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Investing wisely in sales-related people and processes is a key to business success. In 2012, helping sales staff perform at their highest levels should be a top priority for management. That may take some effort, according to our benchmark research, which indicates that only 14 percent of sales organizations operate at the highest level of innovation and competitiveness. In recent years, most organizations merely discussed moving beyond using only their sales force automation application and Microsoft Office for improving sales efficiency. Now sales organizations can move beyond systems that were designed decades ago, thanks to the availability of a broad range of applications to support sales activities and processes. In fact dozens of new types of sales applications are available to help sales focus on selling, which creates another issue. Where should sales organizations focus their limited resources and budgets?

Ventana Research intends to provide guidance here. We have identified important overall business trends identified, including big data, business analytics, business collaboration, cloud computing, mobile technology and social media; all of these areas offer new competitive opportunities for improving sales efficiency and effectiveness. For example, the use of sales analytics puts 17 percent of sales organizations at the Innovative level of maturity in the Ventana Research Sales Analytics benchmark research. These organizations benefit from daily and weekly metrics about the pipeline and forecasting, quotas and the performance of account reps. As well renting sales applications through cloud computing has become the preferred practice in 41 percent of sales organizations, compared to 25 percent that purchase them in an on-premises, according to the Ventana Research Sales Performance Management benchmark research. In mobile technology, 67 percent of sales staffs use smartphones today, 17 percent use tablets, and 30 percent plan to expand their existing deployments, according to our research. In the area of collaboration, having people broadcast and post their needs to help in the sales process is a top priority in more than one-quarter of sales teams, compared to legacy methods of electronic mail and instant messaging. 

Our upcoming research aims to help your sales organization turn these business technology advancements to your sales advantage. Ventana’s 2012 research agenda on the business of sales will focus on three key areas at the intersection of people, processes, information and technology: improving the potential of the sales organization, establishing dedicated methods to manage sales and accelerating time to sales readiness. 

In the area of improving potential, we will look at the use of social and collaborative technology to coach and guide sales. We will examine the use of mobile applications accessible from smartphones and tablets. And we will assess the use of product information management to help configure deals and price them efficiently. Each of these address the need to improve access for sales to the applications that can help improve the potential of achieving revenue targets.

Establishing dedicated methods to manage sales requires many sales organizations to improve compensation and incentives that influence sales reps’ performance. Sales forecasting was identified as the most important application for 65 percent of sales organizations in our research, yet most are still using spreadsheets, which we found to impede the management of sales. Instead, sales forecasting should be a team-based business process that incorporates management of the pipeline. Sales analytics and metrics can help optimize activities and processes in key management categories including people, performance, process and risk. Our research found that 86 percent of organizations want to have simpler sales analytics, but most struggle with the difficulty of building and maintaining silos of one-off spreadsheets and presentations. Managing sales can be much easier with targeted applications that can assist managers with oversight and guidance.

Finally, accelerating time to sales readiness is important because many organizations perform tasks that take two to 10 times longer than necessary, and they often wait for long periods to get the information they need. Organizations can use SFA as a source of information for the operational and performance needs of sales, but a best practice is to use integration tools. Cloud computing can reduce IT challenges and resources while providing ready access to applications and information. Providing information through mobile and social media also can improve sales readiness and make it easier to respond to sales opportunities. Scattered information was rated as the most significant impediment in 58 percent of sales organizations, indicating the importance of improving the management and use of information.

