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How to Optimize B2B Deal Management to Cut Costs and Losses in 2021

B2B deal management

A lot of companies suffered supply chain disruptions due to COVID-19. Certain experts have described the situation as a Keynesian supply shock, a negative event that triggers aggregate supply shortages with bigger impacts than the prior reduction in labor supply.

There is still a lot of uncertainty in the air, so many businesses still don’t know how to approach the coming months. Though businesses have been undergoing changes, those shifts do not necessarily have a clear direction.

One area of supply chain operations that have undergone only a little change is deal management.

Deals are still handled pretty much in the same way, with the same old tools and strategies. Yet, they get more complicated. This leads to unnecessary additional costs and losses.

A recent study by Enable summarized the views of 100 sales, purchasing, and finance professionals and found that 83% of companies reported supply chain disruptions in some capacity due to COVID-19, and 47% have seen their revenue decrease between 10-80%.

Many businesses are losing millions of dollars each year because complicated deals are handled using outdated techniques.

COVID-19 and Deal Renegotiation

COVID-19 has delivered the biggest shocks to supply chains globally, forcing businesses to make swift changes to adapt to the new reality.

Right now, governments around the world are easing lockdown measures, despite fears of a second wave of the pandemic sweeping through. There is still a lot of precariousness and businesses are under pressure to renegotiate deals.

Renegotiation is inevitable since COVID-19 has altered the conditions upon which most deals were agreed. The existing arrangement puts all parties in a deal at a disadvantage.

Now, the problem is that many businesses would still be using the same poor tools that had consistently put them at a loss, even before COVID-19 was discovered.

Going forward, businesses need to rethink their strategies and pivot to digital for better deal management. Digitized deal management allows businesses to collect more data, gain better insights, and make better decisions when processing deals.

Ultimately, optimizing deal management strengthens your supply chains and even makes your sales team more effective.

Benefits of Optimized Deal Management to Sales Reps

1. Data-Driven Insights

One of the hallmarks of an improperly managed deal is confusion. Following the signing of an agreement, parties must continue to acquire insights into the realities and conditions that affect the deals. For instance, renegotiating deals at this time will require poring over the data of the business impacts of the pandemic.

Optimized deal management allows the sales team to access and properly assess current information on deals.

2. Friction-less Agreement

Deal negotiation involves many (often conflicting) ideas, and as all parties work towards finding common ground, some uniformity is necessary. Effective deal management puts collective principles above personal ideas. This cohesion drives attitudes that would lead to less friction, an important requirement if deals must go through successfully.

The availability of data-driven insights enhances transparency in the process, which, in turn, builds trust. As such, deals are processed faster, for the good of every party.

3. Collaboration

Deal information should be accessible on-demand to all interested parties at any time. This is important both for making critical decisions and for monitoring progress. The world increasingly becomes connected; deal brokers need to capitalize on this to optimize their processes.

According to Accenture, “digital solutions could ‘virtualize’ the entire end-to-end deal management process, perhaps using a web-based portal to bring together a virtual team from multiple areas of the organization.� Collaboration improves the relationship between deal parties. This, in turn, lowers the lifecycle of deals, empowering sales reps to close more deals in shorter times.

4. Accountability

The situation described above, how businesses lose millions due to unclaimed rebates, is an obvious sign of poor deal management. Optimized deal management is necessary for setting better goals and properly implementing factors to monitor progress.

Digitization of Deal Management

Deal management is one area of business that has not fully embraced digitization. Yet, most of its challenges are tied, directly or indirectly, to the use of outdated tools in a rapidly changing world.

For one, data has become the world’s most vital resource. In deal management, having detailed and accurate data is paramount to preliminary research and for maintaining comprehensive visibility of running deals.

Likewise, data is needed for better forecasting. Recounting the words of an old study, “without accurate forecasts, sales managers can expect a big gap between forecasted deals and actual closed-won deals.�

Businesses have far more data to deal with than they did ten years ago, meaning pages of spreadsheets and other paperwork can no longer deliver the right results. Deal management solutions help you to make better, data-driven decisions by giving you real-time analysis and visibility.

