Lauren Kelley: The Shifting Role of Sales Ops

I spent about 25 years building up some fairly large businesses. I’ve run sales organizations and I’ve had sales ops reporting to me directly. I built OPEXEngine because I believe strongly in the data-driven enterprise and because data helps you make better decisions.

It’s impossible not to be passionate about using good data to improve your sales performance. With better insights into the data, you can shorten sales cycles, help improve overall sales productivity, and forecast revenue more accurately. Sales ops should be the hub for driving consistency. When the sales process becomes more consistent, management has more confidence in results and that has myriad benefits for the company. The good news is that with the right tools, personnel and management focus, it isn’t that hard to do.

In the pre-Cloud days, sales ops was mostly used to administer compensation plans. Companies didn’t have very good raw data or analytical tools to understand their own processes like funnel management or forecasting. If you asked most VP Sales how long their sales cycle was, you’d generally get an informed guess “about 6 months.” Similarly, if you wanted to know how long it took to ramp the average new sales person, the VP of Sales probably had a seat-of-the-pants answer like, “Oh, it takes about 8 months to ramp a new rep.”

Over the past 10-15 years, companies have gotten better and better about tracking their own data by using and maintaining CRM systems. Today, sales ops has more data to work with and management knows better how to use that data. Sales ops can deliver analysis on where there are problems in converting leads to customers, analyze weaknesses in the sales force, test incentive programs, and forecast bookings and revenues with great accuracy.

Companies are even starting to use the data for predictive sales. Not just predicting your forecast, but defining the characteristics of the customers most likely to close quickly, the customers most likely to renew and most likely to expand.

When sales ops is helping sales deliver more revenue, faster and more efficiently, it is no longer just an overhead expense to manage sales compensation.

Traditionally, sales ops has always sat in sales. This came at a time when organizations were typically run by siloed management — sales ran sales, and marketing ran marketing, and so on. That made sense, especially when sales ops was managing sales compensation plans and owned the forecast, because sales had the data.

Nowadays, these systems are all integrated. The SaaS model has many more moving pieces than a traditional product sales model. Those moving pieces need to be coordinated and you need to have one source of truth in terms of what the numbers are, so that the pipeline, the forecast, the billing, the invoicing, and the cash of the company are all coming from one source of data.

Then it becomes a question of where should sales ops sit? Who owns the systems and who’s best to administer them and pull the data out? There’s so much more data to deal with and there’s so much more cleaning of the data and analyzing of the data than before. When you consider it from that perspective, most sales organizations would rather focus on their key competency, which is sales and sales management, and let someone else manage the data analysis.

Finance typically has the experience to manage analytical people and has access to all the raw data. So you’re seeing more and more companies transfer or start up this sales ops function within the finance organization. But that’s not to say that it should be siloed within finance — obviously it’s very tightly integrated with the sales organization. Finance should manage sales ops to serve the sales organization with better information and better analysis in order to grow the company. The sales organization can then spend their time acting on the data, rather than trying to put it together. And while finance is putting the data and analysis together, sales can focus on selling.

I think it expands the role. However, it can give rise to concern on the part of sales that this role is being taken away. Sales, in a sense, is losing control over sales compensation, which is obviously a big deal in the sales world. People perceive finance as wanting to cut costs, and that can give rise to worries that they’re not going to understand the need to compensate salespeople for the work they’re doing. Finance needs to approach the management of sales ops as a way to help sales achieve more revenue, rather than as a way to cut costs in sales.

Obviously, it all depends on how the transition is managed. The CFO and VP Sales need to work together collaboratively and focus on the growth of the company. Sales ops management should do everything possible to support sales management’s use of the data.

Start-ups and early stage companies are all about figuring out the target customer and a repeatable sales process. Sales ops at this stage needs to support these goals. You don’t want to boil the ocean when you have small revenues to figure out that starfish can have up to 23 legs. At a later stage, when a company has achieved some momentum and run rate, there’s more data and more opportunity to fine tune the sales process. Plus, with more data, sales ops will spend a lot of time just cleaning the databases and making sure that the company has good processes for keeping the data clean.

Sales management hasn’t always prioritized cleaning data when they are under daily pressure to make sales. Whereas finance is used to making sure that data is clean or the books wouldn’t get closed. So as companies get bigger and bigger with more and more at stake, that’s just another reason why it makes sense for sales ops to sit inside Finance.

In terms of different industries, I can’t really speak for industries outside of the tech industry. The tech industry is very much influenced by the expansion of the SaaS business model. And again, SaaS is a numbers-driven business with many levers across the business impacting results. Because of that, the SaaS model requires a more collaborative management style among the various departments.

I think any company with a sales organization of more than 10 sales professionals should have sales ops, but in the early days, you can leverage other resources. Can someone in finance do it as a part time role? Depending on how fast the company is growing and how clean your funnel and the funnel data are, it is hard to imagine not having a dedicated function soon after hitting 10 sales people.

First and foremost, spend as much time as you can getting to know your colleagues and your peers in sales, in finance and in marketing, because you’re sitting at the confluence of those three organizations. Depending on the model of your company, you may also spend time with customer success, customer support, and professional services.  Talk to those colleagues and don’t just email them.

This helps makes sure that you are not just focused on the numbers, but really understand what the other departments need to do their jobs better. As a sales ops professional, it’s your job to help them. As you spend time with the managers of those departments to understand how you can help them use the data better, find out a few things:

• How can you present the data better?
• What kind of reports do they need?
• What are their biggest challenges?
• What metrics will help them most?

Ultimately, sales ops should drive consistency in the sales process and among sales reps. A new sales ops professional should focus on driving consistency and if they do that, they will be successful.

Having a very clearly laid out role and deliverables is important for any job function. It is also basic good management to regularly review expectations for a role and evolve. A good sales ops person should prioritize efficiency. You should look at the process and the workflow today, and figure out ways to make that process more efficient tomorrow. Any time spent creating efficiencies is absolutely worth it.

The biggest difference is whether you’re building the role from the ground up, coming in as the first person to build the sales ops function in a company vs. taking over an existing sales ops role. If you’re joining an existing team, take time to understand how things are being done today and then try and figure out how you can make it easier, more automated, and cleaner. Make sure you’re not burning out your audience with too much reporting that will quickly become meaningless. The whole point is always to think about how you can drive change and help improve the company’s position and performance.

You have to start with the end goal in mind. The goal is to help the company grow and sales ops is in a terrific position to do that. Sales ops can help senior management have greater confidence in the sales process by helping the sales organization evolve towards more consistency in activities and results. Sales ops can help sales management decrease sale cycles, improve their lead conversion rates, reduce the cost of customer acquisition, and make the sales organization more tightly incentivized to the goals of the company. You can drive a lot of that by studying benchmarks of successful peer organizations, and bringing that credible justification to the C-suite. They will be very happy because that’s exactly what they’re looking for. The goal of leadership is to grow revenue, build the asset of the company, and be more efficient while doing it — and sales ops, again, is in a great position to support those goals.

I think sales ops will become more iterative, delivering an analysis feedback loop to sales to help sales iterate on the sales process and constantly improve. Just like development has moved to agile development, sales will become more agile about fine tuning its assumptions and processes based on data provided by sales ops.   In addition, sales ops will continue to develop greater capabilities to do predictive analysis for sales and marketing. By applying basic statistical modeling to the raw data, sales ops can predict conversion rates, sales cycles, quota attainment, and forecasts with more accuracy than ever before. As I said before, SaaS is a numbers driven business and the companies using the data to their advantage will be the most successful.

If you’d like to learn more about Lauren Kelley and OPEXEngine, visit http://www.opexengine.com/.