Top-performing companies in a wide range of industries are replacing cumbersome and inefficient paper-based contract management with contract management software, which integrates all contract-related information in one place, where it can be readily accessed and easily analyzed.
This aggregation allows a business to automate contract creation and administration, shorten the contract cycle time, better track compliance, and reduce paper-related costs (e.g., the paper itself, storage), leading to maximized profit in all stages of the contracting process.
And one of the most important of those stages is sales, where contracts are initiated.
Paper Doesn’t Cut It Anymore
The traditional paper-based method of integrating the sales stage with contract management has been far from ideal, or in many cases, virtually nonexistent.
As Marci Reynolds explains in her informative blog on sales operations, the hassles of any paper-based system: “After creating a sales contract from scratch, sales people spend their time chasing after finance, legal and others, to get approvals and signatures. The contracts often go back and forth for editing, and the entire process can take days or even weeks. We are an impatient society with a ‘need for speed’ and these delays often lead to lost sales.”
It’s wrong to blame the salespeople. Their talent is building relationships and convincing people of the value of their company’s products and services – not dealing with contracts.
“It is more than likely that the sales force is neither trained nor well suited to handle the detailed administrative tasks necessary to effectively monitor multiple contracts,” says Mark Smith in “Five Myths of Contract Management” on the Supply&Demand-Chain Executive website: “And, even if the sales force is willing to take on this new responsibility, without a centralized, systematic way to monitor contract data, even the most diligent sales person or any other person charged with managing contracts can miss a key date, thus costing the firm funds and damaging its reputation.”
Quality contract management software is designed to integrate the sales process with contract management in a way that prevents such missteps form occurring.
Automation and Information Access Makes Selling Easier
But contract management software isn’t just about preventing mistakes by salespeople in the field. It’s also about proactively working to close sales. Customers are usually quite impressed when a salesperson can almost instantly provide accurate quotes, contract terms, and other information important to reaching an agreement. That promptness and professionalism helps convince customers to buy.
Customer management software also leads to more sales by increasing repeat business. This is due to features such as automated reminders of renewal dates and other important milestones – not to mention by the increased time salespeople have to focus on customer relationships rather than manually dealing with contract paperwork.
“Ultimately, contract management software should help sales teams close more sales,” Reynolds says. “In fact, The Aberdeen Group recently reported that companies who automate the sales contract process see a 15% better team attainment of sales quota.”
This closing of sales isn’t just important for companies for which selling is paramount. For example, consider a healthcare contract management system. The obvious benefits will be for management of procurement contracts (e.g., supplies, equipment), but hospital contract management software can also provide hospital sales reps with immediate access to contract templates, contract-performance data, and other tools to negotiate terms and close deals with healthcare providers and managed care networks, as well as to make sales of occupational therapy services, used medical equipment, etc.
Takeaway
In almost any industry, there’s a strong financial incentive to use improved contract management to help drive sales, and there’s no sense in not taking advantage of this technological opportunity.