A lot of companies suffered supply chain disruptions due to COVID-19. Certain experts have described the situation as a Keynesian supply shock, a negative event that triggers aggregate supply shortages with bigger impacts than the prior reduction in labor supply.
There is still a lot of uncertainty in the air, so many businesses still don’t know how to approach the coming months. Though businesses have been undergoing changes, those shifts do not necessarily have a clear direction.
One area of supply chain operations that have undergone only a little change is deal management.
Deals are still handled pretty much in the same way, with the same old tools and strategies. Yet, they get more complicated. This leads to unnecessary additional costs and losses.
A recent study by Enable summarized the views of 100 sales, purchasing, and finance professionals and found that 83% of companies reported supply chain disruptions in some capacity due to COVID-19, and 47% have seen their revenue decrease between 10-80%.
Many businesses are losing millions of dollars each year because complicated deals are handled using outdated techniques.
Right now, governments around the world are easing lockdown measures, despite fears of a second wave of the pandemic sweeping through. There is still a lot of precariousness and businesses are under pressure to renegotiate deals.
Renegotiation is inevitable since COVID-19 has altered the conditions upon which most deals were agreed. The existing arrangement puts all parties in a deal at a disadvantage.
Now, the problem is that many businesses would still be using the same poor tools that had consistently put them at a loss, even before COVID-19 was discovered.
Going forward, businesses need to rethink their strategies and pivot to digital for better deal management. Digitized deal management allows businesses to collect more data, gain better insights, and make better decisions when processing deals.
Ultimately, optimizing deal management strengthens your supply chains and even makes your sales team more effective.
One of the hallmarks of an improperly managed deal is confusion. Following the signing of an agreement, parties must continue to acquire insights into the realities and conditions that affect the deals. For instance, renegotiating deals at this time will require poring over the data of the business impacts of the pandemic.
Optimized deal management allows the sales team to access and properly assess current information on deals.
Deal negotiation involves many (often conflicting) ideas, and as all parties work towards finding common ground, some uniformity is necessary. Effective deal management puts collective principles above personal ideas. This cohesion drives attitudes that would lead to less friction, an important requirement if deals must go through successfully.
The availability of data-driven insights enhances transparency in the process, which, in turn, builds trust. As such, deals are processed faster, for the good of every party.
Deal information should be accessible on-demand to all interested parties at any time. This is important both for making critical decisions and for monitoring progress. The world increasingly becomes connected; deal brokers need to capitalize on this to optimize their processes.
According to Accenture, “digital solutions could ‘virtualize’ the entire end-to-end deal management process, perhaps using a web-based portal to bring together a virtual team from multiple areas of the organization.” Collaboration improves the relationship between deal parties. This, in turn, lowers the lifecycle of deals, empowering sales reps to close more deals in shorter times.
The situation described above, how businesses lose millions due to unclaimed rebates, is an obvious sign of poor deal management. Optimized deal management is necessary for setting better goals and properly implementing factors to monitor progress.
Deal management is one area of business that has not fully embraced digitization. Yet, most of its challenges are tied, directly or indirectly, to the use of outdated tools in a rapidly changing world.
For one, data has become the world’s most vital resource. In deal management, having detailed and accurate data is paramount to preliminary research and for maintaining comprehensive visibility of running deals.
Likewise, data is needed for better forecasting. Recounting the words of an old study, “without accurate forecasts, sales managers can expect a big gap between forecasted deals and actual closed-won deals.”
Businesses have far more data to deal with than they did ten years ago, meaning pages of spreadsheets and other paperwork can no longer deliver the right results. Deal management solutions help you to make better, data-driven decisions by giving you real-time analysis and visibility.
The prevailing data management strategy has data spread across various sources: spreadsheets, emails, and physical paperwork. This lack of consistency is what leads companies to make poor decisions and miss out on financial opportunities such as rebates.
Better forecasting with digitized deal management enhances the robustness of supply chains. By accessing relevant data, businesses can improve their risk monitoring. This results in better preparation and better adaptation to changing needs.
Instead of going with assumptions that things will fall into place, businesses can determine that through proper data analysis and subsequently implement methods to adapt their operations to even the worst shocks.
The digitization of deal management reduces dependency on certain key individuals. Due to the severe limitations of paper spreadsheets, usually only a few individuals broker deals and fully understand the ramifications applied.
With a cloud-hosted deal management solution, however, you can create a multi-threaded relationship. This translates into a more effective implementation of deals by boosting collaboration between all parties to the agreement.
Businesses must change their approach to deal with management. It’s no longer business as usual. In fact, while talking about cloud-hosted deal management solutions, there’s already been suggestions on the future role of artificial intelligence in enhancing deal management.
AI will help improve data analytics, automate financial processes, and overcome forecasting challenges with predictive analytics.
In essence, no business can afford to be left behind. Deal negotiation aims to reach an agreement that is profitable for both sides. But if a business persists with outdated tools and approaches to deal management, it wouldn’t be getting the right value for its agreements.
You can avoid losing money in unclaimed rebates and so on by digitizing your deal management to optimize negotiations.
Digitizing deal management helps you to collect detailed data, maintain comprehensive oversight, and make better decisions concerning deal negotiations.
Digital Marketer and PR Specialist, Joseph Chukwube is the Founder of Digitage, a digital marketing agency for Startups, Growth Companies and SMEs. He discusses Cybersecurity, E-commerce and Lifestyle and he’s a published writer on TripWire, Business 2 Community, Infosecurity Magazine, Techopedia, Search Engine Watch and more. To say hey or discuss a project, proposal or idea, reach him via firstname.lastname@example.org