The problem with old school “contract management” is that it puts the focus on managing something that already exists. You’ve got all these contracts. Manage them. Keep them somewhere safe. Pluck out the important data points and make sure you don’t miss any milestones or send invoices for the wrong amount. But this is all very back office. It may help you trim costs. It may help you manage risk. It may help you squeeze the most out of the contracts you’ve already signed. But it says nothing about the front office task of getting new contracts signed, and new revenue into your P&L. When contract management is all back office, and no front office, it is, quite simply, boring.
It doesn’t need to be that way. For many types of business, with predictable patterns of deal closing, there is a huge opportunity to accelerate the front office process of creating and closing contracts. And done properly, the top line revenue impact will dwarf any back office benefits by a huge margin.
No Bottlenecked Contracts Enables More Sales
As hockey legend Wayne Gretzky once said, you miss 100 percent of the shots you don’t take. The same applies to sell-side contracting. If you can only grind 10 contracts through your current legal and sales ops process at the end of each quarter, then 10 new contracts is your best possible outcome, no matter how many promising deals may be waiting in the wings. But if you can clear out the bottlenecks and double the flow, you’re now in with a shot of closing 20.
This is why self-service contracting is the killer app of sell-side contract management. It can empower front office business people to get far more potential deals papered during the quarter-end crunch, and this extra capacity is an absolute prerequisite to any sort of meaningful growth.
With the right tools, self-service contracts are not hard to implement:
- Legal and other experts design a set of rules that ensure sales reps can produce tailored, risk-appropriate contracts through a self-service wizard.
- Sales can now produce their own first drafts for prospective deals, and get many more potential deals into the hopper for quarter end close.
- If any Sales rep makes high risk choices during the wizard, the deal is caught and routed to Legal for closer scrutiny.
- By empowering Sales and reducing Legal bottlenecks, many businesses can double the volume of deals-in-contract-negotiation during the quarter-end crunch.
You don’t need to be a rocket scientist to see that sales teams with 20 deals “in contract negotiations” stand a better chance of closing 10 good deals each quarter, compared to those with 10 deals “in contract negotiations” (who will only close 10 if every deal goes perfectly).
Even if the average bump in deals closed per quarter is a mere 10 percent, the ROI from self-service contracts would be an extra million dollars for every $10M of annual revenue. Sure, your mileage may vary. But if you haven’t looked at what self-service contracts might mean to your business, you should.
Want more on Contract Management? Select the best contract management solution for your business by comparing the industry-leading vendors in Business-Software.com’s Top 10 Contract Management report. For additional tips and software reviews, visit the contract research page.