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All lines of business are under pressure to meet targets and deliver expected results, but none is under more pressure than Sales. Like other organizations it must use information to derive insights about progress and problems and to decide what changes to make. Today businesses collect and analyze data from more data sources in more forms than ever before. To understand it they need effective analytics, and again none need it more than Sales.

Analytics applied to sales data can deliver significant value. VentanaResearch_NGSA_BenchmarkResearchIt can help sales organizations reach quotas, forecast more accurately and make better decisions about activities and strategy. However, selecting the right tools for analytics can be difficult. People charged with identifying those tools often don’t understand the specific needs of sales groups or the full scope of evaluation criteria required for successful deployment and use.

In the past, and often still today, many sales organizations did not invest directly in analytics, instead using desktop spreadsheets, cutting data and charts from applications and reports and pasting it into presentations. In addition organizations have tried to stretch applications designed for other purposes, such as sales force automation (SFA) and customer relationship management (CRM), to provide reports on accounts and opportunities, but these systems address only some sales activities and lack complete information about customers. They need more purpose-built tools to examine sales performance in core processes such as the sales pipeline, forecasts, configuration pricing and quoting, proposals, quotas, compensation and incentives, and coaching of personnel. Used properly analytics can provide insights on all of these. But to select tools that cover all these areas, prospective users of sales analytics must be able to understand the available options and identify the capabilities that will serve them best. Should they be simple or complex? One-time or continuously used? Historical or forward-looking? In addition the tools should be easy to use and able to make data readily available. Several of our benchmark research studies demonstrate the need for effective analytics in this critical business area of sales.

The expanding use of sales analytics stems from increased attention to performance across sales processes (particularly because of the importance of sales in revenue and financial planning to meet customer demand with products and services). In sales planning, the need for quick analysis and review of actuals vs. plan is the management capability most often important (for 73%) for organizations participating in our next-generation business planning benchmark research. Many sales initiatives have failed to live up to their potential because companies did not use the right analytics tools and approaches to plan and operate them. For example, measuring the wrong things, measuring the right things the wrong way or using only partial data to measure will have negative (and often unintended) consequences. That’s because sales decisions almost always must be made in a constrained environment, in which virtually every important decision requires trade-offs (such as price against volume). To be useful, analytics must recognize trade-offs and provide guidance to help decision-makers choose those that are aligned not only with the company’s overall objectives but also with its customer, financial and sales profitability goals. Sales analytics also can support new approaches such as sales contests and gamification that motivate employees to perform better.

Analytics also is a key tool for devising, tracking and revising measures and metrics for sales processes that enable managers to make better-informed decisions faster and more consistently. Sales operations managers and executives need advice on selecting the analytics most useful for them and choosing sales metrics and performance indicators. This applies to the various kinds of analytics that sales organizations need. For example, our research finds that analytics is a priority for sales compensation management, where it is the top technology trend in 84 percent of organizations, and for sales forecasting (in 79% of organizations).

At this level of complexity sales organizations cannot continue to make do with outmoded tools. While spreadsheets are comfortable and familiar, when used for collaborative enterprise tasks they fall short in many areas such as lacking control of calculations and introducing inconsistent or erroneous data. Our research in sales compensation management finds that those that use them universally for this purpose are not satisfied with their analytics tools more often (in more than two-thirds of organizations) than those that use more capable tools.

A new generation of technologies offers more powerful and flexible sales analytics. Big data systems for processing and storing data have evolved quickly, making it possible for sales organizations to extract insights from masses of data for practical purposes. For example, visual discovery can present data in quickly graspable forms, and simplifying the presentation of key sales indicators and metrics in dashboards can put necessary information at the fingertips of nontechnical executives and managers. Advances in mobile technology enable access to analytics from smartphones and tablets, helping users on the go decide what to do next. Making sales applications and data available through cloud computing also facilitates access to and use of sales analytics. In addition collaboration enables sales teams to communicate and coordinate operations and managers and sales reps to plan more effectively. And predictive analytics enables users to look forward to anticipate trends and plan ahead rather than merely react.

