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Ensuring future value: the critical role of contract management in sales
Arjen van Berkum |
June 13, 2024 |

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In a sales process, contract management plays a vital role in safeguarding future value by balancing the excitement of making a deal versus the realism of harvesting the value in the future.

Here’s how it ensures the long-term success and sustainability of the business:

Effective contract management ensures that agreements are clear, precise, and aligned with the interests of all parties involved. By defining the rights, obligations, and expectations of each party, contracts help prevent misunderstandings or disputes that could jeopardize the future value of the deal.

Contracts serve as risk mitigation tools by identifying potential risks and outlining mechanisms to address them. Properly managed contracts include clauses for contingencies, warranties, indemnities, and dispute resolution processes to protect the value of the deal in case of unforeseen circumstances.

Contract management ensures that agreements comply with relevant laws, regulations, and industry standards. By adhering to legal requirements, organizations safeguard the future value of their deals by avoiding legal challenges, penalties, or reputational damage that may arise from non-compliance.

Contracts specify key performance indicators, milestones, and deliverables that enable parties to monitor progress and ensure that the deal adds value as intended. Contract management facilitates ongoing performance evaluations and adjustments to optimize outcomes and preserve the long-term value of the agreement.

Contracts contribute to building strong relationships with customers, suppliers, and partners by establishing trust, mutual understanding, and accountability. Effective contract management fosters collaboration, transparency, and communication, enhancing the sustainability and value of the business relationships over time.

Well-managed contracts provide organizations with negotiation leverage in future deals by leveraging past successes, precedents, and learnings. Comprehensive contract management practices empower organizations to negotiate better terms, protect value, and secure favorable outcomes in subsequent agreements.

By ensuring that contracts are structured for scalability and continuity, organizations can adapt to changing circumstances, expand business opportunities, and sustain value over the long term. Contract management plays a crucial role in facilitating growth, innovation, and resilience in the sales process.

Too often we sell stuff and then put the delivery in the position that they need to deliver…..

Author: Arjen van Berkum

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