Traditionally speaking, contract management has been the foundation of any effective quote-to-cash process. At every step, from the negotiation and creation of the contract through its execution and ultimate renewal, contract management has been the key to creating ironclad contracts that support solid customer relationships — and the organization’s revenue.
The problem, though, is that in many organizations, contract management has been treated as an afterthought. It’s often a disjointed process, with each department developing its own systems and processes for handling contracts as they move up the hierarchy. This not only creates bottlenecks and introduces the possibility of errors into the contracting process, but it also limits insight into the contracts themselves. After all, once the contract is executed, most of the departments involved in its creation are out-of-the-loop when it comes to performance, compliance and gathering the data necessary to make better decisions.
Business is changing constantly. The longstanding hierarchical structure that has long defined most businesses is giving way to more dynamic organizational models that allow for more flexibility and innovation. Rather than complex structures that give one department authority over others, businesses are shifting to cross-functional teams that allow them to provide better service via more efficient predictions and responses to customer expectations. In other words, rather than contracts moving from sales to legal to the executive suite to revenue, a team of contract managers might manage the contracting process from start to finish.
However, even if your business hasn’t shifted to a team-based model — or contracts still follow the traditional path — the common quote-to-cash process isn’t efficient, for several reasons.
Quote-to-Cash Contract Management Is Expensive. The typical quote-to-cash system is built on top of a CRM solution, such as Salesforce, which is far from adequate when it comes to contract management. Not only does it lack many of the features of an enterprise contract management system, but a Salesforce-driven solution is expensive, requiring a license for each user. Considering the number of non-sales professionals who will need access to a contract management system, the cost could prove prohibitive or unjustifiable astronomical to the average business.
Quote-to-Cash Doesn’t Provide a Consistent Experience. One of the main issues with using Salesforce or a similar SaaS as a platform for contract management is that the experience is not ideal for all your teams. In other words, while your sales team may feel comfortable working within the platform, your legal team is less likely to be — and is probably going to avoid using the platform in favor of the tools that they are more familiar and comfortable with.
Effective contract management allows you to operationalize contracts and create a consistent experience across the organization, but quote-to-cash simply doesn’t offer that experience. By moving to a true contract lifecycle management platform, you can improve collaboration and regain control of your contracts by keeping everything in one single repository. This will increase user adoption, and streamline your contracting process.
Quote-to-Cash Offers Limited Insight. Your contracts are the lifeblood of your company. The information and terms contained in these documents form the basis of every aspect of your organization, from revenue to employee retention. But again, when your contract management is limited to sales contracts, your visibility into the overall contract portfolio is also limited. A simple quote-to-cash arrangement is not going to provide you with insights derived from advanced artificial intelligence and language-based algorithms that help you make better decisions.
Your revenue department might be able to gather some sales-based insights, but overall, you won’t be getting a complete picture. Quote-to-cash works reasonably well if you want to automate your own contracts, but it doesn’t offer any insights into third-party contracts, meaning that any analysis you do conduct will be incomplete at best.
For many companies, finding the right balance for contract management is a challenge. All too often, they continue the path they are on, accepting inefficiency and expense as part of the cost of doing business. There is a solution: You can allow your teams to use the tools that they are familiar and comfortable with (such as Salesforce) but shift contract management to a dedicated platform like Exari. Exari integrates with Salesforce and many other platforms, but keeps contracts in a single, secure system. As your contracts increase in number and complexity, you simply can’t afford to rely on quote-to-cash anymore. To discover how Exari Contracts™ may just be the best solution for your CLM needs, contact us today.