Daan Marktman, the Vice President of Sales at a reputable chain of stores across many European countries, was utterly zoned out while attending his monthly board meeting. Despite an impressive deal funnel filled with new opportunities, his analyst had shown Daan the previous day that they lost many opportunities and deals in the later stages of the cycle last quarter. Daan instinctively understood this was due to inefficient collaboration between the legal department and sales, several outdated contracts going out riddled with mistakes, and an overall lack of contract management processes. While sitting in that boardroom, Daan understood things had to change, but he did not yet know how all his problems tied together.
While fictional, this situation is not an unusual one. According to Gartner, the typical buying group for a complex B2B solution consists of six to ten decision-makers, each equipped with four or five pieces of relevant information. In a complex and fluid environment, any new information can significantly impact the dynamics of a deal.
To assist sales teams in this regard, we have compiled a list of five clear signals indicating that a contract management solution may be necessary to expedite deals and optimize the sales process.
1. Your team works with relatively customised contracts
Sales teams must customise contracts in an enterprise deal based on the deal’s requirements. For instance, software companies frequently provide various terms, discounts, and service-delivery conditions for each new transaction. Word and Google Docs allow for too many modifications, leading to errors and mistakes you must manually fix. Therefore, creating the final version of your contracts takes a lot of work, effort, and ad-hoc communication.
Contract automation software can drastically limit room for error, and the right solution offers the perfect balance of locked and customisable content. So, it’s time to explore suitable Contract Lifecycle Management (CLM) solutions if you repeatedly draft customised contracts for new deals.
2. Cross-departmental collaboration
Cross-departmental collaboration is a requisite of a long sales cycle but one that inherently slows down the deal flow. Writing and assessing a contract proposal requires the cooperation and involvement of several departments. Whether you can effectively coordinate these procedures across departments will determine how quickly you can provide a contract ready for signature to your clients.
CLM systems provide a centralised location for all phases of the process and capabilities for teamwork on the same platform. Hence, if you have more than one person coordinating across departments to finalise new contracts, it’s time to move to a proper contract automation tool.
3. Your competitor’s contract turnaround is faster
Another indication that you might want to adopt CLM software is that your competitors have a faster process of getting the contract proposals to the prospect. What’s their secret? They use contract automation software to reduce their overall contract turnaround time.
The average company’s contract review turnaround time adds 10% additional time (6.5 days) to introduce a new product, resulting in $7 million in revenue losses, according to 100 corporate legal departments polled by Gartner. Therefore, it’s an indication to update your contract management process if your rivals turn up contracts more quickly than you do.
4. Your company sells maintenance or ongoing service
Any internal stakeholders must know (or at least have access to) all client-specific agreements stated in the contract if you provide continuing service or maintenance. The delivery team, for instance, must determine precisely how many consultation hours were sold under which circumstances.
Or, if significant issues develop, the customer success manager would demand to see the support response times you promised. Additionally, you have someone in charge of the procurement function. In that case, they should keep a close eye on client-specific criteria, including SLAs, reporting specifications, and conditions, and maintain an overview of all triggers in the running contracts.
5. Your sales team is caught between a rock and a hard place
If your sales staff emails back and forth constantly with Word documents to get everyone’s feedback, it’s a leading indicator that things should change. There’s no scalable way to manage contracts without CLM if they need to negotiate deals internally and with clients individually. With software that supports the whole workflow, it is possible to manage internal and external stakeholders.
If contracts are not centralised on shared storage, it often results in different versions. Also, there needs to be more transparency about who changed what in Word. Think of it from a stakeholder perspective. Negotiations inherently mean different results. Legal always needs to give the green light for pricing or compliance differences, whereas sales want to get to the dotted line as soon as possible. A tool where all parties can see the agreements in real time before signing will keep all stakeholders in the loop.
The Signs are Clear
Sales keep a company afloat, and sales teams need management support to crush their quotas. Don’t make them negotiate deals over email or text. We’ve listed five essential signals that indicate whether or not you should adopt contract management software. This article can help convince your team that it’s time for a digitalised and modern contract management process. Would you like to hear more about how Docfield can help your sales team use contract management software to increase revenue and save time?