversities and problems involving the business, whether in the use of the product/service by the customer or in the supply provided by third parties. It is not recommended to have a supplier that does not have contingency plans in relation to their own processes. When every chain has a risk management project, the processes become faster and clearer for all parties .
For a good risk management In the maintenance of contracts, every entrepreneur should note the following potential risks:
Ineffective planning and/or absence of criteria for stipulating contracts. Analysis and drafting of contracts by areas without technical skills. Establishment of contracts that do not guarantee the Company's rights. Strategic operations carried out without the contractual formalization between the parties. Contracts not consistent with the Company's objectives and/or strategies. Non-compliance with the contractual terms agreed between the parties. Decision-making based on incorrect, incomplete, outdated, or non-existent information. A risk management when maintaining contracts, it already foresees adverse scenarios in the future, protecting the business against problems. On the other hand, the absence of a well-structured contract opens up possibilities for lawsuits and legal disputes. In addition to the setback itself, the disorder also involves legal expenses, waste of team time and possible risks to the brand's image. That way, The value of risk management in contracts is intangible , exceeding its initial cost and offering a long-term solution.
With the implementation of risk management In the maintenance of contracts companies, with greater ease, will be able to manage their contracts and will automatically have the following benefits:
Effective planning for stipulating contracts. Continuous improvement of processes Reduce risks Increase efficiency Raise the level of governance Optimize human and technical resources in management Standardization of processes, easier knowledge transfer Better monitoring of vendors' service levels. Execution of the services established in the contract. Accountability of expenses compatible with what was agreed. Comparison between the amounts charged and those expected. Existence of suppliers providing services after the contract expires. Periodic reassessment of service costs based on market reality. Greater agility in identifying problems and in the decision-making process through key performance indicators. Best practices used for risk management when maintaining contracts TATICCA uses methodology developed by risk management in maintaining contracts based on the premises of COSO II — ERM (Committee of Sponsoring Organizations) and Corporate Governance Practices issued by IBGC — Brazilian Institute of Corporate Governance.
Our objective is to advise our clients on the establishment of best market practices in risk management, mapping and improvement of processes in good contract management, in the better definition of responsibilities, definition of criteria, and basic procedures related to the formalization of contractions and their terminations (contracts, amendments, terminations, and contractual distractions).
Dynamic business environment, globalization, technology and sustainability Each day, the risk management in contract maintenance plays a fundamental role in the contemporary business scene and is an essential practice for organizations of all sizes and sectors. The business environment is constantly evolving, with rapid and unpredictable changes. A risk management allows organizations to be prepared to face emerging challenges and seize opportunities, promoting adaptability and resilience.
In addition, more companies operate in a global context, which increases the complexity and variety of risks to which they are exposed. A risk management in contract maintenance helps identify threats that may arise from different parts of the world, also considering the interconnections between suppliers, customers, and partners.
With increasing reliance on technology, cyber risks have also become a significant threat. A risk management in contract maintenance helps protect against cyberattacks, data leaks, and other vulnerabilities related to information technology.
A company's reputation is a valuable asset. A risk management in contract maintenance helps to avoid adverse events that may negatively impact the organization's reputation, ensuring ethical practices, regulatory compliance and social responsibility, essential elements for long-term sustainability.
A risk management in contract maintenance it is essential today to ensure the survival and sustainable success of organizations in an increasingly challenging and complex business environment. It not only protects against financial losses, but also promotes a resilient and innovation-oriented organizational culture.
TATICCA is recognized for its quality in the areas of risk management , auditing, accounting, and others. Our specialists have a high technical level of knowledge in contract risk management projects and offer solutions for the entrepreneur's business, evaluating, analyzing, and pointing out resolutions, in addition to accompanying the administrator in case of questions or suggestions.
Get in touch with TACTIC , which provides integrated auditing, accounting, tax, corporate finance, financial advisory services, risk advisory, technology, business consulting and training, for more information, at www.taticca.com.br or e-mail taticca@taticca.com.br and learn more. Our company has professionals with extensive experience in the market and has certified methodologies for carrying out activities.
