Sales Operations: The Next Evolution in Manufacturing

Unprecedented technological change coupled with globally expanding, highly competitive markets are creating the need for more complex sales organizations. To sell complex products and solutions across the globe, an executive’s initial response is to demand more from their sales teams through teaming, elevated skills, more tools and increased technical enablement. Alexander Group (AGI) refers to this newfound focus where sales (not product) is the differentiator as the first evolution in 21st century manufacturing sales models. The complexity and costs of these selling models is driving the next great evolution: the rapid professionalization of Sales Operations.

Sales Operations provides direct access to multiple support and enablement needs that historically reside in other functions (e.g., finance or HR), or that previously did not exist at all. In the past, manufacturers generally did not emphasize the sales force (many simply outsourced ‘sales’ to distributors or manufacturing representatives). Thus there was no apparent need for a sales operations function. As manufacturers have grown, expanded globally and are required to sell a broad set of technologically advanced products and services, Sales Operations has become an absolute necessity. Top manufacturers invest heavily in the function and strive to effectively set up Sales Operations for long-term success.

Four Key Pitfalls When Standing Up a Manufacturer Sale Operations Model

A majority of manufacturers who attempt to establish Sales Operations commit four classic mistakes below:

• Not Defining Charter:  Sales Operations can have almost limitless functions–from the tactical to strategic. It is critical that leaders first define and prioritize key sales model needs before building out a sales operations function.
• Creating ’Shadow Ops’ With Limited Accountability:  Many sales organizations have access to ad-hoc resources in IT, HR, Finance, Operations and Marketing and may try to coordinate these resources and label the effort ‘Sales Operations.’ But without direct, formalized control or clear prioritization of resources or budgets, these ‘Shadow Ops’ functions rarely provide sales teams with the consistent, long-term support they need.
• Focusing Only on IT:  Sales Operations may be narrowly defined as more robust IT support, but this definition severely limits the broad-based strategic leverage a more robust and expansive sales operations team can provide.
• Lack of Centralization: Particularly in global, multi-divisional organizations, decentralizing Sales Operations too extensively can cause sub-optimization. This greatly limits sharing of best practices and the scaling of critical investments in sales–e.g., CRM, sales reporting and sales compensation automation.

The Way Forward

There are clear guidelines for establishing an effective sales operations program in manufacturing. First, sales leadership must assess current gaps that Sales Operations will tackle. Both a quantitative and qualitative review of sales effectiveness will answer some of the following questions:

• Where are the key bottlenecks in the sales process?
• Does the company utilize CRM and other sales-focused programs optimally? Do they currently address the key needs of their sales force?
• Does the company consistently and broadly utilize sales management best practices such as hiring/coaching, quota setting and account targeting?
• What are the true costs in lost sales/productivity from the gaps above?

Once sales leadership fully assesses and prioritizes key needs, they should build a business case for organizational change that clearly outlines:

• What new resources the sales operations team requires.
• What resources Sales Operations will share with other functions and which will remain dedicated to Sales Ops alone.
• Which programs sales leadership should decentralize following a center-led example. And which ones they should centralize.
• Which resources leadership should dedicate globally/centrally, and which resources will report to separate business units, regions or countries.
• What the expected uplift is for the new program, and how management will finance it.

Once executive leadership approves the program, it is best to follow a build–and-expand strategy. No two sales operations functions follow the same path, and programs tend to grow and evolve as merits of the strategy show significant and early wins for the sales model.

Make it Happen

Sales operations programs–dedicated, staffed and funded–are no longer an option for manufacturing organizations. Revenue leaders cannot afford to rely on dated and highly siloed organizational structures to keep pace with the complex and rapidly evolving needs of today’s marketplace.

To learn more about sales operations in manufacturing, please contact one of AGI’s manufacturing leaders.

Contact us to learn about recent comprehensive AGI studies on both sales operations and manufacturing sales model practices and trends.