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January 11, 2013 in Big Data, Business Analytics, Business Collaboration, Business Intelligence (BI), Business Performance Management (BPM), Cloud Computing, Customer Performance Management (CPM), Financial Performance Management (FPM), Governance, Risk & Compliance (GRC), Information Applications (IA), Information Management (IM), Operational Performance Management (OPM), Sales Performance Management (SPM), Social Media, Workforce Performance Management (WPM) | Tags: CPQ, CRM, Marketing, PIM, Product Information Management, Sales, Sales Compensation, Sales Forecasting, SFA | by Mark Smith | Leave a comment
Most organizations see improving the effectiveness of sales as a way to increase productivity. Those organizations that take advantage of the latest sales applications and technology are finding themselves with a competitive advantage, but many organizations lack the time and resources to assess and deploy appropriate platforms. That’s a shame, since most sales organizations have plenty to improve in their selling, forecasting, incentives and planning according to our latest research on sales performance management. We found a high demand even for many of the basics; for instance, many organizations still use personal spreadsheets or outdated applications that are costly to manage. At the same time, marketing organizations are investing heavily to be more revenue- and sales-focused to ensure they maintain relevance and contribute to their organizations’ performance and profitability. Both sales and marketing have fixated on specific processes and how they can work better together.
Our research agenda for 2013 calls for us to examine how organizations can maximize results through new business technology, adopt dedicated applications designed for sales effectiveness and marketing, and use best practices to be faster, smarter, better and more cost-effective in operating sales.
The top three technology trends in sales are analytics, collaboration and mobility. Together with advancing technologies such as business and social collaboration, they are helping increase the flow of information to help managers coach and increase employees’ learning potential. Mobile technologies such as smartphones and tablets are becoming more common, tied to dedicated sales applications and tools that now become more accessible at any time or any place. We will conduct more research in 2013 on the growth in social and mobile sales to see how early adopters are doing and where the industry is improving with these new technologies. At the same time a lot of new software is available through cloud computing; you can rent and configure the software for your organization, reducing the need for IT resources to implement, deploy and maintain it. Advancements in dedicated sales analytics can help organizations understand performance, and help plan and predict sales, providing a path for increasing optimization and letting users more readily share information with finance and operations. We plan to conduct more research into the next generation of sales analytics and build upon our existing research, making sure that the metrics and plans adapt to the existing economic and industry environment.
Many sales organizations realize that traditional sales force automation is mostly for tracking accounts, contacts and opportunities. In 2012 many SFA providers started to expand to a broader sales performance management platform, with integrated forecasting, collaboration, document management, quotas and territory management. This new focus, along with a rapidly expanding set of dedicated applications that have evolved from sales compensation, can bring better incentives, quotas, territories and analytics. This evolution of sales application suites was evident in our 2012 Value Index for Sales Performance Management.
My personal perspective is that 2013 will be even more competitive. While sales compensation management software has been evolving over the last 15 years, it is still finding its place in increasing numbers of sales organizations. In 2013 we will assess how and where sales should be managing compensation and incentives. Many sales organizations that are still wedded to the use of spreadsheets will come to realize that the use of such outdated software impedes their ability to manage sales effectively. It’s not easy to manage forecasts and pipelines that have specific time series and change level analytics in a spreadsheet; a better approach is to use applications designed for the task, and designed not just for sales operations but for the entire sales team. Our recent research in sales forecasting finds areas of improvement that could have dramatic impact on course-correcting sales activities and moving beyond the probability of sales to the confidence of the forecast, which is probably why forecasting was the top application priority in sales according to 65 percent of sales organizations. Sales is also starting to realize the advantages of using marketing in demand generation processes, which nurtures leads into opportunities and can provide a wealth of information to help sales organizations better engage with prospects.
Sales organizations with limited resources and time need to use best practices and not waste time on technology that’s not ready for deployment or that fails to match up with the competencies of their teams. Interactive social collaboration across sales teams is a better and more effective practice than a myriad of emails. In addition, the use of product information management through all channels of sales and marketing is essential, but our product information management benchmark found significant room for improvement as organizations work to ensure proper representation and highest customer satisfaction. Our assessment of PIM vendors finds many addressing these needs and delivering benefits for sales.
As the configuration, pricing and quote (CPQ) process gets more automated, sales organizations find better consistency in their business processes, including in the fundamentals of contract management. Sales organizations have significant room to improve in supporting non-direct channels and ensuring that data and processes are aligned to the overall sales target. As marketing gets its act together on demand generation, the scoring and qualification of contacts for their true interest through a lead nurturing processes that include behavior, demographic and relevance will help identify the right opportunities for sales to act upon. Sales organizations need to address technology best practices and use analytics and metrics that can be harvested from modeling and planning methods in order to increase the quality of their results. I expect that big data and predictive analytics also will make inroads with innovative sales teams in 2013.
