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Summary
Introducing performance management for sales organizations is a necessary step for companies intent on applying the principles of operational and financial performance management to improve business results. Using advances in process and information management and new technology, the historically undisciplined efforts of sales can now be rationalized to create an effective sales organization. Ventana Research recommends that organizations seeking maximum productivity from its people and process assets adopt the best practices and technology that produce effective sales performance management.

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Ventana Research defines sales performance management as the practice of managing the effectiveness of sales-related events, activities and processes to a set of agreed-upon organizational customer and revenue goals. Ventana Research pioneered the study of sales performance management as part of our benchmark research on operational performance management; organizations that have adopted the practice now are reporting substantial results. Our research in 2008 will examine more closely the ways in which sales performance management can deliver tangible improvement in sales performance. In addition, we will monitor the increasing adoption of new purchasing and usage models. As replacements for or supplements to traditional on-premises licensing, organizations are turning to software as a service (SaaS), a subscription approach hosted on the Web, and managed services, in which a supplier manages the technology. Both approaches enable sales organizations to realize more of their potential using minimal in-house technology and IT resources. We will focus on three topics in 2008:

Understanding Sales Performance Management
As organizations adapt their sales processes to yield more effective outcomes, management in the sales and finance organizations are collaborating in the effort. One key step is to break down silos of information in order to be able to share all relevant data in areas such as forecasts, compensation and rewards. This research will focus on deploying effective sales performance management and how it also can provide financial visibility and help establish trust between these Sales and Finance. It also will revisit the role of systems for customer relationship management (CRM) and sales force automation (SFA) and explore their potential linkage to sales performance management. Acknowledging the best practices we identify for business and technology investments in sales performance management will lead to a sharpened focus and improved results.

Adopting Performance Management Methods for Sales
To improve their performance systematically, sales organizations must measure it and communicate those measurements in useful ways to sales representatives and managers. Our benchmark research will examine the role of analytics and business intelligence (BI) in specific sales activities and the use of sales incentives and coaching to positively influence sales behavior. We also will look into the roles played by forecasting and planning in determining demand for products and services and the utility of sales and operations planning (S&OP). We also will explore the use of external information to provide sales intelligence about markets, customers and competitors. And we will assess best practices that can help optimize sales performance and reduce the risk of not achieving performance targets at every level of the sales organization.

Realizing the Potential of Sales Operations
Improving the efficiency of sales operations is a cornerstone of sales performance management. Our research will focus on the improvement of sales compensation processes as they are linked to sales territories for which quotas and targets are established. In addition we will explore how to transform information such as collateral and sales presentations into effective sales assets and a knowledge base for self-service use. We will investigate as well how information about customers, including location data, can contribute to improving sales planning and the execution of sales calls.

Assessment
For many years the sales function has operated independently of the rest of the organization, often resulting in surprises and disappointment. Sales performance management can help finance and operations maximize the certainty of results from sales efforts. It provides tools for management not just to measure but also to manage sales through a range of coaching, incentives, rewards, assets and other activities that motivate sales reps and help them develop their full potential. By applying information and technology to support sales processes and people, management will be able to go beyond sales projections to focus on improvements and investing to realize the revenue potential of the organization. Our 2008 research agenda is to investigate these and related issues that will advance the adoption and value of sales performance management.