The prevailing data management strategy has data spread across various sources: spreadsheets, emails, and physical paperwork. This lack of consistency is what leads companies to make poor decisions and miss out on financial opportunities such as rebates.

Better forecasting with digitized deal management enhances the robustness of supply chains. By accessing relevant data, businesses can improve their risk monitoring. This results in better preparation and better adaptation to changing needs.

Instead of going with assumptions that things will fall into place, businesses can determine that through proper data analysis and subsequently implement methods to adapt their operations to even the worst shocks.

The digitization of deal management reduces dependency on certain key individuals. Due to the severe limitations of paper spreadsheets, usually only a few individuals broker deals and fully understand the ramifications applied.

With a cloud-hosted deal management solution, however, you can create a multi-threaded relationship. This translates into a more effective implementation of deals by boosting collaboration between all parties to the agreement.

Businesses must change their approach to deal with management. It’s no longer business as usual. In fact, while talking about cloud-hosted deal management solutions, there’s already been suggestions on the future role of artificial intelligence in enhancing deal management.

AI will help improve data analytics, automate financial processes, and overcome forecasting challenges with predictive analytics.

Conclusion

In essence, no business can afford to be left behind. Deal negotiation aims to reach an agreement that is profitable for both sides. But if a business persists with outdated tools and approaches to deal management, it wouldn’t be getting the right value for its agreements.

You can avoid losing money in unclaimed rebates and so on by digitizing your deal management to optimize negotiations.

Digitizing deal management helps you to collect detailed data, maintain comprehensive oversight, and make better decisions concerning deal negotiations.

The post How to Optimize B2B Deal Management to Cut Costs and Losses in 2021 appeared first on ReadWrite.

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Why Digitizing Supply Chain Management Will Lead to Greater Efficiency in the New Normal

digitizing supply chain management

Going by Deloitte’s report on the performance of SMBs in a digital world, the majority of SMBs have not digitized their supply chain management. Since much of the world has gone digital, this means that several SMBs remain backward and struggle with inefficiency in supply management.

The digitization of supply chain operations helps companies to cut costs and save time, leading to overall increased efficiency.

While many supply chain operations would have been hampered by the effects of the COVID-19 pandemic, as businesses reopen, a digital transformation, tailored to each company’s needs and circumstances, is necessary. Digital tools and technologies that would boost supply chain management include automation, IoT, cloud computing, and analytics.

Benefits of Digitizing SCM

1. Real-Time Visibility

According to a survey, 84% of Chief Information Security Officers admitted to the lack of visibility being their biggest challenge. Lack of visibility creates blind spots and lets vulnerability fester until operations break down significantly, and revenue and profit reduce. This begs a reimagination of supply chain management, with the focus being delivering end-to-end visibility in real-time.

Apparently, businesses need to have 70 – 90% visibility on supply chain operations to address key volatility points efficiently. Only digitization makes this possible.

2. Data Integration

Digitizing supply chain management fosters interoperability and eliminates lags that the chain would have experienced otherwise. It also helps to maintain integrity and trust among partners.

In digital supply chain management, the information does not flow linearly, but rather simultaneously, whereby each point’s details are available to every other point.

This results in smoother decision-making and collaboration from planning to execution. The ultimate benefit is the ability to meet customers’ demands responsively. According to E2open, “Collaborating earlier in the product lifecycle reduces development and turnaround time, with a marked increase in fill rates averaging 10% to 15%.�

3. Predictive Maintenance

The advantage of real-time visibility is not just repairing structural deficiencies as soon as they appear, but more in addressing them before they become obvious. Artificial intelligence and analytics particularly come into play here, significantly increasing the accuracy of predictions. In short, a digital supply chain is a predictive supply chain.

Producing too much is often as bad as producing too little. But with advanced technologies, supply chain managers can gain detailed insights into operations and make smart decisions to forestall disruptions. 

4. Cash Flow Improvement

Digitization does not only affect supply chain operations but finance as well. On the one hand, it optimizes operations, which directly helps to preserve and boost cash flow. Research shows that digitizing the supply chain can lower operational costs by up to 50% and increase revenue by 10%.

