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The State of Sales Contract Management

Views: 2911 Published: 12 Apr 2011 Average Rating: unrated Print
 

For many sales people, 'getting to yes' with the customer is only half the battle. Coping with the inefficiencies of their own organization can be almost as challenging – and this is frequently the case with the contracting process, where complicated rules and limited visibility can undermine Sales productivity and threaten business controls and financial performance.

At a time of heightened market uncertainty and increased business complexity, the negotiation and management of contracts gains increased attention. This report offers an insight to the state of sales contracting, drawing from input by more than 250 large corporations to explain the issues and describe the benefits that flow from process improvement. While the study provides a holistic overview, it has also yielded the first authoritative, independent insight to the value of defining and automating the contract management process and integrating with the customer relationship management (CRM) environment.

The independent research was led by the International Association for Contract and Commercial Management, with support from Selling Power, an association for sales and marketing professionals, and sponsorship by Ariba, the leading provider of collaborative business commerce solutions and salesforce.com, the foremost organization in enterprise cloud computing.
Among the findings are:

  • The rules and bureaucracy of the contracting process frequently present a barrier to closing business and weaknesses in on-going contract management are a source of lost revenue, missed opportunities and dissatisfied customers.
  • Only one third of sales people feel that the contracting process is effective at maximizing value, minimizing risk and assisting in the formation of strategic customer relationships.
  • For those charged with producing or managing contracts, Sales are poor at internal communication, lacking in relevant skills and guilty of setting unrealistic customer expectations, resulting in increased claims and eroding customer loyalty.
  • Integrated sales process automation has a consistently beneficial effect on the quality and integrity of the process, yielding substantial increases in the satisfaction of all internal business groups.


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