Closing the Contract Gap in Sales Quoting
As organizations grow, so does the complexity of managing their agreements, which is likely why 65%1 of businesses experience delays in closing deals and recognizing revenue. Maintaining the status quo of B2B sales as complexity increases is risky and will lead to more delays and issues specifically in quote-to-cash.
In the first blog in our sales quoting series, we covered the main stages in the quote-to-cash process and took a deep dive into how CPQ software automates the complex process to configure, price and generate a quote.
Once a quote is ready though, there is significant complexity to navigate to close the deal that we refer to as the “contract gap”. This gap within quote-to-cash includes a number of manual and error prone steps associated with agreements from negotiation to post-signature workflows that are illustrated in the graphic below.
This gap is not covered by tools commonly used to streamline the quote to cash process like CRM, CPQ and ERP systems. The contracting process can in turn become a large drag on sales efficiency. Even before the rapid shift to remote selling in 2020, businesses were losing 9.2%2 of annual revenue due to poor contract management. Challenges went beyond pure bottom line loss and include:
- Slow contracting cycle times: Manual steps through the contracting process slow things down with the average B2B sale taking 17 weeks (Gartner)
- Lack of contract visibility: Most teams don’t know what is initially quoted and ultimately sold with the status of contracts generally a black box, which is why 73% of sales teams are increasingly monitoring outside sales activity (Salesforce)
- Rogue contracting: 70% of companies say over-discounting is a common problem because they lack oversight (SAP)
- Poor experience: 89% of B2B customers say experience is as important as the products and services (Salesforce)
- Increased corporate risk: Less than 10% of companies have consolidated contract data, such as the most frequent sources of contract claims or disputes (IACCM)
- Billing and collection: 47% of suppliers are paid late for their products or services (Deloitte)
Closing the contract gap
In order to close the sell-side contract gap and amplify the benefits of CPQ software integrated with a CRM solution, it’s critical to leverage modern systems of agreement.
DocuSign’s Agreement Cloud is the leading contracting platform that closes the quote-to-cash contract gap, automating manual tasks like complex document generation, orchestrating business workflows and minimizing unnecessary risk. The Agreement Cloud integrates into CRM and CPQ systems and is made up of several core capabilities:
- DocuSign CLM: Manage the full agreement life cycle for complex contracts with automated generation, real-time negotiation, drag-and-drop workflows, and powerful search
- Analyzer: Make sales more self-sufficient by automatically scoring risk from redlines and 3rd-party contracts
- Insight: Use AI to identify and analyze risks and value opportunities across all of your sales agreements
- eSignature: Complete agreements in minutes with beautiful mobile forms that work on virtually any device, anywhere
Flexential, a company that provides IT infrastructure services, provides an example of how to modernize the contracting process within quote-to-cash. They had a homegrown quoting system and a third party contract lifecycle management tool in place, but sales reps still struggled to customize complex quotes with the right products and terms, negotiations were slow and painful, and getting completed contract data where it needed to be was manual and error-prone.
Flexential rolled out DocuSign CLM for Salesforce Sales Cloud and CPQ to automate how they prepare, sign, act on, and manage agreements. Ever since, the quote-to-cash process has been much more efficient. “Sales can now create highly complex custom quotes with a click, send them out, and get through redlining and negotiation easily. All while tracking status along the way. They love it and we love it,” said Jason Rader, Senior Director of Operations at Flexential.
In the next blog in our series, we will cover how CPQ is better together with CLM and how each system supports the other.