Our research agenda will examine applications that focus on sales, considering the broad range of analytics, assets, channel, coaching, commission, forecasting, incentives, leads, learning, objectives, performance, pipeline, planning, pricing, promotion, proposal, quoting, quota, reporting, rewards, sales force automation and territory. In addition, our Ventana Research Value Index methodology again will assess vendors and their suites of applications and tools in sales performance management. Our newly released benchmark on sales applications and technology uncovered the priorities of organizations in applications as well as new technology trends, and we have previously released research on sales analyticsbusiness and sales data in the cloud and total compensation management. The next benchmark we’re conducting is in the area of product information management, and it will be followed by sales forecasting

I believe that 2012 will be a critical year for sales operations teams, which have to perform more tasks faster and more effectively than ever before. Only 39 percent of sales organizations have any confidence in their organizations’ ability to manage sales operations and performance, indicating a significant opportunity for improvement. Utilizing new applications and software that can handle analytics and planning for tasks in sales will be essential in helping sales staffs utilize their time efficiently. Simplifying access to applications through mobile technology and enabling sales people to work collaboratively and socially should be key priorities for sales executives. 

Sales cannot overachieve without making investments that target the culture and environment that sales executives want to establish. Our research will help them understand the best practices that can save time and money while reducing the risk of failing to achieve maximum results.

Regards,

Mark Smith – CEO & Chief Research Officer

NICE Systems last week announced an agreement to acquire Merced Systems, a provider of business applications for customer service and sales organizations. This acquisition slipped by with little fanfare, but it marks a significant milestone for NICE, a major provider of applications and technology for call centers and a player in their evolution into multichannel contact centers. Building on a good 2010, as my colleague Richard Snow noted, NICE expects to reach almost $800 million of revenue in 2011, which would make it one of the largest companies in its segment. NICE has made multiple acquisitions to build its software portfolio, including purchases of Actimize, CyberTech, eGlue and others mentioned below. It recently won our 2011 Ventana Research Leadership Award in the contact center category with its customer deployment at Alliance Data. NICE Systems plans to have Merced Systems as a foundation of its enterprise systems and a complement to its contact center workforce optimization offering. This purchase builds on its other acquisitions, including FizzBack recently and IEX and Performix in 2006, which helped NICE establish its customer service and back office agent performance management software. That area has not grown as quickly as NICE would like, mostly due to marketing that was not aggressive enough in attracting customers. NICE recently rebranded its NICE SmartCenter for helping agents, as Richard noted, and is leveraging its assets into the back office, which he also assessed. Our benchmark research on contact center technology found that companies’ priorities for future investments match up well with NICE Systems’ focuses on expanding customer service agent applications and analytics applications.

Merced Systems brings to the deal a strong foundation based on analytics and metrics: areas we have benchmarked in the contact center and sales among others. While software for customer service and contact centers motivated this acquisition, NICE Systems plans to expand into sales organizations through Merced’s sales performance management. In agent performance management NICE and eight competitors all have comparable ratings in our Value Index for Agent Performance Management. NICE is rated near the top, but it has struggled in its marketing and sales. This is part of why it needs to retain Merced’s team to continue its market momentum. On the sales side, with a smaller number of dedicated providers, Merced ranked in the middle of the Value Index for Sales Performance Management but is part of a significantly larger organization worldwide with access to a large number of organizations using NICE.

Customers of Merced Systems should look for affirmation that NICE Systems will include their needs in its product roadmap before they make further purchases and deployments. They should look for continued operations of Merced as an entity and availability of its applications. Potential purchasers should restrain themselves to ensure the Merced products they are examining are part of the future NICE enterprise portfolio as the company evolves its application architecture. Existing NICE customers will find a new portfolio in agent performance management and sales performance management, which appear to put NICE’s existing performance management applications at risk or position them to receive lower priority. On another front it will be interesting to see if NICE will continue distributing Merced Systems’ new analytics offering built on an OEM of MicroStrategy, with which the company has built applications that also operate on smartphones and tablets.

NICE Systems made a wise investment in acquiring Merced Systems, especially at the price it paid (approximately $150 million and $20 million in cash), considering the company’s profitability, growth, products and customer success. Now NICE must retain Merced’s key people and grow its investment in the newly acquired company. NICE can extend its current reach to grow its business significantly, pending effective investments in marketing and sales. 

Regards,

Mark Smith – CEO & Chief Research Officer

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