[McKinsey] Looking beyond technology to drive sales operations

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On this subject, here is an article about sales operations: New trends are forcing sales leaders to rethink how they sell. The right investment in sales operations can unlock sustainable growth.

“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

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