Managing Risks in Government Contracting

For service contract businesses with extensive warranty obligations, contract management can be a key driver of profitability.

By taking advantage of the evolution of enterprise contract management software – along with the availability of this technology on the cloud – many enterprises are achieving reduced costs, increased revenue, and greater customer satisfaction in their service contracts and warranty chain.

“Linking leadership oversight with front-line teams to manage and sell warranties/service contracts is integral to successfully servicing customers and driving the level of efficiency necessary for a profitable service organization,” concluded Aly Pinder, Jr., a senior research associate focused on the service management industry for the market research firm, Aberdeen Group.

Centralized Warranty Data

Pinder, writing about the 2012 Warranty Chain Management Conference, observed that, “Access and availability to warranty information via a centralized knowledge base are two main steps that enable improved collaboration across the organization to help lead to better products/parts, service, and eventually revenue.”

In a recent research project, Aberdeen found that 65% of top-performing enterprises stored their warranty data in a centralized location, compared to only 40% for the other companies in the Aberdeen study.

This data centralization can be accomplished using enterprise contract management software, which ensures that all data is always complete, up-to-date, integrated, secure, and easily accessible by the appropriate people.

Coordination of Ordering and Servicing

For enterprises with multiple vendors, products, and warranty policies, managing the necessary parts inventories and varied warranty terms is a complex process. Contract management software can enable enterprises to automatically manage warranty policies so that parts are always on-time to avoid service downtime, inventory costs are minimized, and customer relationships are enhanced.

Without automated contract management, mistakes can easily happen that hurt the bottom line and frustrate customers. And even without obvious missteps, disintegrated and mismanaged warranty processes can result in missed revenue opportunities, inefficient warranty service delivery, and poor customer satisfaction.

But with contract management software to regulate the warranty workflow, an enterprise’s warranty chain can function at such a high level that warranty management becomes a competitive advantage and a point of differentiation in the market.

Warranty Analytics

Another advantage of contract management software in the warranty chain is the business intelligence that can be gathered through analysis of warranty performance. Contract management software provides the capability to easily identify inefficiencies in warranty chain operations, as well as revenue opportunities.

Pinder points out that customer and product warranty data can also be highly valuable to others operational areas, such as finance, design, and manufacturing.

Customer Service

Considering warranty service only in terms of cost containment is a short-sighted approach. Top-performing enterprises realize that warranty service is critical in customer retention, and that repeat business is the lifeblood of any enterprise. Contract management software makes doing business with an enterprise easier and more reliable, and that convenience and dependability helps keep customers.

Viewed in this manner, warranty management supported by contract management software isn’t just defense- it’s offense, too. It’s a way to drive sales.


Within the warranty chain, there are significant opportunities to not only minimize costs, but also to increase revenue and maintain ongoing customer relationships. But these benefits will be almost impossible to realize without the support of enterprise contract management software to centralize data, to coordinate inventory management and warranty service, and to aid in ongoing product and service development.

Contract Management Software and Warranty Management