Achieving High Performance by Transforming Sales Operations

Many corporate leaders have been trying to meet the challenge to generate growth and improve sales effectiveness by focusing on process improvements, cost reductions, sales tools and training. However, for most, sales results are not paying back the investment in improvement initiatives. Our research and experience points to the fact that many companies are devoting inadequate attention and resources to their sales operations—the processes, infrastructure and administrative support that underpin everything a sales organization and its people do.

Transforming sales operations can result in improved sales performance and increased margin optimization. Companies can realize comprehensive benefits by improving sales operations: reduced expenses, an increased rate of sales, more repeat sales and improved margin optimization.

Gasping for air: What's putting the squeeze on sales operations?
Why is the operational dimension so critical to achieving high performance through sales effectiveness? Operations serves as the vital two-way conduit between the customer and the rest of the organization. It's the essential layer that enables activities such as placing the order and working with finance, accounting and legal. It's directly responsible for managing the enterprise through the salesperson to the customer, as well as from the customer to the salesperson and back into the enterprise. Unfortunately, back-office cost reductions have left sales organizations gasping for air from an operational perspective: Not enough hours in the day to meet sales quotas; too much time spent on administrative tasks and not enough time spent actually selling.

Here are some indicators that all is not well with the typical company's sales operations:

• Not enough selling time
  The percentage of time a sales person has to actually engage in selling has fallen over the past two years—from 48 percent to less than 36 percent. That means that almost two-thirds of a sales person's week is spent doing something other than selling.
  
  
• Processes out of alignment
  At a time when competition is intensifying and the complexities of the selling environment are rising, companies cannot expect to achieve high performance if they cannot address internal misalignments and get their sales processes aligned to their customers' buying processes.
  
  
• A rise in "shadow accounting"
  In the absence of reliable, detailed reporting on commission payments, sales professionals lose trust in the compensation system and create their own individualized "shadow accounting" processes—most often an automated spreadsheet or other tool they use to verify the accuracy of their paychecks and incentive payouts. While it might seem no harm is done with such a process, in fact it can be a drain on performance and productivity.
  
  
• Customer churn
  An important factor behind churn problems is raising customer expectations. Because of the availability of information, a sales representative is now usually speaking with a customer highly informed about products, pricing and emerging technologies. The operations of the sales organization must be capable of helping the sales force meet these rising customer expectations. If a company's existing sales processes and operational capabilities are impeding utilization, then the return on investments in the sales organization will be slim.

Accenture believes that a transformation initiative with the goal of driving high performance through reengineered sales operations should proceed according to the following general steps:

• Diagnose current sales operations spending and capabilities
  The first step is a detailed analysis of where money is being spent and on what in the operation organization, and what capabilities are in place compared to a best-case scenario. Companies often have inadequate visibility into how much they are spending on sales operations because the various related activities are splintered across other functions such as finance, IT and supply chain. Executives see the budget numbers at the aggregate level, but may not adequately understand where spending is redundant or broken at the process level. Part of the diagnostic involves examining sales operations from a detailed process and subprocess level. When companies develop a more detailed understanding of their pain points within those processes, and a sense of where their money is currently being invested, they can focus their investments and more quickly improve their sales effectiveness.
  
  
• Consider "core" vs. "context" processes
  A critical step in getting a handle on the operations needed to support a sales team is to consider what we call "core" sales operations activities versus those more appropriately considered as "context." Core functions such as the sales advisory role, customer solution support, contract initiation and reporting should be retained. Context activities such as quotes, credit approvals, contract development and order management can be done effectively and at less cost by pulling them out into a shared service center.
  
  
• Tailoring a set of sales operations transformational programs to strategic goals and existing capabilities
  Companies can then design a transformational program right for them. Whether or not a company chooses a shared services or outsourcing solution as part of sales operations transformation, companies will still reap the benefits of standardized, modularized and consistent processes.
  
  
• Achieving high performance in a complex selling environment
  High-performance businesses know how to transform simultaneously along two dimensions: They can improve their company's ability to meet short-term quarterly expectations, even as they are reengineering on the fly to support future plans.
  
  

Transforming sales operations can result in improved sales performance and increased margin optimization. Companies can realize comprehensive benefits by improving sales operations: reduced expenses, an increased rate of sales, more repeat sales and improved margin optimization.