Contract management has a reputation for being ‘unsexy’. SaaS solutions, the cloud, optimised planning and scheduling, and mobility in the field all seem more exciting to talk about. The thing is, contract management underpins everything. It’s your starting point, your foundation. And like any foundation, you can’t really build anything without it.
Why is contract management important?
Service contracts are the lifeblood of most service companies. They provide recurring revenue and constant opportunities to nurture the customer relationship. This in turn makes the likelihood of those customers purchasing upgrades and add-ons and ultimately renewing at the end of the contract period ever more likely.
The overarching importance of contract management is as a means of securing this revenue. It ensures that you are able to meet—and exceed—customer expectations during the life of the contract. It also ensures that you are in a position to renew or upsell contracts well in advance of expiry.
What are the implications of poor contract management?
Some companies still rely on spreadsheets, point solutions and cobbled-together software suites to manage their contracts. Here are some of the things that can go wrong with manual or unintegrated contract management:
- Important information can be lost or misfiled.
Data is not instantly to hand, which makes finding answers to customers’ questions difficult and slow.
- You’re required to enter the same data multiple times across different applications due to the lack of integration with the rest of your Field Service Management (FSM) system.
- You can end up undercharging your customers, e.g. failing to invoice for parts where the service contract doesn’t include them.
- You’re unable to see which contracts are profitable and which are not so you can adjust your contract prices.
- You could miss the contract renewal date and lose out on a year’s worth of revenue.
- Your field service operation can be destabilised, i.e. it’s difficult to manage and maintain your clients’ equipment if you’re not sure what assets are included in the contract, or what the customer’s entitlement is.
The benefits of centralised, automated and integrated contract management
Centralised, integrated and automated contract management software will eliminate these problems, boosting the speed, efficiency, accuracy and profitability of your field service operation. It saves office space, cuts back admin and eliminates human error. Handling calls, planning tasks, scheduling engineers, invoicing and reporting are all made quicker and easier by having contract data instantly and automatically feeding through to these stages of the service chain.
WHICH IS WHY…
…Centralised, integrated and automated contract management is the most fundamental element of any good FSM solution.
The problem is that service companies looking for new FSM software have a tendency to overlook contract management. They’re taken in by ‘sexier’ technologies such as scheduling and mobile tools where many software providers are able to demonstrate better USPs. But automated contract management is the thing that makes everything else work. Without it, the value of the sexier elements of your system will go to waste. It would be like buying a flash car with Bluetooth connectivity, voice control, back-up cameras and over-the-air software updates—but no engine.
What should you expect from the contract management element of an FSM system?
All the various service contracts and associated documents for a given customer and the different sites they operate should be in one place. The details of a contract should be easy to record and surface both by staff in the office and engineers onsite, including engineer skill-set requirements, accessible hours and any other specific criteria for service visits. The system should be intuitive, particularly when inputting contract information, and have a degree of customisability, i.e. the ability to add input fields that accord with your own work processes.
Another area in which automated and integrated contract management can shine is in the harmonisation of sales and service. You’ll often find that organisations treat sales and service as two separate areas. This is a missed opportunity given that a company’s field service engineers are on the front lines, dealing with customers face to face, and in a prime position to pick up on sales opportunities. These sales opportunities could be as simple as noticing when a customer needs a new consumable or a warranty is due to expire, or identifying other assets for which your company could provide a service contract. Sophisticated contract management functionality can bring your sales and service activities onto the same page through automatic information exchange between the two departments.
Asolvi’s leading-edge FSM solutions come with comprehensive, automated and fully integrated contract management functionality. This functionality is responsible for the extremely high levels of visibility these solutions bring to service organisations. It gives users complete control of their service contracts and an exhaustive view of their customer, contract and machine profitability.
Specifically, the contract management elements of our software enable the following:
- Easy recording and surfacing of contract information
- Seamless integration with all parts of the service chain, including call control, scheduling, stock management and field work
- Automatic information exchange between sales and service departments
- Automatic meter reading and generation of invoices
- Automatic alerts linked to expirations, renewals and key service events
- Sophisticated analytics and reporting
- Detailed tracking of profitability