Last month, the Ardent Partners analyst team traveled en masse to AribaLIVE, Ariba’s annual event that brings together 2,000 of its customers, prospects, staffers, and partners, plus a who’s who of the analysts and media outlets that cover the space. Our analysis of this year’s event includes coverage of two keynotes here and here and two insightful pieces from Vishal on Payables Place here & here. While there, we had many great and varied conversations with procurement and finance pros (but no demos – any analyst worth his/her salt can tell you these are much better when conducted in a private one-on-one online setting vs. a crowded trade show floor) and also found time to tour the monuments and deliver a few presentations. Ardent’s Chief Research Officer, Andrew Bartolini, spoke on something more evolutionary in scope (the elusive “perfect order”) while I was asked to present on a traditional topic that I’ve known from my earliest days as an industry analyst: sell-side contract lifecycle management.

[Note from the publisher, Andrew Bartolini: Since some enterprises look for an enterprise-level contract management solution that can manage the range of their contract needs (buy, sell, IP, etc.), we believe it can be useful for procurement professionals to have familiarity with the sell-side of contract lifecycle management. It’s why Ardent Partners covers it and why we’ve included today’s article on CPO Rising.]

The two sides of the contract management coin (the buy- and sell- sides) sit at opposite ends of the corporate spectrum, and, therefore, should rightfully have their own respective challenges, pain-points and best practices (as well as technologies). However, some of the ideas I discussed at the event in regards to this function bridge the gap and help both sides of CLM leverage similar strategies and concepts.

Sell-side contract management may not be the “flashy” function that others in the organization think it is, but, it’s critically important – with roughly 75% of all corporate revenues tied/linked directly to sales contracts. Combined with common challenges, such as limited visibility into contract data, disparate and disconnected processes and systems, and inconsistent contract language, and we are presented with a disorganized function that could severely impact enterprise revenues.

The archetypal sell-side contract management “cycle,” which includes phases for proposal creation, client negotiations, contract creation and contract execution, must be top-of-mind for the typical sales organization as they seek to enhance these processes and apply a level of rigor to ensure they are standardized across the entire organization.

My presentation revolved around a few key recommendations that all organizations can leverage to improve the management of contracts on the sell-side which I will summarize here:

• Integrate the components of “the cycle” and link these to the greater organization. There’s no better reason to integrate the processes inherent in the sell-side contract management cycle with greater corporate objectives than the fact that revenues are attached to sell-side contracts. Organizations must ensure that they avoid “revenue leakage,” a disheartening result of poor contract execution on the sell-side.
• Focus on “agreement management” rather than “contract management.” Contracts and agreements are considered the same things in the corporate world, however, “agreement management” is a more strategic term that reflects the complex nature of sales contracts. Where do we need to be to fulfill our agreements? What exactly are we delivering to our clients? When do our services need to be completed? These are questions that have direct links to the true execution of sales contracts.
• Automate for maximum efficiency and visibility. CLM technology offerings (or enterprise software that includes automated capabilities for sell-side CLM) offer a variety of benefits, including full automation of “the cycle,” a central repository of contracts and relevant/related agreement data, robust reporting and analytics, and integration with customer relationship management software (which promotes full visibility of the sales pipeline and conversations with potential clients; this information can improve the accuracy of proposals and contracts).
• Transform sell-side contract lifecycle management from a tactical function to a strategic function. Remember the weight of sales contracts and understand that sell-side contract management isn’t just a series of tactical processes without critical corporate ramifications. By applying a strategic mindset to this function, sales contracts rise to the forefront of the greater corporate outlook. Processes within “the cycle” should have more meaning, and with each client / customer agreement managed in an effective manner, the entire enterprise will benefit from a sales function that contributes to revenue and supports the corporate brand.

Tagged in: Ardent Partners Research, Christopher Dwyer, Contract Lifecycle Management, Events, Technology