Contracts are at the very heart of commerce – they often govern each and every dollar that comes in or goes out of an organization. And yet, using contract processes that are highly inefficient remains one of a business’ most common challenges.
By automating the contract lifecycle, a business can shorten the amount of time it takes to see revenue. In fact, according to the Aberdeen Group, 62% of companies have some formal contract management solution in place, which has resulted in:
- Less time to revenue
- Increased renewal rates
- Greater percentage of transactional compliance
Think of how many deals your sales team closes in a week, month, or years’ time. For many companies, each deal requires a contract so having an efficient contract management process before and after the sale is a vital component to sales success and revenue goals.
Contract Lifecycle Management Solution – What is it?
Contract Lifecycle Management (CLM) solutions help companies manage contracts throughout every step of the lifecycle. Some stages of a contract lifecycle include: the contract request, drafting of the contract, internal review, negotiation, etc.
CLM solutions can be very effective at streamlining the contract management process across the entire business but are especially helpful for supporting sales efforts.
How Can a CLM Improve Your Sales Pipeline?
There are several ways implementing a CLM can benefit a sales department, but these three reasons illustrate how the sales pipeline is directly and positively affected:
Easier contract requests
Sales personnel can easily request a specific contract via an online request portal form. This can often be done from within a CRM application such as Salesforce.com or Microsoft Dynamics. Making the request process easy and accessible ultimately gets the contract into the hands of the potential customer much faster, shortening closing times.
Self service contracts are documents automatically created by the application following a request. In the example of a salesperson requesting a contract as described in the previous section, some CLM solutions can take that request, create the contract using pre-approved language and business rules and send it back to the requester in a matter of seconds. No human effort is necessary.
Workflow automation is another time saver when applied to contract management. Contract workflows can automatically route the contract through each stage of an approval process. They can also send automatic reminders or escalate tasks that are behind schedule.
Contract lifecycle management solutions move prospects through the pipeline faster, reducing the cycle time of each contract. This allows deals to be quickly signed and closed, revenue to be captured, and the sales team can move on to their next prospect.
Compliance and Performance Management
Improving time to revenue is not the only reason why a good CLM solution is valuable. A good CLM provides visibility to the business terms of the agreement to make sure your company and/or the other party are living up to their contractual obligations.
Contract management solutions allow customers to leverage automation for the benefit of increased deal velocity and decreased time to value. If your company sees bottlenecks in the request, drafting or approvals stages of your pre sales contract process then it may be time to investigate these systems for yourself.