A risk management It is a fundamental step for the long-term sustainability of a business. The process that aims to identify and protect against possible threats ensures that directors and managers can move forward with their plans, without having to worry about unforeseen obstacles. Given the recognized importance, the risk management raises a question: is it better to carry out this management internally or hire an external company?
Undoubtedly, by delegating the risk management When maintaining contracts for an internal team, 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 professionals who already have their own activities will rarely be able to effectively reconcile risk management.
Another problem: a lack of experience in risk management could result in several undetected threats. Therefore, it is essential to have the knowledge to apply the project risk management, with already specialized professionals and experience in the activity.
Therefore, it is understood that one of the main reasons for hiring a company for risk management in maintaining contracts is being able to count on proven experience in the role. Having specialized professionals will also guarantee quick support in resolving doubts that arise during risk management. Consultants will be able to draw on 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 legal reasons and for the safety of the business and its employees. The great difficulty is that such regulations change periodically, whether more sporadically or frequently. Again, relying on an external company for the risk management in contract maintenance is the most recommended. Consultants will be able to monitor regulatory changes more closely, using their expertise to see contextually and foresee possible developments.
Understand the advantages of risk management in maintaining contracts so that your business can grow protected from potential threats
Entrepreneurship means being in contact with the market all the time. The entrepreneur needs to be aware of all activity flows inherent to the business: organization and adaptation 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, the risk management is one of those that have the most potential to assist in business growth. It is through risk management in contract maintenance that the administrator will be able to view potential threats and hidden traps.
A doubt may arise in the entrepreneur's mind: "My company is not big. Do I really need one risk management in maintaining contracts”? It is common for inexperienced administrators to neglect important strategies, only realizing the error in the medium-term future.
In fact, the Risk management is important for businesses of varying sizes, irrespective of the sector of activity or revenue. The culture of risk management has a preventive character, therefore, it must be done in advance.
A risk management works in different areas of a company. Some examples are in relation to financial, operational and even legislative activities (compliance). Note that there are three fundamental pillars for any company. Neglecting risks in any of these segments is to make it possible for major problems to occur in the future.
The services of risk management they can be carried out with methodology, investigation and effectiveness and a team with high technical capacity is important to investigate all potential risks to a company. Its support for entrepreneurs ensures that they understand all processes and acquire a macro view of risk management linked to their activities. Possible failures in the financial, operational or compliance can be corrected and avoided in advance.
The benefit for the business appears in different ways: company protection, employee safety, greater effectiveness in the creation of 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 keeping your business safe and growing sustainably. Every negotiation needs a contract. It provides security for both the customer and the service provider.
Due to this importance, there may always be doubts regarding the drawing up a contract. It is necessary to raise important points, such as the characteristic of the service, object, methodology, delivery/performance deadlines, values, withdrawal clauses, labor clauses, among others.
What many entrepreneurs don't know is that they can count on risk management in contract maintenance, where a specialist checks and indicates processes that can be improved, further guaranteeing the company's gains 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 seen as a strategic factor in business, focusing on the volume of resources, especially financial ones, good risk management, seen as a way of anticipating risks occurring, serves as a preventive factor and reduces losses in companies.
The function of risk management maintaining contracts is seen as an activity that ensures and supports the organization and synergy of contract management processes with all departments of a company, with the objectives of efficiency in obtaining the right materials and services, the correct quantities, deliveries punctual and the most advantageous prices and the provision of quality services.
The process of risk management in the maintenance of contracts, be it of any type, is defined by the subprocesses below:
- Supplier development and maintenance.
- Identification of the hiring need.
- Selection of the supplier / contractor.
- Definition of Criteria for Creating a Contractual Bond.
- Identification and Framing of Contractual Operations.
- Contract management.
- Execution of the follow-up of the contracts.
- Receipt and SLA of hires
An experienced entrepreneur knows the importance of contracts for his business, whether with customers or suppliers or partners. Therefore, it is necessary minimize the riskse 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 customers or suppliers or partners, seeking to identify opportunities for improvement, including inventory, review of adopted standard models, norms and procedures, support tools, periodic monitoring and performance indicators.
But there are some important considerations for risk management in maintaining contracts. When a contract is developed, it is necessary to take into account many aspects that must be included 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 risk management When maintaining contracts, adversities and problems involving the business must be considered, 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 its own processes. When the entire chain has a risk management project, processes become faster and clearer for all parties.
For a good risk management in maintaining contracts, every entrepreneur must observe the following potential risks:
- Ineffective planning and/or lack 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 in maintaining contracts, it already foresees adversity 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 mishap itself, the inconvenience also entails 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, surpassing your initial cost and offering a long-term solution.
With the implementation of risk management in maintaining contracts Companies, with greater ease, will be able to manage their hiring and automatically have the following benefits:
- Effective planning for contract stipulation.
- 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 supplier service levels.
- Execution of the services established in the contract.
- Provision of expense accounts compatible with the agreed.
- Comparison between the amounts charged and those forecasted.
- Existence of suppliers providing services after the expiration of the contract.
- 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 in contract maintenance
TATICCA uses a 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 in the establishment of the best market practices in risk management, mapping and improvement of processes in the good management of contracts, in the better definition of responsibilities, definition of criteria, and basic procedures, related to the formalization of contracts and respective terminations (contracts, amendments, terminations, rescissions and contractual dissolutions).
Dynamic business environment, globalization, technology and sustainability
Each day, the risk management in contract maintenance plays a fundamental role in the contemporary business scenario, being 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.
Furthermore, 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 dependence on technology, cyber risks have also become a significant threat. A risk management in contract maintenance helps protect against cyber attacks, data leaks and other vulnerabilities related to information technology.
A company's reputation is a valuable asset. A risk management in contract maintenance contributes to avoiding adverse events that could 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 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.
Our specialists have a high level of technical knowledge in contract risk management projects and offer solutions for the entrepreneur's business, evaluating, analyzing and pointing out resolutions, in addition to supporting the administrator in cases of doubts or suggestions.
Please contact TATICCA, which operates with integrated auditing, accounting, tax, corporate finance, financial advisory services, risk advisory, technology, business consultancy and training, for more information, visit www.taticca.com.br or email taticca@taticca.com.br and find out more. Our company has professionals with extensive experience in the market and has certified methodologies for carrying out activities.