RIDING THE SPM MATURIT Y CURVE

Transcription

1 RIDING THE SPM MATURIT Y CURVE How a Sales Performance Management Assessment can Help Organizations Evolve from Current to Future Modes of Operations

2 In the OpenSymmetry 2013 Sales Performance and Technology Survey, the biggest challenges in providing sales and performance pay reports included the time to generate reports (24.6 percent), poor data quality (29.0 percent) and product issues (7.3 percent). These trends imply that sales organizations need a better system for delivering detailed, accurate and automated sales performance reports to meet compliance regulations. What is Driving the Need for SPM? In recent years, the industry has seen organizations increasingly adopt Sales Performance Management (SPM) best practices, be it through ICM automation or infrastructure optimization. Despite this fact, poor data quality and inaccurate compensation payments continue to be one of the biggest issues in the SPM space. Delayed or inaccurate compensation payments coupled with complexity of plans and lack of transparent sales processes adversely impact sales force morale resulting in lost sales opportunities and increased turnover. A demoralized sales force can be the single biggest reason for an organization to not achieve its performance and profitability goals in a given year. In addition, many organizations already plagued by these internal challenges now have to deal with yet another pressure - greater regulatory scrutiny and reporting compliance around variable incentive payments. There is an increased need for an optimized sales performance infrastructure to adapt to business growth, market fluctuations, new regulatory measures and a changing competitive landscape. Although, a scalable and flexible solution may address some of the compliance and data accuracy issues, in many cases, it needs to be supplemented with a broader review of the SPM capabilities within an organization. Delivering End-to- End Sales Process Optimization Through a SPM Assessment A SPM assessment is a rigorous approach to optimizing resources to help improve sales performance and ultimately drive a sustained competitive advantage for the organization. A SPM assessment takes a holistic, end-to-end look at strategies, processes, organizational structure and metrics within the organization. In the end, the assessment delivers a future state roadmap with streamlined processes, an optimized organizational structure, next-generation technologies and measurable metrics aligned with corporate sales strategies.

3 According to an Aberdeen research study, over 81 percent of sales reps achieve their annual quota at organizations that emphasize SPM, while lagging organizations typically see only 25 percent of their reps achieve these quota goals. 1 Organizations that apply SPM have 3x higher annual growth in revenue than lagging organizations. 2 Which Industries are Using SPM Today? Until recently, SPM was used mainly by large enterprises, such as insurance and telecommunications organizations, with complex incentive plans and sales forces of more than 1,000 people. Smaller organizations across a broad range of industries, including financial services, healthcare, high-tech, manufacturing and retail, are now looking at SPM to help them: Optimize the entire sales process with improved forecasting, faster lead qualifications and conversion, shortened sales cycle and increased profit margins. Improve territory and quota management. Attract and retain top sales people and reduce time to effectiveness for new hires. Extract and distribute business intelligence from multiple siloed systems. Simplfy and accelerate compensation processing and ensure regulatory compliance with detailed, automation reporting capabilities. A Framework for Building Future Mode of Operations All too often, organizations focus purely on finding and implementing technology that promises to solve their problems. Based on our global cross-industry experience spanning four key areas - organizational, process, reporting and technology, OpenSymmetry recommends that organizations first assess their current mode of operations (CMO) so they can evolve more quickly to their future mode of operations (FMO). In other words, organizations need to understand where they are today so they can set clear milestones for achieving future goals. By understanding process and infrastructure gaps up front, organizations can better identify the solutions that meet their specific requirements. 1, 2 Ostrow, Peter, Aberdeen Group research study: Sales Performance Management 2012: How the Best-in-Class Optimize the Front Line to Grow the Bottom Line,

4 OpenSymmetry Strategy Services Offerings Business Case for Automation Change Management Compensation Design & Administration Future State Design SPM Assessment Vendor Selection Get a Holistic Review of all Pillars Within SPM An OpenSymmetry SPM assessment provides an endto-end evaluation of all the key departments involved in sales performance, such as IT, Human Resources, Finance and Sales. By thoroughly evaluating all the people, processes, tools and technology that support the sales organization, business leaders can get the insight needed to develop strategies that drive greater performance, attract and retain the best talent, easily comply with government regulations and stay aligned with corporate goals. This middle tier of this graphic represents the pillars within SPM: Candidate Selection, Sales Enablement, Sales Process and Methodology, Sales Compensation Administration and Design, and Territory and Quota. To optimize these pillars, a SPM assessment evaluates and identifies gaps within all layers of the foundation of the house.