SCM Digitization Technologies

  • Internet of Things

RFID has been used to track the exact location of logistics goods and materials, rendering barcode scanners and other similar means obsolete. Radio data transfer also eases communication across channels on the chain, such that broader details, including the condition of the assets, can be shared with colleagues.

Bluetooth, NFC tags, and GPS perform similar functions on different scales. And on a higher level, there are autonomous robots. These technologies are transforming inventory monitoring and warehouse management as a whole.

IoT technology in supply chain management is useful for determining the exact location of items in real-time, tracking movement, and monitoring the items’ storage conditions. These ensure safer and smoother delivery and reduce the operational back-and-forth that characterized traditional models of authenticating items.

  • Advanced Analytics

Supply Chain Analytics is an emerging aspect of SCM that uses quantitative data to extrapolate insight and optimize decision-making about the supply chain. Supply chains are complicated, and it is necessary to have an advanced system that helps managers make sense of all the data and information being gathered.

SCA is divided into:

  • Descriptive analytics: ensuring visibility
  • Predictive analytics: projecting future trends
  • Prescriptive analytics: solving problems
  • Cognitive analytics: answering questions by mimicking human reasoning

Take, for example, predictive analytics, which monitors data patterns to determine probable future trends. Predictive analytics helps managers to intelligently forecast future demand by analyzing several variables and how they affect demand. This helps them adjust operations as necessary and ultimately eliminate unnecessary costs associated with over- or under-supplying. And of course, there is the benefit of predictive maintenance.

The use of predictive analytics by supply chain managers increased to 30% in 2019 from 17% in 2017, while 57% of non-users plan to adopt it within the next five years, according to the 2020 MHI Annual Industry Report.

  • Cloud Computing

Accenture describes cloud computing as “the engine that makes supply chains talk to each other.�

Cloud computing allows you to integrate multiple platforms and data sources for seamless operations and flexibility. Rather than hoarding information in silos, thereby hindering collaboration, the cloud uses a network model that makes resources and data available on demand. This heightened responsiveness and agility boost the speed and efficiency of operations.

Also, cloud computing features a usage-based approach that makes them highly scalable. You can quickly meet new demands by ‘plugging in’ more resources and tools. And you can likewise scale down to focus on a particular niche or market segment.

In any case, it is understandable that the bleak state of cloud cybersecurity has made many companies reluctant to move their operations, including SCM, to the cloud. But frankly, this is up to your cloud provider and overall security consciousness. Measures to protect your system from hacking and data loss abound.

  • Automation

Based on a survey of professionals, warehouse automation receives more investment (57%) than any other supply chain technology, including predictive analytics (47%) and IoT (41%).

The adoption of automation in supply chain operations has been on a steady rise in recent years. A Mckinsey report identifies the following three factors as responsible: a growing shortage of labor, an explosion in demand from online retailers, and some intriguing technological advances.

Automating automatable tasks frees up labor for tasks that require strictly human input. But it is one thing to recognize that automation drives efficiency; it is another actually to adopt it. And in reality, most companies still lean towards manual rather than automated operations. This is due to specific challenges, such as fluctuating customer demands. This particularly puts the biggest companies at an unequal advantage.

However, there are many options available when it comes to automation. A business only needs to understand its market to make the right choices concerning automating their work.

Conclusion

Despite the abounding benefits and potentials of digitizing supply chain management, it is not without its obstacles. For instance, in some cases, government regulations are behind in innovation, mandating manual approaches even when there are better, digitized options.

Also, the process of digitizing the supply chain is not a small undertaking and is one that must be carried out in bits. With a sudden overhaul, you risk upsetting your entire business model.

Digitizing supply chain management leads to efficiency, and the biggest companies acknowledge this and act appropriately. According to Gartner, “by 2023, at least 50% of large global companies will be using AI, advanced analytics, and IoT in supply chain operations.� It is the SMBs that must strive to catch up and optimize its supply chain with digital tools.

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