October 12, 2005

Management executives around the world are trying to rejuvenate growth in the B2B sector.

However, as businesses are wishing to generate additional revenue, they are often hindered by outdated processes, older technology and data processing solutions.

Such roadblocks largely reduce the productivity of brokers, bankers and various account executives, the same ones that are truly responsible for initiating and eventually closing the deals that ultimately lead to large revenue increases, which in turn will translate to higher margins.

Today's dealmakers are too often overburdened with low-value activities such as administration, reproducing information and searching for existing research. Extended deal teams that span multiple offices, time zones, and industry practice groups often lack an effective way to coordinate their efforts and collaborate effectively on the creation and execution of documents.

Defining the term "deal management" is important to help understand the processes, participants and information that must be addressed in any solution designed to improve this important activity.

As a general definition, a deal can be thought of as a transaction or agreement made by multiple parties reached after collaborating and reviewing relevant information.

In this light, it makes no difference whether a deal is an M&A transaction, a loan approval process, a business negotiation, or numerous other scenarios -- they are all governed by multiple parties committing to business relationships after reviewing key information.

Much of the problem lies in the difficulty of instituting an end-to-end deal process, one than brings both the primary deal team and the associated support groups -- such as finance and legal -- into a seamless and efficient working environment, with full support for document capture and compliance requirements. Instead, patchwork deal processes lead to increased time-to-signature, impaired productivity, non-compliance and lost deals.

In response, companies are increasingly adopting deal management software solutions designed to address the three key drivers of increasing revenue and decreasing risk:

* Accelerating transaction cycle time
* Leveraging organizational knowledge for competitive advantage
* Meeting key compliance protocols

Deal cycles in today's environment are lengthening due to distributed deal teams, more rigorous due diligence and account investigation and the inherent hand-offs and review cycles. For instance, an M&A team working to acquire a multinational company may literally have hundreds of team members dispersed around the globe working on due diligence and change management projects.

The information flowing between these team members is highly sensitive, changes frequently and is critical to the project's success. Therefore, having the most current version of a document is vital.

And it is clear that the traditional modes of communication -- such as overnight couriers, voice mail, and e-mail -- are inadequate to meet the timeliness, security and accuracy mandates of the team members.

Instead, companies are using deal management solutions to enable teams and supporting organizations to better manage the deal cycle with the help of document management, collaboration and e-mail aggregation, and workflow automation.

Using these solutions, deal teams can collaboratively manage their work, streamline internal approvals and sign-offs, and coordinate communications with business partners to improve deal closing times.

As the volume of deal-related content pushes traditional file systems to the breaking point, employees often spend more time looking for information or recreating it from scratch than using it to close deals.

In fact, independent research has shown that knowledge workers spend almost 7 hours per week searching for, not finding, and then recreating documents and content -- an unbelievable 15% of their work week spent in unproductive activities (1).

Deal management solutions enable companies to more effectively capture, organize and reuse vital knowledge for client and practice development.

For instance, financial models, competitive information, research analyses, and other information can be saved within the context of a virtual deal room. Thereafter, when a similar project, investment opportunity or partnership is presented, deal members can reference the previously-saved deal room to repurpose and leverage relevant information.

For example, the loan review department of a large commercial bank often reviews the risk factors and potential returns made from making loans to companies operating in certain sectors.

The due diligence and analysis conducted in the course or reviewing one application can easily be leveraged in subsequent loan requests from other companies in this sector. This improves not only the efficiency of the due diligence and approval process but also improves the quality and consistency of the decisions made by the deal team.

Team members are provided with the full spectrum of search options, including metadata and full-text, to help them quickly find and leverage existing corporate knowledge to improve the deal process.

Compliance, always a major concern for business, is made even more challenging when a deal becomes more complex with more people and more communications.

It is important that all of these customer touch points are secure and that all communications are captured and archived. Records management, e-mail management, audit trails, and reporting tools are all critical capabilities that help drive down the risks and costs of non-compliance.

Deal management solutions allow users to store contract-related information, often referred to as controlled documents, in a centralized location that is easily accessible to all authorized users through the Internet, both inside and outside the firewall.

This is critical because auditors and regulators often make requests to review prior transactions and agreements.

Having all discussion threads, approvals, and documentation saved together within the context of the deal provides internal and external reviewers with a complete view of the process and the participants.

Another aspect of a deal management solution is the creation of automatic e-mail notifications where team members are made aware of important changes to deals and upcoming contract-related activities.. The result is improved compliance across the entire deal process without increasing time or costs.

To realize the full benefits of deal management software, companies should look for a system with a wide range of capabilities to improve deal process efficiency and customer satisfaction. Key features to look for include:

* Intuitive user interface (UI) for easier rollout
* Deep integration with related applications
* Full-featured document and record management
* Workflow capabilities for document review and approval
* Projects, tasks, events, milestones and other collaborative tools

Given the sensitive nature of deal content, security is also a key consideration. For worry-free, cost-effective deployment, the solution should provide:

* Multiple security layers that allow for custom security settings
* Secure extranet to allow users to access critical deal information
* Full reporting and audit trails

In today's environment of increased competition, weakened customer loyalty and unprecedented compliance oversight, companies can no longer settle for ad hoc, highly manual deal management processes.

Deal management software can help companies improve their financial performance while reducing compliance burden and risk. This enables companies to meet their short-term growth goals and provides a sound foundation for optimal long-term performance.

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