Can You Collect What You’ve Negotiated?
November 18th, 2009 by clmmatrix
This is really a customer service issue, isn’t it?
Think about it. You have a contract with a customer. Regardless of how complex that contract is, it all boils down to — if you do this, then I’ll do that. If you deliver what you said you would deliver…I will pay you.
But, what if you have something in that contract that’s just a tad bit out of the ordinary. What if, in order to make that particular client happy (and sign on the dotted line), you had to offer some special incentive or some tweak to the standard contract language relating to “system fully implemented and working.”
Ah, the impact of unintended consequences.
The problem is, changing the wording on a standard contract clause can cause a host of issues no one ever thought of. This is because ambiguity leads to interpretation — and no two humans are likely to interpret the transaction in the same way. Sales translates the clause one way, finance another and the product delivery team — well, they probably are not even aware of it.
And, this is where the real problems begin. Why? Because this is where the client can get disappointed. And where a lot of confusion sets in with the accounting departments from both companies — neither of whom were involved in the original negotiation or have any comprehension of what was meant by “system fully implemented and working,” so they are very limited in their ability to resolve the issue.
Now, we like humans. We really do. They are interesting and dynamic and full of surprises. But, humans can be a considerable liability when it comes to effective contract management. When it comes to collecting what you’ve sold, the less human interpretation, the better. When we can significantly reduce the human characteristics of ambiguity, individual interpretation and he-said-she-said regarding contractual terms, life gets much easier for corporations — and, other humans. It’s an odd cycle.
Forget the risk and liability benefits that a fully automated and transparent contract lifecycle management system will provide. That’s just icing on the cake.
It’s the customer service aspect this kind of system gives you that will make you giddy. In the example above, if you have a fully automated contract lifecycle management system and in order to get the sale, you had to tweak the delivery language, then yes — everyone in the system will know about it and will have had to approve it before it actually made it to the signature table. That eases the minds of all the compliance people in the room. But, here’s the beauty of this scenario — we can also include the product delivery people in the process. This means that they too are aware of the special circumstances surrounding the deliverables and they can now be proactive and deliver exactly what is meant by all when the contract says, “system fully implemented and working.”
So, in one strategic move, we eliminate ambiguity, financial risk to the company, and the unhappiness of a client. All in a days work!
On the third Thursday of every month, we demonstrate exactly how one of the most powerful contract lifecycle management tools work. If you’d like to join us, please click here and sign up. There is no cost or obligation to you. We just want you to harness the power!
