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Budget - Sharing the Investment and the Benefits


Gary Zuder

June 8, 2020

You’re out enjoying a glass of lemonade (or other beverage of your choice) on a hot summer day, and you’re admiring the hydrangeas you just planted last fall. Then, a green truck pulls up with the logo “Frank’s Greatest Landscaping.” You don’t know whether to run, hide, or just speak with them. Too late! You’re already in a conversation.

“How are you today, sir?”

“Oh, just fine.”

“I’m from Frank’s Greatest Landscaping. A lot of your neighbors are taking advantage of our promotions for grub treatment, only $60 per application. Advantages include a healthier, beautiful lawn, no spongy soil, no damage by the grubs, or, critters looking for the grubs! And I hope you don’t mind me noticing, but I can see on this section of your lawn that you already have a problem, and I know we can help. What do you say?”

Alas, you maxed out your budget for the lawn this year, so you politely let him down the best way you can.

“I’m so sorry. We spend so much on lawn care already that I’m afraid there’s no money left for grub treatment.”

“I certainly understand, but may I ask you a question?”


“How much do you spend on lawn services per year?”

You pause. At this point, you start to wonder about that breakdown, as in fact you do employ other services. As you’re thinking about it, he continues.

“I’m not sure if you know about my company, but we offer full-service landscaping. Here’s our price list, along with all the benefits you’ll enjoy.”

As you look over the brochure, you notice they not only offer grub treatment, but also mulching, tree trimming, preventative treatments, and other items. You do some quick math and realize, perhaps your budget needs revisited, but from a higher level. You go back inside, talk to your spouse, and realize that the household is paying for some of these services from different companies, and other services have been auto-renewed for years!

Think about the last time you looked at your personal budget and had to make tough decisions about what to buy, what not to buy, and what to target for future purchases. With a little due diligence, sometimes the answers are more obvious than you think. After a thoughtful look about how you spend your money on all these related services, you realize you can afford the treatment with better service, added preventative care, and you finally fix the issue that you thought was out of monetary reach. Sometimes status quo and not making a change is, in fact, costing you more money. Time to call Frank back and have a meaningful, holistic conversation!

So how does this relate to managing your contracts and procuring enterprise software? As employees and leaders within a company, we all have constraints as we make decisions on what’s best for the business, and budget is always an obvious constraint. But is it?

Are we talking to fellow stakeholders? Can the benefit, as well as the investment, be shared? Are there perhaps efficiencies, time savings, and value to be found in the way you manage contracts across your enterprise? At Malbek, we encourage internal transparency and purposeful conversations across the organization (sales, legal, finance, and procurement). If you lead the legal team, bring other department heads into the conversation, understand their contracting challenges, and see how the right software solution can solve common business pains across multiple stakeholders. As a VP of sales, for instance, how might you benefit if you had visibility into the negotiation process and could collaborate with all those in the contract approval chain in one common area? If the software evaluation is a concerted effort among cross-functional teams, greater value is realized, and the “budget” becomes less about spending, and more about the return on that spend – the ROI.

The point here is that purchasing decisions need context, as explained in this article by IACCM, Price Isn't Everything.

And sure, you can find lots of value propositions with numbers and statistics that help articulate that value for different areas of the business as a result of improved contract management, for example:

  • Sales – Improved deal velocity and visibility (contracting cycles times cut in half), up to the second pipeline visibility at quarter-end, and up-selling opportunities (contract renewal rates can improve 25%). Aberdeen Report
  • Finance - Understanding the financial structure of a contract, the health of the overall company portfolio, and stopping revenue leakage (up to 9% of revenues). Poor Contract Management
  • Legal – Lowering the expense of a contracting lifecycle through improved efficiencies, as the average cost of a medium-risk contract from start to finish is over $20K. Cost of a Contract

When it is realized that having a great Contract Lifecycle Management solution across your organization benefits all, costs can then become shared, but so do the benefits of the solution, including greater efficiency, deal velocity, and risk mitigation. There are many experts in the industry that can help deconstruct the problem and connect the dots to help convey the message, including excellent boutique consulting firms like UpLevel Ops and Oya Solutions.

By stepping back and understanding the bigger picture and approaching the project as a champion, budget is no longer the obstacle it once was, and you’re well on your way to having a more beautiful, healthier, “greener” CLM!

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