Analyzing these advances and their impacts on sales organizations now and in the near future, we have released new benchmark research on the next generation of sales analytics. It examines the use of and intentions for analytics and metrics involved in sales-related activities. It uses the Ventana Research Performance Index Model® to assess the productivity and performance of organizations by size and industry. A major aim of this research is to provide understanding of the need for and potential of advanced tools to help set a business case for investing in sales analytics. It assesses the impacts of these next-generation technologies in facilitating faster, easier and broader use of sales analytics. It follows up on previous research that shows that inconsistent execution and scattered information continue to motivate investment in about half of sales organizations and explores how advanced analytics can help remedy these issues.

Our mission in this new research is to uncover the best vr_SF12_07_impediments_in_sales_motivate_investmentpractices companies use in measuring the performance of sales-related activities, the challenges they face and how they intend to improve their situations in the coming years. Sales analytics is a required component for any successful use of SFA to applications and activities individually or as part of sales performance management. It examines in detail issues in collecting data from a diverse set of sources that are critical for creating and maintaining useful sales metrics and indicators. It explores how data sources are reconciled through data preparation and then analyzed to produce the information sales people require to support decisions that impact their bottom line, market share and other aspects of their strategic objectives. Increasing the accuracy, confidence and timeliness of sales analytics is critical to every activity in sales, and those without a dedicated approach designed to assist sales will find themselves at a disadvantage. Sales analytics is a key resource for sales organizations facing today’s unprecedented challenges, as I recently outlined in our Sales Research Agenda for 2015. If you are responsible for sales activities or systems and want to see where the present and the future lie, please consult our research on the next generation of sales analytics.

Regards,

Mark

CEO and Chief Research Officer

It should be no surprise for those who work in sales that increasing outcomes collectively is not always easy. Sales teams and individuals work under pressure to perform at high levels,VRValueIndexLogo selling more than they did in the previous period or more than the person who previously had responsibility for a territory. Today’s economic and competitive environments demand that everyone work not just faster but smarter in their sales efforts. To excel in this environment requires not just wise use of time but prioritization of the activities and tasks that contribute to achieving the quota and forecast. In the past, sales organizations often resisted adopting new technology, but it’s time for them to realize that tools are available to facilitate better sales performance. As I outlined in the overview of our business and technology research agenda for this year, the sales department has a ripe opportunity to get smarter in how it operates. This is the essential point of our research practice in sales applications and technology: Our methodical benchmark research examines applications and technology best practices and benefits for sales organizations, and we assess the vendors and products in this market through our Value Index ratings. We will start 2014 with the latest release of our Value Index on Sales Performance Management, which will help sales management evaluate products to assist in improving performance of the organization.

Technology advances in sales applications and technology in the last several years have given those who use them an advantage. vr_SF12_10_reliance_on_spreadsheets_undermines_efficiencyFor example, mobile technology enables sales organizations to quickly access metrics from sales analytics; these can be shared to help the whole team meet their objectives. But these improvements first require willingness to change, to go beyond the conventional wisdom of using sales force automation (SFA) for more than defining and tracking accounts, contacts and opportunities. Those who continue to use spreadsheets to manage sales performance will be even less efficient and fall further behind those who use more capable tools. Our latest benchmark research in sales forecasting shows that more than half (59%) still use spreadsheets to manage sales forecasts; doing so wastes time and prevents immediate access to critical information. It also finds that the process is not reliable and data is not accurate in more than half of organizations.

The imperative to provide the best possible customer experience, which my colleague Richard Snow outlines in his customer engagement agenda, indirectly impacts sales. Both require high-quality and relevant product information whether it comes from sales interactions, e-commerce or websites. Both customer service and sales can benefit from the organization creating a single repository of all product information managed centrally. Tools for product information management (PIM) utilize master data management methods that enable product teams in businesses to define, administer and publish this critical information to those who need it, including Sales. Our research shows that the use of dedicated PIM technology has helped almost half (47%) of organizations  eliminate errors and mistakes and that 90 percent of those that use a single system gain competitive advantage through faster time to market. This year a significant transformation of where PIM and commerce software will converge further to help provide the information in the shape and form required even as it is required across smartphones and tablets. Our new Value Index on Product Information Management for 2014 will assess progress of vendors and their investments in products to help you determine which ones can best meet your needs.

