Don't Let Poor Contract Management Slow Sales
Sales performance drives business growth, and while most sales organizations focus on finding and closing deals, the reality is that no sale is complete until the accompanying contract has been fully negotiated and executed.
And that's where roadblocks can develop. Salespeople are assessed not only on the amount revenue they bring in, but also by how quickly, and nothing can slow down the sales cycle quite like contracts. Salespeople need contracts to be processed quicker by legal; they need to be aware of where client contracts are in the legal machinery; and they need to be able to quickly locate important information, such as the existence and wording of an NDA, that could determine how to approach a potential or existing deal.
Several factors can slow down contracts. For one, inadequate document storage sucks up invaluable time filing and retrieving documents and increases the possibility of misplacing documents. Despite the availability of advanced digital tools and resources, many businesses still keep crucial documents in filing cabinets or archived on outdated systems, making it difficult to find approved clauses and locate important documents and terms. In dealing with existing or potential clients, business leaders and sales representatives must have all relevant data at their fingertips.
Second, lawyers having to manually draft and negotiate contracts cannot keep up with the demand from sales. In-house attorneys need a tool that automates contract creation and negotiation as well as facilitates knowledge sharing so they do not have to "reinvent the wheel." A shared, collaborative, searchable clause library of low-risk or fallback terms would shave significant time off contract creation and negotiation. It would also lead to more standardization and, consequently, less unknown risk.
And this leads to the final challenge: visibility. Once salespeople pass client terms to legal for review and contract creation, they must be able to view the contract’s progression through the legal machinery. As salespeople deal most closely with the clients, they understand the clients' multilayered concerns underlying requested contract terms. Salespeople must be aware of the status of their deals and the terms requested by their counterparties. They cannot afford to lose sight of these deals once they are passed to legal.
Thankfully, technology can put salespeople back into the equation so they never lose track of their contracts and, consequently, important deals. Contract management and document automation software can be cost-effective solutions to help businesses easily and more quickly create, track, and understand these documents. Contract management technology empowers business teams to close more deals in less time by using an intuitive tool that empowers salespeople to fill in answers in an intuitive "wizard" that populates a pre-approved template.
The right contract management solution should also have these features:
It's simplified, not simplistic. Easy-to-use document assembly tools ensure the person closest to the deal is able to work on the relevant documents themselves, with limited technical or legal know-how, while ensuring lawyers can access, review, and ultimately approve all contracts. Custom templates ensure that salespeople can change only approved variables; any higher-risk entry automatically triggers legal or leadership review. Complex factors, layers of documentation, and case-by-case issues that arise over the life of a contract can be managed appropriately, generating a document that is legally sound, compliant, and accurate.
It puts contract terms at your fingertips. Contract management tools can aggregate an organization's entire contract portfolio—including key terms—in one online repository. This means a salesperson working with a client can quickly pull up all contracts related to that client or all terms related to a specific type of deal, transaction, or regulation to better understand how to move forward.
It has platform and system integration. Sophisticated integration of all internal processing and external systems is crucial for the rapid drafting and execution of contracts. Documents can be initiated in a single template, receive edits from multiple parties, and then be shared with all relevant stakeholders without compromising privacy or security. Permissions can be regulated so that parties can be provided with restricted access.
It enables signatures on the go. Not all deals are closed with a handshake. Contract management software that enables staff to execute contracts from smartphones or tablets means deals are closed easier and faster. Eliminating paper trails and unnecessary face-to-face meetings streamlines the entire process.
It enables standardized clauses. One of the most common sources of contract risk stems from niche clause phrasing. Over time, errors can easily pile up, especially without a streamlined workflow and database of common clauses for employees to reference. Robust contract management software addresses this risk by improving the organization's ability to access and manage standardized clauses for specific types of contracts.
It features reporting and data analytics. Finally, organizations must be able to monitor and measure contract terms over time. Data analytics enhances sales teams' and company executives' visibility and insight into documents that would otherwise require manual maintenance routines, saving time and improving the organization's ability to capture important insights from its contract portfolio.
The creation and execution of sophisticated sales contracts are nuanced exercises. But their inherent complexity doesn't have to limit your organization's ability to maintain highly efficient sales processes aided by cutting-edge technology. A technology-based approach to contract management insulates the sales process from roadblocks and significantly improves your ability to meet critical sales targets, creating a more reliable and dynamic revenue stream.
Terence Lee is president of the Americas at Exari—an industry-leading software company that automates and streamlines the process of creating, negotiating, and managing contracts and complex documents—where he is responsible for global sales.