Contracts: Speeding Across The Finish Line (It’s Possible!)

Rob Mihalko

Contracts: Speeding Across The Finish Line (It’s Possible!)Closing a sales deal is a lot like closing on a house: everyone is excited when the handshake seals the buyer’s and seller’s intent…but then the contract process begins. Exhaustive requirements need to be met, reams of paper move back and forth, and so many parties get involved. By the time the ink is dry on the contract, nerves are shot and everyone heaves a sigh of relief.

But, unlike the real estate world, if you are a company whose offerings require customer contracts, you have options. You can actually make the contracting process fast, efficient, and believe it or not, pretty painless by using an online business network.

A Business Network Speeds the Process

Managing contracts is not just a molasses-like process that consumes an inordinate amount of resources. Slow-moving contracts delay revenue flow, too. So, for every company that sells a product or service that requires a contract, automating the sales contract process is a powerful “secret weapon” that can speed deals across the finish line.

Just like an online business network helps you to detect buying signals (and thus proactively serve your customers), using an online network for contract management makes it easier to manage your customer relationships and grow revenues. Here’s why:

  • Efficiency: Paper-based, manual processes can add weeks to a contract’s turnaround time. Managing contracts on a business network provides templates and tools to help standardize contract creation, while rule- and role-based workflow and electronic signature tools speed approval cycles. And, very importantly, you will be alerted when contracts are due to expire—reminding you of revenue opportunities, and protecting you from exposure to business risk.
  • Complete Visibility: Using a business network for contract management means that all parties (both you and your customer) have full visibility into the contract status, and who’s doing what. You can see who’s proposing changes and if the changes are approved. This granular level of visibility instantly lets you know what steps remain to get you closer to the finish line.
  • Compliance and Auditability: Your contracts’ compliance with company rules is extremely important. Using a business network to manage contracts when your customer is buying from you (based on your negotiated contract) can ensure that all aspects of your contract, from product quantities and prices, to delivery and payment terms, are in compliance, and each step in a contract’s development can be readily audited. A business network also provides a central repository of “organizational memory,” rather than relying on individuals in contracting and legal departments to become stewards of contract knowledge.

Bottom-line Impact

Organizations that use online business networks to automate sales contract management already know this. Right now, they are on their way to achieving a 5% to 7% boost in revenues[1] through:

  • Up to a 50% reduction in contract negotiation cycle times
  • A 25% improvement in contract renewal rates
  • Up to 30% reduction in administrative contracting costs.[2]

By automating contract management your organization, too, can see this important function as a powerful sales accelerator. But, unfortunately for us homeowners, there doesn’t seem to be an end in sight for the paper chase.

How has online contract management improved deal closure and customer satisfaction at your organization? Let me know by commenting below.

NEXT POST: Next up, I’ll be blogging about a question that every seller ponders: How can I win this RFP?

[1] Source: International Association of Contracting and Commercial Management

(IACCM), 2011

[2] Source: Aberdeen Group, 2008, 2005