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ECI: Four steps to better contract management

Emma Davies-Carolan, Director of Field Marketing Europe at ECI, outlines how implementing a good ERP system will help drive efficiency and ultimately increase profits

One of the biggest challenges facing long-established businesses, across all industries is how to efficiently and smoothly transition from outdated processes and embrace online or digital solutions.

A good ERP system can strengthen the maintenance and service (M&S) contracts a business offers, not to mention the freedom employees will gain to focus on core business value propositions. This can allow business owners more time to capitalise on reliable recurring revenue streams, such as retrofits, new equipment or software and hardware installations.

Automation

Service contracts tend to be the core of many field service businesses and if they are managed well, profit can soar.

It is common for small or medium sized businesses to be apprehensive towards full automation, given the sheer upheaval. Often, sales teams try to operate either without a complete business management solution, or by sticking to doing everything manually.

In reality, automation will help vendors to better manage customer relationships and assist in securing repeat business. The extensive wealth of data that will be available and accessible through automatically generated reports and data capture, will avert the chance of poor decision-making. This could range from over-pricing contracts to misunderstandings around customers’ real business needs.

Standardisation

Drawing up new contracts can be complex. If the content, clauses, language and their application are not properly vetted it’s possible for vendors to find themselves in a less-than-profitable arrangement later down the line.

Standardising M&S contracts is arguably the first step to good contract management. Eliminating the endless and often needless paper trail will consolidate processes, making them more manageable and efficient. In terms of managing a large team, this will also eliminate confusion that often arises when members of staff are on holiday or absent.

When talking about businesses operating in the field service industry, it is likely that they will deal with hundreds, if not thousands, of contracts per year. Standardising processes will help prevent bottlenecks and ensure every customer receives the same level of great service.

Provide a variety of M&S contract packages

E-commerce giants, such as Amazon and Ebay, have changed the face of online retail, allowing customers to do almost anything they want in just a few clicks. This has changed the landscape of the industry; customers have grown to always expect a customised and highly efficient service.

One size does not necessarily fit all in service contracts, individual customers have unique needs and these can often change. Businesses should be mindful that simply standardising service requests across all contracts might make lucrative accounts unprofitable.

A proper contract lifecycle management (CLM) system contains fields to apply variables to each account, such as the size and the industry of the business, as well as equipment and usage.

Monitor contracts and performance

M&S contracts should not be set and then forgotten. Having a robust business management solution will support every phase of the contract lifecycle from the initial quote and the ongoing support provided, right through to the renewal process.

Ongoing monitoring by keeping service and contract data in one location is important and has the potential to create insights and generate contract profitability reports which inform strategy in relation to preventative maintenance customer visits.

Unprofitable equipment that would have otherwise been a long term profitability drain can be quickly taken out of circulation. All this data is essential, whether it’s manually extracted from separate systems, or automatically generated from an integrated ERP solution.

Historically, monitoring contracts would have drained staff time. Software can generate system alerts ensuring staff keep an eye on key milestones within the contract.

By gaining access to as much customer insight as possible, field service businesses can fight shrinking margins and stay head and shoulders above their competitors. The key to achieving this is by being sure that the data captured encompasses all aspects of the client journey, from the minute the contract is signed right through to renewal and beyond.

www.ecisolutions.com

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