Mark Smith's Analyst Perspectives

The Agenda to Innovate and Maximize Revenue in Sales for 2011

Posted by Mark Smith on Apr 18, 2011 8:52:29 AM

The potential of any sales organization is measured by the people and the methods and technologies they use to sell products and services efficiently. Unfortunately, many organizations today still have not embraced new opportunities to improve the productivity and outcomes of their sales teams.

It will shock no one to hear that the number-one investment priority of the sales organization, according to our sales analytics and performance management benchmark research, is increasing revenue. That, after all, is what Sales does. Unfortunately, most in sales continue to do their business the way they always have, which is in most cases is not the best way. It’s been all too easy over the last decade to simply follow along the incremental technology evolution in sales force automation (SFA) and its absorption into CRM. But this one-foot-in-front-of-the-other approach has prevented many organizations from examining more discontinuous improvements that can yield dramatic results.

Many of these potential investments are built on what Ventana Research has identified as the five business technology innovations of the decade about which I recently wrote: collaboration, mobility, analytics, cloud computing and social media. Each is having a dramatic impact on the operations of Sales; combined they will have a seismic impact on sales effectiveness.

Until recently Sales has operated with limited technology support, entering accounts, contacts and opportunities in SFA and relying on personal productivity tools – email, spreadsheets, presentation software and word processing – like those found in Microsoft Office. these are tools that were innovations in the late ‘80s that have been improved incrementally every couple of years. While some sales organizations have adopted other critical advancements ranging from compensation to forecasting, that adoption has been limited.

In particular, it has not been until recently that we have seen true support for sales applications on mobile devices – the smartphones and tablets that can make the life of a sales team so much simpler. These mobility advancements from Apple, RIM, Google with Android, Microsoft and even HP have brought new potential for sales personnel to engage with their prospects and more easily update and collaborate with others on the sales team. The integration of collaboration technology within sales applications now makes it possible for sales teams not only to get answers to questions but also to access key information about products and services, prices and contracts.

The combination of social media and networking tools that most people are already familiar with as consumers in environments such as Facebook, LinkedIn, Twitter and others – in essence, a combination of mobility and collaboration – is providing fresh ideas and leading to new tools for sales. The simplicity of social media provides a fresh perspective for what is needed to optimize sales processes. Not so incidentally, we have identified these advancements in business mobility and business collaboration as areas for new benchmark research in 2011, enabling us to investigate the experience of early adopters and lessons learned while getting a better handle on sales organizations’ current plans.

Sales organizations also need better insight into both their operations and their outcomes – a job for analytics. New focused tools can deliver critical sales measures and metrics that can be used to develop sales indicators. More advanced sales operations teams have moved beyond the ”provide a dashboard and solve all problems” approach and have developed a library of sales metrics that can be used to create people, process, performance, risk and other key indicators to guide the decision-making of sales executives and management as well as individual sales reps. These sales analytics can be used within any application or tool and by individuals with varying levels of skills to review and analyze.

Our recent benchmark research in sales analytics found that this is emerging as a key area for investment; already 17 percent of organizations have reached the highest of our four levels of maturity and so are ranked as Innovative in their deployment and use of sales analytics. But there remains much room to improve: Fully 86 percent of sales organizations want to simplify their current processes and technology for generating a range of key process and financial metrics, among them forecast accuracy and revenue growth. Unfortunately, more than two-thirds are using spreadsheets to perform analytics, which means they’re using a tool that was identified by more than half of sales organizations as making analytics hard to build and maintain and also one that inherently creates silos of data and presentations.

A new category, sales performance management has blossomed in the last five years. It addresses the management of sales compensation and incentives, but also includes complementary applications to make sales operations and individuals easier to manage and optimize. According to our blueprint for sales performance management there are more than 24 sales activities and processes that can be improved through the use of applications and technology. We also have assessed technology suppliers and products for support sales performance management in our 2011 Value Index for Sales Performance Management.  Investments in applications to manage sales compensation, territory management, incentives and other areas have already paid dividends to the organizations that have deployed them. Sales performance management can also encompass recent advances in sales pipeline-to-forecast management, coaching and learning to improve the value of sales talent, and the use of configure, price and quote (CPQ) technology to standardize offer, price and booking and improve the consistency of sales assets and playbooks. These all complement existing SFA and CRM investments to yield a new portfolio of technology that in today’s world should be available via mobility technologies. With these sales performance management tools available as and wherever needed, the sales organization can look at what it can do to provide the rest of the enterprise with all required information and to integrate with marketing, customer, operations, product and services organizations.

Unfortunately, technology traditionally has had a built-in time lag. Sales organizations may see many ”cool” new technologies that will support and improve their sales activities, but they soon find out that it will take two years for their IT organization to implement and deploy them. This has been one of the largest inhibitors to new technology adoption. Recently, though, sales organizations have begun to indicate that they prefer new more rapid methods for accessing sales applications and technology, including cloud computing-based software as a service and hosted approaches. In fact, in our recent research only 33 percent preferred the traditional on-premises approach of purchasing and installing over the other approaches. This ability to quickly get the latest technology to support key sales activities is essential to keep the focus on rapid time-to-value in technology investments. Sticking with the traditional approach of just accepting the major CRM or SFA upgrade every two to three years increases the risk that sales will not achieve its critical revenue and customer objectives.

In the area of sales performance management, our 2011 research agenda thus is focused on three areas: improving collaboration as a way to boost efficiency in sales organizations, utilizing sales talent effectively and enhancing the value of sales across the organization.

Collaboration across sales teams, which involves far more than just talking and emailing, is essential to ensure continuity and the realization of the maximum potential of Sales. Collaboration on sales forecasting was found in our research to be important for more than half (58%) of organizations. Doing collaboration across sales teams right will require the adoption of mobile technologies that are more usable and flexible than many of the current corporate standbys, and so we watch with interest the advancement of the Apple iPhone and the emergence of the new RIM Playbook mobile tablet among many others. With mobile platforms available, many sales organizations are improving productivity by using location-relevant information to optimize matters ranging from drive time and proximity to clients to the quota potential of accounts and territories.

The sales research agenda for 2011 also emphasizes utilizing sales talent effectively. This may seem obvious, but many sales organizations still have not retrofitted their compensation, incentive-, rewards-, learning- and coaching-related activities to use applications that were designed to improve the performance of sales talent. Doing this also requires establishing the capability to share documents and information electronically across social media as well as learning management systems that can replace outdated training methods. In fact our sales performance management benchmark research found that more than half (51%) of organizations believe scattered information undercuts the efficiency of sales processes. Moreover, ensuring the performance of sales talent requires that steps be taken to establish credibility with the sales organization by improving the timeliness and accuracy of sales compensation and incentives. The less time that is spent dealing with commission and reward disputes caused by miscalculations in spreadsheets or with misunderstandings caused by poorly documented plans, the more that can be spent on selling. Automating sales compensation in essence becomes a tool to recruit and retain sales talent. Knowing where to focus and what to improve within the sales organization and its processes improvement requires great sales analytics.

Finally, increasing the value of Sales across the entire organizations requires an initiative that applies continuous improvement to sales processes. Indeed, this is what sales performance management is all about: It examines all operational and performance-related activities that contribute to the focus on revenue and customers. Our research for 2011 will produce findings on the importance of sales performance management that will help educate executives and managers and guide new investments. It will quantify the value of specific activities like sales pipeline, forecasting and planning management for direct and channel sales that are built on robust modeling and analytics using quality data from an array of sources. Our benchmark research in sales forecasting found that only one-third of organizations achieve 81 percent or better accuracy in sales forecasts and that less than a third (31%) tie performance rewards to sales forecast accuracy. This focus on improving revenue-related processes will be appreciated by the marketing and finance organizations that help support and are dependent on the outcomes of sales efforts. Finance is also important to Sales as it has proven to be a source of funding investments into applications that provide better visibility and accounting of sales activities. But doing so requires that sales organizations use enterprise-class applications, which silos of spreadsheets and documents are not.

These three areas of focus for our 2011 research agenda in sales will yield findings that will help improve the efficiency and revenue potential of Sales. Doing this requires that its business technology maturity improve dramatically and that progress follow a new blueprint and framework rather than the business-as-usual model of either believing the existing SFA system will address all the many issues or that IT has it all taken care of. We recommend doing a simple self-assessment of existing sales processes and the applications and tools supporting them to determine where investments should be made. This can be followed by both general and industry-specific benchmarking of approaches to sales organization improvements to ensure that you are not just incrementing the status quo but are finding significant ways to outperform the competition. Be sure to explore as part of the process using cloud computing and mobile technologies. Sales improvement also will require collaboration with Finance, Operations and Marketing to help make sales operate more smoothly and effectively across the entire organization.


Mark Smith – CEO & EVP Research

Topics: Sales, Social Media, Marketing, Operational Performance Management (OPM), Revenue Performance, Sales Force Automation, Business Analytics, Business Collaboration, Business Intelligence, Business Mobility, Cloud Computing, Governance, Risk & Compliance (GRC), Location Intelligence, Operational Intelligence, Business Performance Management (BPM), CFO, CMO, CRM, Customer Performance Management (CPM), Financial Performance Management (FPM), Information Applications (IA), Information Management (IM), IT Performance Management (ITPM), Sales Performance Management, Sales Performance Management (SPM), SFA, Supply Chain Performance Management (SCPM), Workforce Performance Management (WPM)

Mark Smith

Written by Mark Smith

Mark is responsible for the overall direction of Ventana Research and drives the global research agenda covering both business and technology areas. He defined the blueprint for Information Management and Performance Management as the linking together of people, processes, information and technology across organizations to drive effective results. Mark is an expert in technology for business from Performance Management, Business Intelligence, Analytics to Information Management across finance, operations and IT. Mark has held CMO, product development and research roles at companies such as SAP, META Group, Oracle and IRI Software. He has experience across major industries including banking, consumer products, food and beverage, insurance, manufacturing, pharmaceutical and retail and consumer services.