5 Think Beyond Technology Organizations have to look at more than just technology to achieve a desired FMO. They need to evaluate and optimize the entire foundation of the sales performance infrastructure. To help clients evolve from CMO to FMO, OpenSymmetry offers this four-step approach: Step 1: Assess. The first step is to conduct a SPM assessment to evaluate the current state of these core operations: Organization and people: Does the organization have the right people to create change, and do current processes and tools enable workers to collaborate and meet their goals? If not, why? What is the organization lacking? Business process management: How can the organization optimize its processes to improve sales performance and operational efficiency? 1 Assess Organization Processes/Workflow Reporting & Analysis Technologies/Tools Business intelligence: Does the organization have the tools and processes needed to unlock data and deliver it in the form of visual, detailed and actionable reports? If not, where are the gaps and how can they be addressed? Enabling technologies: Does the organization have the technology necessary to achieve FMO? Can existing solutions be optimized to achieve these goals, or are additional solutions needed? Step 2: Design & Build. This phase includes developing highlevel future state elements around organization, business processes, reporting and technologies driven by industry best practices. It helps determine if a SPM processes should be centralized or localized, who should own the design and administration of sales performance and more. Once the design stage is complete, the detailed build of the future state elements begins. 2 Design & Build Future State High Level Framework Playbook/Roadmap 3 Implement Execute Future State Train & Test Maintain Governance Metrics & Insights Four-Step guide to SPM Maturity In the Build stage, all SPMrelated processes necessary to enable future state implementation are documented, including communication and training. Vendor selection, if needed, also occurs during this stage Step 3: Implement. The third step involves the actual rollout of the future state technology components. Implementation can be handled either on-site with the organization s existing resources or delivered through various Managed Services options specializing in technology implementation. Step 4: Maintain. In this postimplementation phase, an effective governance structure and measurable KPI s help continue to extract the most quantitative and qualitative benefits from the FMO. This step includes change management, an ongoing process that helps implement and maintain the key steps of the SPM future state methodology. 4

6 SPM Assessment in the Real World: A Case Study The following case study illustrates how a SPM assessment can deliver real business results even before the technology and processes are fully implemented. After completing a SPM assessment, this organization was well on its way to achieving FMO, and this overview explains how. Business Challenges In 2012, Abila Inc. experienced an unacceptable shift in sales due to the following organizational changes: Change in mix of sales channels from primarily channel to both channel and direct sales force. Turnover in key sales positions, which created a leadership and organizational void at a critical time in the organization s growth. Restructured the sales team and compensation process to help expand direct sales to represent a significant portion of sales by FY2015. Needed a competitive sales incentive plan design that aligned with the new business strategy to collaborate and meet their goals? If not, why? What is the organization lacking? To help identify a solution to these challenges, OpenSymmetry first assessed the organization s sales structure, coverage model and overall process using the Five-Point Effectiveness Scale (see graphic) to determine the level of maturity for several operational areas. Sales force structure: The overall organization of the sales team. Coverage model: The market segmentation model and capacity of the team to appropriately address its channel strategy. People enablement: The development of human capital within the sales organization. Quota and incentive processes: The communication and operational processes used to determine how quotas and incentives are calculated across the organization. Key performance indicators (KPIs): The metrics used to measure the success of the sales organization. Sales process: The end-to-end sales process, from lead-generation to account growth. Tools and technology: Technology and support used to drive sales performance.. Maturity General Characteristics Streamlined & automated processes, extremely efficient organization, consistently repeatable success, highly skilled people, self-improving. Mostly standard & automated, mostly efficient organization, much repeatable success, mostly skilled people, self-awareness, & trying to improve. Often standardized processes but largely manual, pockets of repeatable success, key people are skilled, self-aware. Sometimes functioning processes, some organizations, some repeatability, has key single points of failure, few skilled people. Chaotic, ad hod processes, no organization, no repeatability, highly ineffective, largely inexperienced team. Based on the maturity level of each area, an optimization roadmap was created, which included recommended changes, projected benefits and an estimated budget for implementation. Results Abila achieved 105 percent of quota in first month. OpenSymmetry s assessment of Abila s sales operations demonstrated that significant benefits could be achieved in their sales structure. As a result, the organization was able to exceed quota (105 percent) in just the first month alone. We knew the SPM assessment would provide valuable insight into our sales process, but we never expected to achieve 105 percent of quota in the first month. We couldn t be happier. - Krista Endsley CEO, Abila Inc.

7 Conclusion Next Steps on the Path to FMO A SPM assessment is the critical first step to starting on the path toward FMO. No other processes can begin, or be fully cost-effective, without an evaluation of the current state of your people, processes, tools and technologies. For organizations willing to engage in an upfront SPM assessment, the benefits are undeniable. The ability to see and remediate critical gaps and optimize the entire sales performance infrastructure will significantly improve sales performance, incentive compensation processing, financial reporting, business process management and more. OpenSymmetry, the global leader in SPM with thousands of customer engagements around the world, is uniquely qualified to help organizations quickly achieve this transformation. About OpenSymmetry OpenSymmetry is a global sales performance management (SPM) consulting firm delivering end-to-end performance management solutions consisting of both strategic and technical services that enable customers to transform their sales performance solutions into actionable results. Founded in 2004, OpenSymmetry is headquartered in Austin, Texas with offices in London, Sydney, Johannesburg, Chennai and Kuala Lumpur. Clients range from SMB to Fortune 500 companies in the Communications, Financial, Health/Life Sciences, and IT/Distribution industries. For more information, please visit Contact Us Candice Arnold candice.arnold@opensymmetry.com Phone: +44 (0) Visit out websit: