The Sales Cycle

A common “pain point” within many sales organizations is sales contract work flow.

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.

Per Goldman Sachs, the average Global 1000 corporation maintains between 20,000 and 40,000 active contracts. Per Wikapedia, approximately 75% of companies use manual contract management processes and 25% use some form of contract management software.

Contract management software (also referred to as proposal management software) is specifically designed to resolve contract workflow issues. These solutions can minimize bottlenecks, shorten the contract cycle, improve contract compliance and bring users visibility into the entire contract lifecycle.

Ultimately, contract management software should help sales teams close more sales. In fact, The Aberdeen Group recently reported that companies who automate the sales contract process see a 15% better team attainment of sales quota.

Most contract management solutions address these five elements of the process:

1. Proposal Creation and Version Control: Instead of creating every contract from scratch, salespeople can choose from pre-approved templates with easy to use drop downs for pricing, products and terms. Many programs integrate with Microsoft Word, so the user interface is intuitive with common formatting and creative options. As proposals or contracts have changes made, the software tracks, who what and when.
2. Proposal Approval: Many sales organizations rely on email to route contracts throughout the company for approval, which is a clunky, slow process. Contract management software can automatically route contracts to the right approvers, in the correct order. Approvers receive notifications when a contract is waiting in their queue and can make edits and/or approvals, via an electronic signature, with only one or two clicks. (Per Wikapedia, a typical sales organization takes 20 to 30 days, on average, to create, negotiate, and finalize a contract.)
3. Contract Visibility: Most software packages house all contract documents in a central, online repository, so they can be retrieved “on-demand”. Users have insight into the location of the contract in the approval process and can receive automatic notifications, as contract milestones are achieved.
4. Renewal Management: Contract software can bring increased visibility and proactive notifications about contracts ready to expire or ready for renewals, thereby focusing your sales team’s attention on the most lucrative opportunities.
5. Reporting: Users can monitor key metrics such as the average number of contract changes, contract lifecycle days and the percentage of contracts converted to orders.

Many contract management systems integrate with your sales CRM system, such as the Apptus Sales Solution Suite, which is part of Salesforce.com’s app-exchange. Other solutions include Ariba Contract Management, Emptoris and Selectica.

Is sales contract management one of your pain points? Has your sales org tried contract management software? Please add comments…