Key Differences: Project Management and Contract Management
- Posted on Oct 4, 2023
Imagine getting promoted (or “voluntold”) to oversee your organization’s latest project. What if your boss asks you to handle a recently acquired contract, managing it from start to finish?
Do you know the differences between project management and contract management?
Every business requires two sets of skills: project management and contract management. Although they may sound similar, they serve distinct purposes and require unique skill sets — and certifications.
Let’s take a look.
Project Management
Project managers are responsible for coordinating the efforts of a diverse team to complete a project successfully. The work involves many tasks spread over a specific time, but project owners involve stakeholders at every level.
Project management involves planning, executing, monitoring, and closing projects to achieve specific objectives within a defined scope, budget, and timeline. No wonder it takes a team to bring projects to a successful conclusion!
The primary goal of project management is to deliver a unique product, service, or result, from developing a new software application to constructing a building.
The project management aspect focuses on the entire project lifecycle, from initiation to closure. It involves defining project objectives, planning tasks, assigning roles, monitoring progress, and ensuring project completion. Imagine a software development project aiming to create a new mobile app. The project manager would define the project scope, allocate resources, set milestones, and ensure the app’s delivery within the specified time frame and budget.
Project managers typically obtain certifications such as Project Management Professional (PMP) or Certified ScrumMaster (CSM) to enhance their skills and credibility. These certifications validate their ability to manage projects effectively.
Contract Management
On the other hand, contract management deals with the administration and oversight of contracts between two parties, such as a company and its vendors, clients, or suppliers.
Contract managers ensure that contracts are executed properly and that all parties meet their obligations. Here are some critical aspects of contract management:
Contract management ensures that all parties involved fulfill their commitments and that the contract’s terms and conditions are followed.
Primarily concerned with legal and contractual aspects, contract management centers around the management of contracts, including drafting, negotiation, execution, monitoring, and compliance. It is
For example, suppose a company contracts with a vendor to supply raw materials. The contract manager’s role would involve:
- Monitoring the vendor’s performance.
- Ensuring timely deliveries.
- Handling any disputes or changes in the contract terms.
Contract managers often seek certifications such as Certified Commercial Contracts Manager (CCCM) or Certified Professional Contracts Manager (CPCM) to demonstrate their contract administration and negotiation expertise. They do not need a legal background.
Training Today for Tomorrow
Project managers are in great demand, and projections indicate a need for 25 million project managers worldwide by 2030 — in addition to current numbers. Likewise, contract managers are integral to daily business operations.
One of the best ways to prepare for these exciting roles is to train now for the skills you need tomorrow. Take advantage of employee training programs that teach management basics and leadership skills, and you may discover how much you enjoy the teamwork and collaboration of project management or the attention to detail required for contract management.
In Summary
Project management and contract management are two distinct but interrelated functions within business and project execution. Project management focuses on delivering specific project outcomes, while contract management ensures that contractual agreements are upheld. The skills and certifications required for each role reflect their unique responsibilities and objectives.
Understanding these differences is crucial for individuals aspiring to excel in either field, as it allows them to develop the right skill set and pursue the appropriate certifications to thrive in their chosen career path.