A Data-Driven Snapshot of Today’s Sales Quoting Process

To effectively create revenue from opportunities, sales teams need a smooth, efficient process of advancing from a sales quote to closed revenue. Every organization manages this workflow in a slightly different way due to unique challenges, needs and desired results. To examine common practices and hurdles in the end-to-end quoting process, Docusign conducted a survey at the end of 2020. A total of 71 organizations participated, coming from an equal representation of size and type of offering (product vs. service vs. subscription).

Overall, respondents recognized that their current quoting workflows were inadequate. Commonly identified challenges were complex products (70%), long sales cycles (59%) and complex pricing structures (48%).

In this post, we’ll explore the results further, examining the quoting process, challenges faced, systems currently in place, the impact of the COVID-19 pandemic, and solutions offered by AI-based technology.

Current quoting processes and top challenges

Today’s quoting processes have a lot of moving parts. In our survey, half of the respondents described their quoting process as “complex.” By contrast, only a quarter said their system was “simple.” To dive further into the topic, the most difficult individual stages in that process were negotiation, configuration and contact execution.

Part of that complexity comes from the number of teams and technologies involved in the standard quoting workflow. More than half of the respondents have sales, sales operations and finance teams involved in a standard quote, with significant collaboration also coming from legal, IT, finance and others. 

Another complication in the workflow comes from utilizing too many disconnected technologies. As part of the routine quoting workflow, at least half of the respondents in our survey incorporated CPQ software, ERP software, an e-signature tool, a finance system, a billing system and a CRM platform in their quoting process. To work properly, all of those systems need to integrate seamlessly.

Building a quoting workflow that involves several teams and systems comes with serious productivity risk. Half of the respondents in our survey had problems with integration and ensuring proper data entry. 

Negotiation and closing the deal

Generating a quote is only the beginning of the quote to cash process. The quote together with a sales contract or MSA still has to be reviewed, negotiated, revised and signed before it’s complete. Our survey found that 53% of quotes and supporting contracts require negotiation. While organizations with a simple quoting workflow negotiate quotes less frequently than those with a complex workflow, when negotiation is required, it takes 25 hours on average according to the Docusign State of Contract Management report. This time consuming and costly step must be streamlined.

To modify quotes during back-and-forth negotiation, two out of three organizations are still using inefficient manual processes. They are using email to send local copies of a Microsoft Word document and tracking changes to later combine by hand before the next round of review. Only a quarter of respondents have implemented a Contract Lifecycle Management (CLM) tool that can manage negotiation from a central platform.

The same inefficient processes are at the core of common data transfer and storage methods. Survey respondents were more likely to use manual copy/paste methods than CPQ or CLM automation to transfer information from quotes into opportunity records, order forms and other downstream sales contracts. It was also far more likely that quote information was stored in a CRM as part of the opportunity than in a cloud repository or a comprehensive CLM system.

Which of the following methods do you use to transfer data from quotes into other systems?

• Manually update using copy/paste 45%

• CPQ software 32%

• CLM software 18%

• Other 4%

Which of the following methods does your organization use to store quotes?

• Kept in CRM opportunity 76%

• Cloud-based repository 32%

• Using CLM 14%

• Store paper copies 8%

• Don’t store quotes/contracts 1%

• Other 8%

Once contracts are complete, there’s still a need to analyze and review completed contracts to find risks and opportunities contained in that language. Our research showed that 44% of teams perform this analysis by hand and only 11% use AI and other analytics tools. There’s close to an even split between companies that perform this type of analysis on an ad hoc basis (41%) and those that constantly maintain dashboards containing status updates and trends about contract libraries (49%).

The impact of the COVID-19 pandemic 

In 2020 more than any other year, external circumstances have pushed sales teams to adopt new technologies and processes at incredible speed. Solutions like CPQ, CLM and CRM that move the quoting process to a digital environment have been critical to the way sales teams have handled the transition to remote selling.

When asked about the influence of the pandemic, our respondents clearly recognized that the shift to more remote work has placed more importance on sales technology. When asked about software that would digitally transform the quoting process—generating quotes inside a CRM with a single click, tracking negotiations, automating agreement workflows and storing agreements digitally—an overwhelming 91% were interested.

It’s important to note that while there will likely not be another pandemic in the coming years, new forms of disruption will continue and companies more prepared to adapt will come out ahead. This clearly points to the importance of implementing a flexible technology stack.

Taking advantage of AI for analytics

Looking into the future of quote and contract analysis, organizations are already realizing the value of AI tools that can be trained to read through contracts with natural language processing and recognize important concepts. Modern tools like Docusign Insight and Docusign Analyzer are already using this technology to help teams review libraries of completed contracts and assess incoming contracts to uncover risk and opportunity. 

Respondents in our survey found the use of AI tools for contract analysis to be very intriguing.

To learn more about  the modern sales quoting processes, download our new ebook: 8 Steps to Get Quote-to-Cash Right and Win More Deals.