The front office computing market continues to impress me despite the fact that I have been covering it for so long.
Early solutions evolved into suites that covered what we once thought were all of the niches possible, but the surprising thing is that all that coverage simply initiates many new niches. Today, we talk about the customer experience, but increasingly we also have a growing sense of how important it has become to integrate the front office with the back office.
Front to back integration has been on a lot of radar screens for a long time, though initially it referred more to the idea of bringing together production systems and sales. For example, sales data can and does perform a lot of useful work up the supply chain to help tune production and delivery. Increasingly though, we’re seeing a lot of focus on the reverse trip — back office numbers influencing the ways that front office workers operate.
Some of the more interesting front-to-back integrations these days might really be classified as back-to-front for the ways that centralized data is transforming the front office. Some examples include compensation management, sales effectiveness and configuration-pricing-quotation.
We’ve looked at compensation management before, but what’s interesting to me is how many organizations zipped through the idea that compensation management is important for calculating commissions and went straight to using it to influence the behavior of their sales representatives.
You can’t say enough about getting sales and finance people out of their spreadsheets and into a database driven application. The database enables things you can only dream about with a spreadsheet, like reporting and customizing plans to meet organizational needs as well as to spike performance.
That’s all good back office thinking, but the fact is that when you take the information about deals that is found in an SFA (sales force automation) system and mash it together with back office information about pricing, commission rates and compensation, it is a wonderful way to focus the attention of a sales team. Beautiful things happen after that. Companies like Centive, Callidus and Xactly have my attention here.
One of the broader categories in the front office, sales effectiveness is responsible for many of the technologies that influence selling especially at the beginning and near the close. Compensation management could easily be considered a sales effectiveness tool, but it has distinguished itself in its own right and deserves to be its own category. Sales effectiveness still has a lot of lead development and lead management capabilities built in and some of that overlaps with marketing.
It’s a good thing that marketing and sales are overlapping a bit since the better the communication between these two groups, the better the results. These efforts can no longer be kept apart. Sales knowledge is one of those areas that gains a lot from the overlap. As with compensation management, sales knowledge brings a real database into the picture for the first time, with very positive results.
The database here is used as a repository for things like competitive information, collateral and proposal elements that can be quickly reformatted and configured to deliver the exact information a customer needs rather than a pre-formatted generic piece.
I have seen companies begin to build whole methodologies around their sales knowledge systems and that’s pretty exciting. Companies like Pragmatech, Sant, Savo Group and others have briefed me and are impressive for different reasons and each addresses a slightly different niche.
Lead handling and demand generation are other areas where there is significant innovation going on and companies like iCentera, ON24 and Eloqua are interesting. Each has identified a solution that repeatedly touches a customer on the customer’s terms and helps mature a lead from its earliest state to something that is actionable and closable. The result is what sales people have always asked for — better quality leads, not just a bigger list of suspects.
My third area of interest lately has been configuration, pricing and quotation (CPQ) and while these solutions attack a different part of the sales process, they implement some of the same kinds of technologies we’ve already identified.
CPQ was, and in many places still is, approached with a spreadsheet and modern solutions that use databases are making significant inroads. Online aggregations of product catalogs are doing a lot to simplify certain sales process where product lists, prices, discounts and more must be monitored and signed off.
A simple CPQ system can do a lot to reduce e-mail traffic between sales representatives and their bosses and speed accurate information to customers for decisions. Firepond has a pretty good system and they’ve recently gone to an on-demand solution model too.
This discussion wouldn’t be complete without a quick mention of reference management. I have noticed that the big company habit of managing client references is making its way down to the SMB (small and medium-sized business) space where it can really be beneficial.
Reference management is just what it sounds like, finding a way to off-load your best customer references so that they don’t get burned out. A smart approach that can help drive sales processes. One of my favorites in this space is References Online, the company that got the ball rolling.
Your Sales Process
There’s never been a better time to customize your sales process, taking into account your products, people, the way you sell and who you sell to. We’ve come a long way from the days when we kept sales records on scraps of legal paper, but the job is not done by a long shot.
Early CRM gave everyone the tools to build rather rigid sales processes and the reports looked great, though the impact on the sales force was dubious. Today, we’re at a point where we can do a lot more and do it better because we have a choice of tools.
In my mind, the analogy is that software companies have now done the equivalent of customer experience management, but for the vendor. There ought to be a name for it.
Denis Pombriant is the managing principal of the Beagle Research Group, a CRM market research firm and consultancy. Pombriant’s research concentrates on evolving product ideas and emerging companies in the sales, marketing and call center disciplines. His research is freely distributed through a blog and Web site. He is working on a book and can be reached at [email protected].