What’s old is still new with sales, and improving upon forecasting, compensation, coaching, collaboration and learning will be job one for those that really want to drive excellence. Applying talent management process with adapting the existing sales team and hiring the right team members, and help ensure that everyone contributes to the business of sales. The rapid increase in the use of smartphones and tablets in sales is leading to a new generation of applications and technology that can better meet sales teams’ needs. I expect to see more reengineering of marketing and sales processes, improving leads and materials and using automation to enhance the quality of leads and move beyond just the process of passing a quantity of useless leads. Finance organizations can also demonstrate their commitment to improvement in sales processes by offering to help argue the business case that delivers the benefits they care most about, which is profitability.
Being more timely and proactive in sales is the mantra for 2013. Those organizations that are prepared to use technology to those ends will be the ones that maximize their potential and retain sales teams that can contribute to financial profitability and customer satisfaction.
CEO & Chief Research Officer
June 27, 2012 in Big Data, Business Analytics, Business Collaboration, Business Mobility, Business Performance Management (BPM), Cloud Computing, Customer Performance Management (CPM), Financial Performance Management (FPM), Governance, Risk & Compliance (GRC), Information Applications (IA), Information Management (IM), IT Performance Management (ITPM), Location Intelligence, Operational Intelligence, Operational Performance Management (OPM), Sales Performance Management (SPM), Social Media, Supply Chain Performance Management (SCPM), Sustainability, Workforce Performance Management (WPM) | Tags: Sales, sales analytics, Sales Forecasting, SFA | by Mark Smith | Leave a comment
It’s clear that sales organizations need to be efficient, but many are unaware of critical applications they could deploy to establish sales excellence. In my recent analysis, “Sales Organizations Need a Swift Technology Kick”, I outlined why sales departments have to look beyond using sales force automation (SFA) and spreadsheets andexamine dedicated applications for improving productivity and effectiveness. Our benchmark research in sales applications found a new set of application priorities in sales organizations that you should assess to determine how well your sales efforts match up to others’. Also, in most cases, we found the prioritization and needs of sales organizations are not aligned, resulting in wasted time and likely creating a lack of access to accurate information for sales management and operations.
The top application priority in 68 percent of sales organizations is forecasting and pipeline management. This should be no surprise, as the pipeline and forecast determine the volume and velocity of sales activities and impact the potential revenue from those activities. But in most organizations, Sales is not efficient in creating the sales pipeline from the sales opportunity records in the SFA application, which can help manage sales on a daily and weekly basis. Managers need to monitor and coach against a pipeline but also protect against bloating or leakage of deals in the pipeline, which can indicate higher than actual revenue potential. From the pipeline, managers can consolidate and analyze a sales forecast for the entire sales organization to determine the potential revenue from sales territories and across customers and products; this is critical information to determine the demand and potential value of customer relationships. We will be benchmarking sales forecasting again in 2012 to update what we have done in past years, evaluating the importance of having a process and dedicated applications to support it, not only for Sales but for Operations and Finance, too.
After the pipeline, the next application priority is sales analytics (in 47 percent of sales organizations), which can provide better insight into sales activities. It requires having the data, metrics and indicators to guide the right actions. Unfortunately, almost half of organizations use spreadsheets for sales analytics, though they admit that the use of them makes it difficult to manage sales. It should be no surprise that 64 percent of sales organizations plan to improve their existing processes to correct the current high level of manual effort. Our benchmark research on sales analytics found that data-related activities are the most time-consuming. Deploying sales analytics applications that reduce the time it takes to get analytics ready is critical, and so is using tools that provide the right types of visualization and interactivity. Many such applications provide a library of performance metrics; but few are advancing to true sales analytics including people, process and risk metrics that can help you perform root-cause analysis and diagnostics. Just having performance metrics and indicators is insufficient to reduce the risk of not achieving your sales potential. Every sales organization should build and use a library of key sales indicators.
As you consider sales analytics, you should also address planning and tracking, which is a priority in 39 percent of sales organizations. What-if and scenario analyses can help determine best paths forward for optimizing sales resources and results which requires some deeper level of modeling and analytic sophistication. And as sales organizations get smarter, they can start to apply advanced methods such as predictive analytics to give better foresight into the future based on current and past behavior.
Collaboration is a priority for 63 percent of sales organizations. This technology has evolved to include social media capabilities, encouraging interaction and knowledge sharing across the Internet. This social collaboration is a way to bring the people and process of sales forecasting and analytics together in a team-based effort. Our benchmark research found that broadcasting, wall posting and application sharing are a few of the top priorities in social collaboration for sales. Collaborative methods can also bring disparate applications to a common point of dialogue across sales forecasting and analytics, involving SFA data that might be used for creating and tracking accounts, contacts and opportunities. Since the forecast and pipeline are potential places for dialogue on ideas for improvement or exploration of new revenue opportunities, social collaboration can help reduce the time to determine the path forward.
If you have not examined the advancements in sales pipeline and forecasting or what is possible with sales analytics, you better get started as your competition is mostly likely already doing so. In my next analysis on sales applications, I will assess the need for key applications such as sales compensation and commissions, territory and coaching. These applications can further increase the confidence of your sales team when they see your organization is committed to help them achieve their full potential. If you are focused on sales excellence and use applications and technology to do so, I look forward to hearing about your efforts, and hearing your suggestions about how our best practices and research can help you be smarter and more engaged with your sales organization!
Mark Smith – CEO & Chief Research Officer