How sales force automation has turned high definition - and what it means for you

25th Jul 2013

“It will be like comparing the radio to high definition television”. That’s how Gartner’s Patrick Stakenas believes the sales force automation (SFA) of 2000 will stack up against the SFA tools emerging over the next couple of years. And this evolution will be the catalyst for much wider changes in the way that sales departments operate and organise.

Back in 2000, SFA was viewed very much as a management tool to measure rep performance, with very little value for the salesperson in terms of helping them sell. They were also far more technically challenging than the tools of today, requiring the assistance of IT to manage updates and upgrades, and with complex mobile synchronisation architectures that were often unreliable. It is little surprise, then, that user adoption was patchy at best, and that an estimated 80% of SFA deployments failed to show any measurable return on investment. But sales technology has evolved significantly since then – with major implications for reps.

“Like many enterprise applications, sales applications are becoming more user-friendly and intuitive,” says Christopher Cabrera, founder, president and CEO at Xactly. “This is essential for sales organisations for a few reasons. For starters, if technologies are too complex, sales simply won’t use them. We saw this in the early days of CRM. You want your sales team spending as much time as possible serving customers and selling. You don’t want technology to become an inhibiter to that, so simplicity is key. As sales reps and managers spend a lot of time traveling, easy access to information via mobile devices is also critical.”

“If you think back to the early days of SFA, the primary driver for implementing the first generation of sales force automation was reporting for management,” adds Bill Band, VP and principal analyst for Forrester Research. “But most of the new technology trends do help sales people more – they make them smarter, more effective, more efficient, and they have data available to them when they need it. So these developments collectively benefit the sales person more than the previous generations of SFA did.”

The four most significant IT trends are mobile, social, Cloud and Big Data – mega-trends that are converging in a “nexus of forces” to create a “technology-immersed environment”, according to Stakenas.

“New business opportunities emerge from this nexus of forces, especially scenarios that extend reach and relationship to customers, citizens, patients, employees or any other participant in an ecosystem of humans and machines,” he notes. “The combination of pervasive mobility, near-ubiquitous connectivity, industrial compute services, and information access decreases the gap between idea and action. To take advantage of the nexus of forces and respond effectively, organizations must face the challenges of modernizing their systems, skills and mindsets, and selecting technology providers who support the nexus of forces.”

Unsurprisingly, therefore, Stakenas predicts that it’s not only sales organisations that ignore the IT mega-trends that will be in for a rough ride – it is also the technology providers as well that will suffer at the hands of rival vendors that embrace the opportunity more quickly. So how are SFA vendors responding to mobile, social, Cloud and Big Data, and how is this shaping the SFA landscape?

With as many as 70% of all the SFA deals now Cloud deployments, it has rapidly overtaken on-premise as the preferred choice.

“It’s usually or Microsoft Dynamics On Demand, but SAP has made another commitment to Cloud through its SAP 360 offering, which is a combination of on-premise plus Cloud, so in sales force automation Cloud is the de facto deployment option now,” adds Band.

“The vendors are moving fast and they are utilising the Cloud,” says Stakenas. “There isn’t a vendor I know that is on-premise only. They just can’t compete in the marketplace unless they offer applications through the Cloud. It used to be that you were either on-premise or Cloud, but now it’s either you’re on-premise and the Cloud or just Cloud.”

This has had a widespread impact on the sector.

“Cloud is leading to greater commoditisation in enterprise software,” suggests Alan Haley, founder and MD of Europa Communication. “This means that many vendors are having to lower prices, which has one positive benefit of moving the purchasing decision downstream from executive to department head.”

Mobile migration

Just as all vendors have moved to the Cloud, so there is a similar migration to mobile.

“Without exception, every sales technology firm is optimising their applications for mobile,” says Stakenas. “Whether it is HTML5 or native applications for the specific devices like iOS or Android, they are doing it. In some cases they are just optimising their web interfaces so that even if it’s not designed for mobile devices at least the framework will work inside a mobile device. But they’re all doing it.”

“Mobile is at the top of the list now as a consideration when organisations are choosing SFA systems,” adds Band. “Most of the companies I work with already have some kind of SFA, and the number one thing they’re looking for when making a new decision is the mobile aspect of it. Modern sales organisations want to equip their mobile sales organisations with tools to present material more compellingly, they need tablets to have geo-location to tell them where to go next and be able to collect information not only by adding in data fields but by taking a picture of a display and sending it back to the head office. So mobile is very important - it adds new capabilities to salespeople beyond data collection and recording.”