Just as quality information is critical, so is the ability to use analytics to build metrics that can provide immediate visibility into the progress of sales. Depending on periodic reports and dashboards doesn’t work in the accelerated pace of business today. Mature organizations are using predictive analytics and data mining of big data repositories to extract previously inaccessible insights; this can be critical for large sales organizations that sell large volumes of products. We will assess the advances in sales analytics in a new benchmark to determine how they have facilitated change in sales operations and increased efficiency in their processes. We already found in 2013 through our benchmark research in location analytics are helping provide a competitive edge on the ability to sell effectively in a territory but also how they are designed and optimized to achieve specific quotas. A new generation of sales analytics are advancing and accessible through mobile technology. In addition our 2014 Value Index in Mobile Business Intelligence assessed 16 vendors of business intelligence tools on their ability to provide best in class accessibility through across smartphones and tablets.

These advances and others provide for sales organizations a variety of applications and tools that can be used by sales executives, management, operations managers and account representatives. Sales organizations also need improvement in other areas including learning and coaching, compensation and incentives, forecasting, setting objectives, activity tracking, recognition and rewards. In 2014 we will conduct new research on next-generation technologies such as social collaboration for coaching and improving skills and on mobile devices to track and assess sales efforts. Better use of coaching and playbooks can help everyone in sales find and apply best practices or the right sales assets to use in communicating with prospects. On another front, industry pundits and vendors are buzzing about gamification in motivating sales, this is nothing new, and there are practical ways of having contests and leader boards for the sales team or individual quotas.  

Our new benchmark research coming out in 2014 examines the automation of compensation plans and incentives for sales. New vr_SF12_07_impediments_in_sales_motivate_investmenttools make them readily accessible at any time to help sales reps and managers determine progress toward targets; these offer an automated way to escape the silos of spreadsheets and documents. We will also assess the state of vendors and products in the Value Index for Sales Compensation in 2014. In a related area it is also critical to optimize the effectiveness of sales quotas and align them to territory management, which can help maximize the potential of sales organizations. Also marketing and sales can align their efforts through use of demand generation to ensure the tracking of inbound and outbound marketing feeds into business processes through nurturing of dialogue and interactions. And in 2013 we saw significant improvement to integrate configuration, pricing and quote (CPQ) management into the deal process and the SFA aspects of opportunities.

I’ll say again that all of this change means we cannot depend on conventional wisdom that says you can just use SFA and personal productivity tools to understand and improve sales performance. Our research has found that impediments such as inconsistent execution (53%), scattered information (48%) and limited visibility (42%) are motivating technology investments. Analytics help to develop metrics for performance and planning, and the use of big data to mine and harvest information assets, can help. Moving to applications that automate interaction among sales teams can help achieve a common set of goals.

Our benchmark research in various aspects of sales continues toVentana_Research_Benchmark_Research_Logo find significant opportunities for organizational improvement through better tools. Applications are easier to access and use from the cloud or on mobile technology. Dedicated software can help interconnect sales with the other lines of business. For example, a dedicated approach to sales and operations planning can help ensure that the forecast and planning process connects sales, operations and finance. In the area of talent management that my colleague covers that can enhance the range of key employees activities for sales including recruiting, onboarding to learning, performance and career planning, which can be done more effectively through collaboration between sales and HR. Many providers of sales applications are beginning to advance in this area to directly help sales be as efficient as possible.

Making sales people and processes more efficient and effective in using technology built for its particular purposes is critical to ensure the best outcomes. Sales will need to think beyond conventional wisdom and examine what is needed to be effective from sales management, manager and operations but also down to how help every account manager be as efficient as possible. Sales should also explore building alliances with finance and IT to see where faster investments can accelerate the potential to achieve the sales targets and revenue expectations of the organization. Use our sales-related research and assessments of applications and technology across vendors to learn where your opportunities may lie.

Regards,

Mark Smith

CEO & Chief Research Officer

Mark Smith – Twitter

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