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Digital Deal Confirmation

· 4 min read
Mark Forrest-Smith
Head of Strategic Execution

Should South Africa be converting to Digital Deal Confirmations and why?​

Established South African business practice would indicate that “confirmation” of a deal between a buyer and seller is normally concluded via some form of paper-based document that is emailed from one party to the next

Generally, an acceptable practice that has worked for years, until something goes wrong – a deal is not captured by one party or another or is incorrectly captured.

The result of that “error” sees the introduction of claims, lost sales potential, delayed payments, increased processing costs and let’s not forget the strain that places upon the trading relationship.

All of us who have been confronted with the above scenario would have been asking, “Is there not a better way to achieve the desired outcome and prevent the headaches of an error creeping into the process?

Interested? Check out my blog

Should businesses be converting to Digital Deal Confirmations?​

Overview​

The accepted practice of confirming a deal struck between a buyer and seller - aside from the historical practice of a “handshake” (some of us may remember those days) - is for one party to confirm the details of deal reached with the other party via some form of written confirmation. Whether this be by an email, letter or some sort of form, this is considered to be normal and generally it performs well.. until it doesn’t!

Someone, somewhere, sometime is capturing the detail of the agreed deal into a system. Whether it be a "timing" issue, or an incorrectly captured detail, errors occur and it's in those moments that the "established" process fails

Any of us, who have been on the receiving end of an “error” can attest to the “pain” experienced in trying to resolve the issue and minimise the impact of the error.

I’m pretty sure we’ve all experienced the lost sales, lost revenue, delayed payments and increased processing costs in trying to sort out the mess through a deal not having been captured correctly – whether it be in the sellers and or buyers ERP environment. Not least, there’s the relationship damage that is caused between the people who struck the deal - much like dealing with "a bull in a china shop!"

In this increasingly digitised world, where trading documents are being shared via some form of electronic means between businesses, it makes sense to consider the digitisation of the deal and transmit it directly from one system to another

What is a “Digital Deal Confirmation”?​

Digital Deal Confirmations (DDCs) are electronic versions of traditional deal confirmations used in business transactions. They serve as a formal acknowledgment of the terms and conditions agreed upon by the parties involved in a deal. Here are some key aspects of DDCs:

Key Features of Digital Deal Confirmations​

  1. Electronic Format: Unlike paper-based confirmations, DDCs are created, sent, and stored electronically. This makes them more accessible and easier to manage
  2. Automation: DDCs often involve automated processes that reduce the need for manual intervention, thereby minimizing errors and speeding up the confirmation process
  3. Security: Enhanced security measures, such as encryption and secure access controls, are typically implemented to protect sensitive information
  4. Compliance: DDCs help ensure that all transactions comply with relevant regulations by providing a clear and auditable trail of all deal confirmations. This could have application within the pharmaceutical industry, where pricing can be highly regulated and in cross-border transactions
  5. Integration: They can be integrated with other business systems, such as Customer Relationship Management (CRM) and Enterprise Resource Planning (ERP) platforms, to streamline operations and improve efficiency
  6. Real-Time Updates: DDCs provide real-time updates on the status of deals, allowing for better decision-making and quicker responses to any issues that may arise

By adopting DDCs, businesses can enhance their operational efficiency, reduce costs, and improve the accuracy and security of their transactions

What are your thoughts about converting deal confirmations to a digital format and do you believe that they would bring about the efficiencies as benefits as described above?

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