Introduction › Example: Asset Management › Example: How to Manage a Contract

Example: How to Manage a Contract

The following example illustrates how Document Management Company uses CA APM to meet their contractual obligations to their vendors. When Document Management Company has all of the information about their contracts, they can determine what company is associated with the contract, who negotiated the contract, the costs associated with the contract, the length of the contract, and the assets associated with the contract.

This information provides Document Management Company with the following benefits:

• Helps to reduce the cost of owning an asset.
• Helps to make better purchasing decisions.
• Helps to reduce the risk involved in purchasing assets.

To manage a contract, complete the following steps:

1. Review the legal documents in CA APM to investigate potential consolidation and savings for hardware contracts.

   The contract manager logs in to CA APM and reviews the termination fees associated with all contracts. Termination fees are one time costs that Document Management Company must pay to discontinue any hardware contract.

2. Review the contract details for the legal documents to determine which agreements offer a lower penalty.

   The contract manager reviews the contract start date, end date, cost center, location, negotiator, and original requester. This information is important to verify because contracts may have been signed many years before the current date.

3. Review the costs associated with the contract.

   The contract manager reviews the costs to verify whether the vendor is billing correctly, and to determine the total amount paid for the contract and future payments. The information can be used for budgeting and forecasting.

4. Review the status history for the contract.

   The contract manager reviews the various stages of contract review (internal and external) to determine whether important changes occurred from the time the contract was signed and executed.

5. Review the audit history of the contract.

   The contract manager reviews the audit history of the contract to see all changes, when the changes were made, and who made the changes.

6. Review the terms and conditions for the contract.

   Canceling a contract, especially a lease, can have a large financial impact on Document Management Company. All assets must be returned to the vendor and new assets must be provided to employees. The contract manager reviews the terms and conditions, and determines that it is cost prohibitive for Document Management Company to cancel the lease.

7. Review a scanned document of the original contract.

   The contract manager reviews a scanned document of the original contract to perform a thorough review of the contract.

8. Review any additions, amendments, and governing legal documents that are associated with the contract.

   The contract manager reviews any additions, amendments, governing legal documents, and other associated attachments to the contract to improve purchasing decisions.