Sr. Manager, Demand Generation
In recent years, organizations have increasingly started to prioritize revenue operations. Our CEO Max Rudman recently joined Rory Fonseca, Head of Cloud Practice at Cloudwerx, for a discussion on how to optimize revenue operations. Brion Shears, Senior Vice President of Product Management at Salesforce, also participated in the conversation. Check out the video below, and read the blog to learn some of their valuable insights!
As the digital economy takes over, businesses are shifting towards models that earn revenue over a period of time, like software-as-as-service (SaaS). As a result, sales and finance teams have to work together more than ever before to ensure a good customer experience, accurate revenue recognition, and solid forecasting.
This new approach is known as “revenue operations.” Revenue operations consider all aspects of revenue management, including revenue recognition, forecasting cash inflow, and ensuring calculations align with the terms of customer contracts. The resulting interconnectedness between sales and finance is critical to driving consistent revenue in today’s market.
On top of this, there’s been a shift in how customers interact with businesses. Today’s customers tend to reach out to companies when they’re closer to making a purchase than they used to. Because of this, sales, marketing, and customer success all need to work together across the entire customer journey.
It’s critical to the success of revenue operations to have a single, unified data system and an effective transaction platform. Due to the widespread digital transformation initiatives triggered by the pandemic, companies have been updating their CRM systems, streamlining their CPQ and billing operations, and incorporating B2B commerce solutions.
Applications like Revenue Cloud can facilitate business agility—which is essential when you need to quickly pivot as the result of unexpected situations like the pandemic.
Unfortunately, the generous budgets businesses initially were allotted to invest in software to promote digital advancement and agility are now a thing of the past. The challenge is currently to maintain your momentum in digital transformation, but with more limited resources.
Moreover, when you go live after a digital transformation initiative or software implementation, it’s not the end—it’s just the beginning. You need to keep reconfiguring your systems and processes to prioritize efficiency and margins. That’s why agility is so important.
To optimize the revenue operations process, first identify the issues you need to tackle and thoroughly explore potential solutions. You need to have the willingness to veer away from how you used to do things and try something new. Technology can be a powerful tool in this endeavor.
However, if you decide to implement applications like Salesforce CPQ and Revenue Cloud to streamline revenue operations, be careful of the “lift and shift” mindset. This involves trying to replicate old, manual systems and processes in a digital environment instead of creating new, more efficient ones. Oftentimes, a fresh approach is more effective.
Technology is just one of the three elements that are crucial to the success of revenue operations. It’s also the one that usually poses the least difficulties. What’s often more challenging is empowering your team and fine tuning the processes.
There’s no one-size-fits-all when it comes to measuring these initiatives. You need to identify the metrics that are relevant to your business and your specific initiatives—and then focus on them. For example, you could measure the number of contract renewals resulting from integrating specific services with software. It’s all about finding the metrics that make sense for your organization.
To build an integrated revenue operation structure, you need to mix foresight with focused execution. Yes, it’s important to plan ahead as far as possible when it comes to business systems, product development, and design. However, it’s best to center the practical implementation around what’s important right now.
One pitfall to avoid is over-customization of software, which can significantly derail your efforts because it complicates the automation process. On top of that, remember that it can be difficult to achieve 100% automation. You might complete 80% without too many problems, but the last 20% can pose substantial challenges. That’s why it’s best to maintain some flexibility for the few occasions when you might need to perform the work manually.
The purpose of revenue operations is to drive business growth by supporting your revenue teams. They do this by building an integrated, seamless, and frictionless revenue life cycle with the customer at its core.
Along with growth, maintaining ongoing operations, boosting customer adoption, and attracting new customers are all important indicators of success. In short, the expansion of both new accounts and renewals is a sign of well-functioning revenue operations.
At their core, revenue operations are centered around customer-oriented, seamless interactions. By creating a cohesive revenue operations structure and tracking profitability, customer acquisition, and contract renewals, you can measure your success and continuously adjust your strategy to drive sustainable growth.