Most leading companies that negotiate complex sales contracts are establishing a “Deal Desk” function to improve both profit margins and how deals are structured. Experience has shown that organizations with complex deal structures tend to have a high degree of non-standardized rogue contracts that are difficult to implement operationally and from a revenue recognition perspective. The Deal Desk acts as a single point of entry for all contracts when pricing, terms, or unique products or services are negotiated. The Deal Desk also coordinates the review process between Legal, Finance, and Operations to ensure that deals are correctly structured, corporate standards are enforced, and government compliance standards are maintained.
The major benefits of establishing a Deal Desk include the following:
- Improved Customer Relationships
- Sales Rep Productivity
- Margin Improvement
- Improved Controls
- Increased Operational Efficiency
- Deal Prioritization and Resource Allocation
When we refer to building a “Deal Desk” function, we are speaking inclusively about a new organizational structure, business workflow definition and automation, key controls as well as policies and procedures for negotiating contracts. When fully formalized and implemented, the workflow and key controls are integrated throughout the entire Quote to Cash mega-process.
Establishing a Deal Desk function transforms the “Middle Office” of the organization by providing comprehensive sales performance metrics, greater contract visibility and transparency, and drastically reducing Time to Revenue. Each of these objectives can be achieved while at the same time improving the overall customer buying experience.
Improved Customer Relationships
Ensuring an excellent customer experience during the sales process requires a great deal of coordination across the Enterprise. It is extremely important to have a high degree of cooperation between the Sales Organization and the Deal Desk. The ability for Sales to use Solution Selling techniques that gather detailed customer pain-points and easily convert that information into an accurate quote is critical. Getting the requirements, pricing and internal approvals in a timely manner is central to a quality customer experience.
Drive Sales Productivity
Sales productivity is critical, especially for fast-growth companies. Sales Reps, Finance, Legal and Operations all need to have a common tool-set that can quickly price, generate a quote, and easily convert that quote into a sales contracts for delivery to the customer. Regardless of pricing complexities or product/service configurations, these quotes and contracts must comply with all existing agreements, pricing terms, and government regulations. To accomplish this in an efficient manner, Finance and Legal need to be integrated into the Deal Desk process.
Increased Controls
The ability to meet stringent revenue recognition requirements for Sarbanes Oxley compliance is also one of the primary reasons for implementing a Deal Desk. Publicly traded companies that negotiate a wide variety of non-standard contracts find that implementing a Deal Desk is critical to their ability to comply with Gap Accounting standards. This pre-deal review process is often viewed as a means to gain control over how deals are structured so that revenue recognition standards can be maintained. From a contract review perspective, the Deal Desk is critical to consistently handle non-standard contracts, contract amendments, contract renewals, and manage negotiations when new products and services are introduced to the marketplace.
Margin Improvement
Many organizations have also found that the Deal Desk is an excellent vehicle for tracking pricing and discounting, especially if there is no universal pricing or quotation capability. The Deal Desk can improve top-line revenue by increasing discount visibility and actively managing pricing practices upfront in the deal structuring process. Likewise, margin improvement can be anticipated by maintaining visibility and control of quotes in the field.
Deal Prioritization and Resource Allocation:
In organizations dealing with a large volume of contracts and complex deals, a deal desk helps prioritize and allocate resources effectively. They evaluate each deal’s potential value and strategic importance, considering factors such as revenue potential, customer impact, and market positioning. By doing so, deal desks help organizations focus their efforts on high-priority deals and allocate resources accordingly.
Improved Efficiency
The ability to control world-wide contracts in a single location using a structured workflow is an efficient way of capturing and analyzing potential contracting issues. The Deal Desk function works to create contract templates and business rules that govern and expedite the contract review process. This process increases the number of standard deals over time, improving organizational scalability from a Quote to Revenue Recognition perspective. The Deal Desk also aids in closing the books quickly because non-controlled contracting processes require a high amount of manual clean-up downstream in Finance and Accounting. Likewise, the Deal Desk enables salespeople to spend more time selling by providing clear rules for structuring deals. Over time, the ability to standardize contracts and improve the deal review process significantly increases organizational scalability.
HBSC Can Help
HBSC Strategic Services has helped numerous Fortune 1000 Clients implement a Deal Desk function and other customer-centric process improvements over the past 18 years. The end results were improved customer relationships and sales productivity, appropriate SOX controls, increased margins, and significant gains in Quote to Cash efficiency and scalability. If you need help implementing a Deal Desk function to transform your Quote to Cash process, HBSC Strategic Services can help. Please contact us at client-development@hbsconsult.com or visit our website at www.hbsconsult.com for more information.