The importance of maximizing the potential of your sales organization is to help them close as many sales opportunities as possible. But keeping tracking of the changes that happen routinely is more than difficult. Sales opportunities are continuously updated but the impact of those changes to the sales forecast and overall financial health of the organization is not well understood.
In most organizations the attention is focused on sales forecasts that are usually aggregated and lose the sales opportunity detail by geography, customer, time, value and stage that is needed to understand issues and opportunities. You need to know the impact of changes that happen on a daily and weekly basis that impact the monthly and quarterly sales forecast. In addition, as executives and management review sales forecasts they realize that investigating why there are so many changes has no quick answer or method to review the cause. It is no surprise that organizations that recognize sales processes as strategic to the health of the business focus on the sales pipeline as a strategic investment.
Unfortunately, for many organizations, they have seen the limitations of current sales pipeline efforts that use spreadsheets that do not keep track of critical details or changes in deals, or for other organizations who just have basic reporting or dashboards with tables and charts from their sales force automation (SFA) systems. This issue is easily addressed by dedicated software designed for the sales pipeline process that provides the necessary analytics and processing of sales information. For most organizations the bloating, which are opportunities with higher deal values or leakage where opportunities disappear without reason, is not well understood. This issue of the "devil is in the details" in your data can dramatically impact your sales forecast and financial results. Anyone remember the quarter where Siebel Systems who led the SFA market for many years missed their quarter by over $40 million? How long did it take them to find out that their sales forecast was inaccurate and the details in the sales pipeline could have helped address issues or more importantly provide earlier notice to the shareholders?
I have seen how one provider -- Cloud9 Analytics, a provider of sales pipeline management -- has changed how organizations establish their sales pipeline process and information for improving sales results. Recently at Salesforce Dreamforce conference, Cloud9 Analytics brought forward new capabilities in extending the value of SFA into where goals, incentives and booking information can be integrated together including from ERP and CRM systems like Oracle and SAP. Cloud9 Analytics offers what is called Sales Pipeline Accelerator Suite that provides a range of capabilities to help manage changes in the sales pipeline that can be dynamically notified to management where needed. Even easier is that you do not have to buy and install the software as it is available in a software-as-a-service (SaaS) rental approach as part of the cloud computing industry. One of the capabilities is the waterfall analytic technique that can provide sales management to sales individuals the ability to keep an eye on changes and take actions where needed. In fact, having visibility into the sales pipeline was the top desired capability by 87 percent of sales management, according to our Ventana Research Sales Performance Management benchmark. These capabilities are part of what you do not get in Salesforce and other SFA systems which is why the Cloud9 Analytics is gaining further adoption and deployment.
Of course having the right sales analytics and metrics that are immediately available is part of the secret sauce you should expect from a dedicated solution. Cloud9 Analytics provides a range of these including prebuilt capabilities to examine pipeline velocity, coverage and weighting by individual and organizations. All of these are readily available out of the box to help focus on the sales pipeline process and how to improve sales effectiveness.
Having sales pipeline management is not just for sales. Marketing organizations should know how their activities contribute to the sales pipeline and where their investments are delivering deals that close faster due to proper education and sales lead nurturing. Finance too should be able to have a weekly sales pipeline health report or dashboard to see how business is progressing as pointed out by my colleague (See: “Fix the Connection Between Sales and Finance Using IT“). It should be no surprise that finance has lost patience with the fluctuating sales forecasts that are not trusted for input to the financial or integrated business planning, which is part of their new priority (See: “Integrated Business Planning - Priority for 2009“).
Understanding the health and changes of the sales pipeline should not be difficult and frankly should be automatically created every day by the data that the sales organizations already enter into their SFA. It is no surprise that my research finds that over half of organizations are still trying to improve the accuracy of their sales metrics as most still manually create the metrics in spreadsheets by copying and pasting. Your sales operations team should be focused on helping your sales organization address the needs of sales management and not spend the majority of their time being data gophers or number generators. I would highly recommend that you establish sales pipeline management with a dedicated process and system that you can depend upon. If you have not looked at one of these systems and applications yet, examine how Cloud9 Analytics can help you utilize your SFA data efficiently. Just increasing the frequency of your current sales forecasting will not be sufficient either as the analytics and metrics required for this process within sales is much different.
Mark Smith also blogs at ventanaresearch.com/blogs.