Looking beyond technology to drive sales operations
“Do
more for less.” If there were a tagline for sales in
the past couple of years, that might be it.
Fueling the next wave of revenue and
profit growth is a top priority for many sales leaders. As companies scale,
however, traditional methods, such as adding more front-line sellers to expand
account coverage or overlay sales capacity, often yield diminishing returns and
are simply not practical in many resource-constrained industries. Sales leaders
are simply expected to do more with less, in most cases.
At the same time, new trends are forcing
sales leaders to rethink how they sell. Customers used to the simple purchase
processes in the B2C world are expecting the same sort of experience with B2B
companies. They’re demanding more self-service capabilities for product
research, trial, and purchase, for example. Given that so much is available
online, customers also have a higher bar for the depth of technical expertise
on products and services that solution vendors bring.
Enter sales operations. A strong
sales-operations function can address these issues and drive revenue growth by
reducing the time reps spend on various administrative tasks, speeding up the
sales process, and improving the experience for the customer. As McKinsey’s
recent edition of its book Sales Growth: Five Proven Strategies from the World’s Sales Leaders highlights, focusing on
process re-engineering, automation,
and optimization of sales-support resources can also dramatically reduce the
cost of sales.
In our experience, companies that build
world-class sales-operations functions can realize one-time improvements of 20
to 30 percent in sales productivity, with sustained annual increases as high as
5 to 10 percent in some cases. Our research also shows that companies that
invest one resource in sales support for every front-line sales resource drive
significantly higher sales productivity than companies that invest less.
Underinvesting in sales-support functions simply shifts the necessary
transaction and administrative work to sellers, taking away time better spent
with customers.
Unfortunately, not many companies have
high-performing sales-operations functions. In our survey of more than 12,000
sales professionals from over 90 companies, we found that the median company
demonstrates best practice on only 40 percent of identified sales-operations
capabilities, and even top-quartile companies demonstrate best practice on only
60 percent. Moreover, while most companies would say that technology is an
important lever in driving sales-performance improvement, our research shows
that only 28 percent of survey respondents are using state-of-the-art sales
technology in their sales-operations functions.
What
good looks like
So what do world-class sales-operations
functions actually look like? These organizations deliver operational
excellence day in and day out as well as being leaders in driving sales
outcomes and change. World-class sales-operations teams consistently achieve
budget, quota, and forecast while maintaining healthy pipelines. They
proactively engage with sales managers and sellers to understand deal status and
recommend actions to increase deal values, accelerate opportunities through the
sales cycle, or improve win rates. And they maintain a tight focus on resource
optimization, making the attraction, development, and retention of key talent a
priority.
In leading companies, a strong
sales-operations function also harnesses data and technology to deliver clear
sales plans and insights that sellers can act on, create predictability and
rigor in sales management, and drive adoption of new selling motions.
There are a wide range of important
capabilities and management practices needed to drive a high-performing
sales-operations program. Technology and automation, for instance, have a core
role. Many companies, however, focus solely on technology investments and neglect
the people, process, and organizational side of the equation.
In our experience, four hallmarks of the
most successful modern sales-operations organizations stand out:
1.
Focus on enabling your sellers
An emerging trend that we are seeing in
several leading sales-operations organizations is the formalization of what
many call a “sales enablement” or “sales effectiveness” role. It can be located
in the corporate HQ and/or field locations and typically focuses on designing
and implementing programs or process improvements that reduce the
non-value-added work for sellers and provide them with insights and services
that improve both the time spent with customers and the effectiveness of their
interactions. These companies often have a very structured methodology for
measuring how sales reps spend their time on customer-facing and administrative
activities, data they use to set process-improvement and IT automation
priorities. Examples of initiatives include account-planning reengineering, CRM
simplification efforts, streamlined bid management, and proposal desks.
One of our clients has gone so far as to
deploy sales-enablement resources in each of their operating geographies to
ensure that local sales managers and individual sellers fully understand upcoming
changes in sales processes and know how to use new sales tools to increase
their individual productivity. When the company recently rolled out a new
standard CRM system, each of the sales-enablement resources conducted
observation sessions to take stock of current practices that might be disrupted
by the new system, held workshops and “brown bag” events in the local
subsidiaries to educate and answer questions, and in some cases sat
side-by-side with reps to make sure they understood the new workflows and
system functionality.
2. Take
a leadership role
What sets the best sales-operations
organizations apart is their influential leadership roles among their peers. In
leading organizations, sales-operations leaders run the weekly, monthly, and
quarterly pipeline, forecast, and business reviews, and hold their peers
accountable for delivering against commitments. They lead account and territory
planning clinics, and drive the annual and quarterly customer-segmentation,
capacity-planning, rostering, and quota-setting processes for their entire
geography or global segment. They harness the power of advanced analytics to
provide deeper business insight that leads to better management decision
making, front-line sales-rep targeting, or customer engagement, often leading
changes in go-to-market models and sales management. In many of these leading
companies, the sales-operations leader acts as the COO of the sales
organization and the right-hand person to the senior sales leader.
Beyond leading the core sales processes to
drive today’s results, world-class sales-operations teams also drive change and
instill a culture of continuous improvement within the sales organization.
Sales-operations leaders understand the company’s strategies and priorities,
translate them into leading indicators, and track them via dashboards and
scorecards to gauge how fast the organization is moving toward new sales
motions, business models, and desired outcomes. They lead the charge in
identifying areas for improvement—such as driving more effective
channel-partner engagement or speeding up deal cycle times—and actively sponsor
new processes and tools to drive consistent adoption of best practices across
the organization. For example, the sales-operations organization at one of our
clients drove the standardization of pipeline reporting across move than 80
subsidiaries, leading to significant optimization of shadow IT expense and
reduction in time wasted by sales leaders in arguing over multiple versions of
the truth.
3.
Create centralized organizations for core functions
As businesses have expanded, so too have
sales operations, though often in an uncoordinated way. Increasingly, our
clients are realizing that having multiple sales-operations groups scattered
across regions and/or business units leads to unsustainable inefficiencies as
well as ineffective sales support. Many are therefore centralizing and
consolidating various aspects of their sales-operations function into regional
or global hubs.
Often we see activities such as proposal
generation, reporting and analytics, and CRM help-desk support centralized into
low-cost labor locations in India, China, or various locations in Southeast
Asia and Eastern Europe to take advantage of the benefits of scale. At one of
our European clients, consolidation of various back-office sales-support
functions reduced the number of FTEs required in those functions by 50 percent.
Leading sales-operations organizations
have a number of common structural attributes. Typically there is one senior
sales-operations VP or GM reporting to the SVP of sales, with responsibility
for global programs, processes, and policies around sales planning, aspects of
transaction support, sales enablement (e.g., CRM processes and systems, training),
performance management (e.g., pipeline and forecasting, reporting and
analytics), and seller motivation (e.g., incentive compensation).
Sales-operations leaders at the region or
country level report either solid- or dotted-line to the central sales-operations
VP/GM and are responsible for executing the standard global sales processes,
managing local seller enablement, and driving implementation of company
transformation initiatives.
4. Set
a high bar for talent
Getting the right talent in place with the
right level of resourcing and empowerment is critical in allowing sales
operations to become a trusted advisor and change leader. Often, sales
operations is perceived as overhead and not resourced at the levels required to
drive continuous improvement programs while simultaneously running the
business. Teams are often staffed with very junior operational talent that is
good at reporting and building analytical models but not at sales leadership,
problem solving and advanced analytics, change management, or coaching.
Leading organizations have a much more
vigorous and focused talent-development program. The leader of sales
operations, for example, is often a high-potential leader in the sales
organization with a proven track record for solving tough problems and driving
execution excellence. Staff within the organization are often former sellers or
sales managers who have opted for either a rotation or a permanent career
change to move into the sales-operations function.
Companies that do this well have an
intentional strategy for moving top talent back and forth between the HQ and
field locations to foster a tight connection between corporate and field and
spur new innovations. Leading organizations also have invested in the type of
analytics and data-science expertise that can rapidly deliver insights to
sellers and sales management for continuous performance improvement over time.
Getting
started
Trying to improve sales operations can
seem complex, intimidating, and time-consuming, which often hampers sales
leaders from even starting. While no one would trivialize the process, there
are a few simple ways to begin. In our experience, in fact, companies can often
score some quick wins early in the process that have a real impact on
performance.
To understand where to focus on your
transformation journey, start by asking yourself and your organization a few
simple questions:
·
How much of your sales resources are in sales-support roles versus
front-line sellers and sales managers?
·
To what degree is your sales-operations function centralized or
dispersed by customer segment, business unit, or region?
·
What are the metrics and reports you use for sales-performance
management activities? How standardized are they, and how often are they
generated centrally?
·
How are sales resources allocated? How are they balanced between
future customer opportunity and current bookings?
·
How much time do your salespeople spend on non-customer-facing
activities (e.g., proposal/quote preparation, researching customer information,
admin) each week?
·
What is the talent profile of people who have joined sales
operations in the past 12 months?
Sales executives are faced with increasing demands to
grow in an environment that is becoming more complex every day. As the pace of
change increases, so does the need to transform and rethink current sales
models, processes, structure, and talent. Companies that successfully transform
are those that invest in and heavily rely on their sales-operations teams to
drive change and fuel continuous sales-productivity improvement over time.
Building a world-class sales-operations team requires long-term commitment, but
having the right capabilities in place can drive superior sales results over
time.
By Bertil Chappuis and Brian Selby
http://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/looking-beyond-technology-to-drive-sales-operations?cid=other-eml-alt-mip-mck-oth-1606
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