Stakenas believes that together, Cloud and mobile have had a significant impact on the market, eliminating many of the complexities that encouraged users to adopt an on-premise suite approach.

“For example, an enterprise does not have to concern itself about platform compatibility since the application is running on the SaaS provider’s infrastructure. The clear trend is toward ecosystems versus a single provider.”

But this shift isn’t without its own challenges.  He continues: “One clear concern of this push toward ecosystems is from a financial perspective. The cumulative effect of adding multiple ecosystem provider's SaaS bills on top of each other. In essence, companies have to pay for multiple infrastructures from each provider, versus a suite provider who would be able to leverage one infrastructure for all of its applications.”

As such, Stakenas recommends that buyers consider not just the functionality that the SFA vendor provides, but also the ecosystem that has evolved to support the seller’s functional gaps.

Unsurprisingly, social media is also proving influential in the SFA vendor marketplace, with many vendors building social capabilities into their offerings, whether that be collaborative tools or social data insight tools.

“Because of the new tools coming into the market, there is a lot of interest in sales collaboration tools such as Chatter,” says Band. “Social feeds are increasingly being implemented in organisations where there’s a requirement to collaborate around deals and share information. Organisations can now organise their teams and collaborate around deals in way that used to be theoretical but is now possible.

“But we’re also seeing more vendors offering social data capability, such as Lattice Engines. They make a database of what’s going on in social conversations and boil it down to provide indicators to the sales organisation about what kind of people they should talk to next and what calls to make. And then there’s also LinkedIn providing more information to sales organisations as well, of course.”

Fantastic business

This use of social media to provide better insights about prospects based on social data really serves as the intersection with Big Data, where organisations take all the information that is out there about businesses – activity announcements, sentiment, etc. – and apply predictive analytics to deduce the next best company to contact.

And Ashley Verrill, managing editor at Software Advice, believes that social media data represents the biggest trend impacting sales force automation at present.

“We’ve seen social media integrated in SFA systems before - contact information is stored alongside Facebook, Linkedin, Twitter and other social profile information in the SFA. What I’m starting to see more now is insights being pushed to the user because an opportunity for action has been surfaced. Let’s say for example that a salesperson is targeting a specific corporate account. They have three different contacts from that company in the SFA. All of the sudden one day, all three contacts start posting about a new acquisition the company announced that day. This presents an opportunity to reach out and congratulate the most influential decision maker, so the SFA might prompt users to take this action with an alert.

“This development of technologies that deliver sales insights in real time extends beyond social media. For example, I’ve seen products that can alert sales reps when someone in their “marketing sweet” visits the website (without having to wait for them to fill out a form). This is based on data immediately gleaned from that visitor’s IP address. This information can also be integrated with the SFA, so reps can see when that person last visited on the site, what pages they viewed, or content they downloaded.”

Despite increasing revenues being the number one goal for sales organisations, research into the benefits of SFA investments by CSO Insights has found that only 18% of users said that the tools had helped them increase revenue. As such, Jim Dickie, managing partner at CSO Insights, is unsurprised that the likes of social and Big Data have proven so influential to the SFA market.

“The traditional capabilities of SFA aren’t really designed to make you more effective, they are designed to make you more efficient, and people are realising that Big Data can help them prioritise what accounts to go after and what to sell them, and social can help identify the right contacts and how to reach them, and mobile can help me show video clips on my sales visits,” says Dickie. “And so vendors are realising that they have to start delivering these things. 80% of the companies we surveyed in our last study already have an CRM system, but a quarter of those said they would be willing to switch systems. And because of Cloud Computing it is easy to go from vendor A to vendor B if you’re dissatisfied. So the vendors know they have to deliver a complete solution because it is the only way they’re going to protect their customer base – if they don’t provide it then the customer will go to another vendor that does.”

And ultimately, the changes are good for the buyers.

“Embrace the changes. Adapting your choice of IT applications, if done well, will save you money, enable you to grow faster and make your employees happier,” concludes Chris Rhodes, CEO of Companybook. “There is so much fantastic business software available today - that only huge companies could afford just a few years ago - and most of it is Cloud-based and accessed via a browser, so your team doesn’t need to be tied to a desk.”

In the next article in this series, experts will share advice on how to choose the best sales force automation solution for your specific needs. 

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