What is Service Contract

Service Contract is an agreement or settlement between two parties under a slew of terms and conditions. The agreement can be for a specific period of time either to perform the repair, replacement of any kind of property, or reimbursement, due to the defects in material or wear and tear. However, a service contract may cover any kind of property, including motor vehicles, electronics, computers, home appliances, software license, and electrical system components. In many instances, service contracts are claimed for the damage caused to property from power surges or accidental damage while handling.

Example: Service Contracts in Salesforce:

A service contract in Salesforce is a document of agreement between an organization and its customer or a client for the type of services and support offered. It represents warranties, subscriptions, service level agreements (SLAs) and other types of customer support.

• Service contracts are privileged with some advanced features that can be used to define specific levels of services offered to customers.
• A customer can claim for renewing the contract levels if and only if the service contract is still active.

Challenges in Maintaining Service Contracts:

With the huge revenue and customer satisfaction on the line, maintaining service contract data and re-engaging customers has become a challenge in the present scenario. Maintaining a renewal data is worth, compared to pursuing a new customer for sale. The loss of even a single customer-renewal data can make a huge distinction within the revenue stream. Moreover, maintenance is not a one-time task, it keeps recurring.

The major challenge is achieving a consolidated view of contract data. Most of the channel partners identify the potential benefits in service contracts data, but obtaining streamlined visibility into the maintenance data is arduous. In most of the cases, value-added resellers use spreadsheets to trace out their warranty and service maintenance data, but those spreadsheets are siloed with sales representative data.

From a distributor and manufacturer perspective, tracking customer contract data is even more challenging as two to three levels of data are removed from the actual sale. On the other hand, achieving visibility through sheer volume of data is still impossible.

Implementing an intelligent contract management solution can help companies to transform their business by harnessing contract data from multiple sources into actionable insights.

Benefits of Implementing Contract Management Solution:

• Contracting software provides easy and flexible options to audit, track and report required contract data, improve global business controls and faster workflow cycles.
• It provides the ability to import and work with contracts and legal agreements generated by other companies, regardless of a type of contract, whether it is a paper-based or electronic, the contract images enables third party negotiation and collaboration.
• It provides an audit-friendly online contract database with a complete history of editing, robust tracking, and reporting capabilities.
• It helps reducing revenue loss and improving revenue assurance through capabilities like easy rate management, which ensures that the revenue opportunities such as price/rate changes, renewals, and expired contracts are not missed out.
• It enables fast return on investment (ROI) by optimizing contract performance, vendor management, customer and supplier/sourcing management, contract renewals, etc.