CFO Article on Sales Force Effectiveness

Better Data,
Better Decisions
How Finance Can Fuel
Sales Force Effectiveness
USING INFORMATION AS A COMPETITIVE WEAPON IN A FIERCE ECONOMY
CFOresearch
A report prepared by
CFO Research in collaboration with
IBM Business Analytics

BETTER DATA, BETTER DECISIONS
How Finance Can Fuel Sales Force Effectiveness
1 JUNE 2013 CFO PUBLISHING LLC
About this Report 2
Making the Grade in Sales Force Effectiveness 3
The Power of Data-Driven Insights 6
Is Finance Sold on the Idea of Supporting Sales? 8
Translating Data into Action 10
A Stretch for Finance Teams 11
Data Quality: Finance’s Top Priority 13
Sponsor’s Perspective 15
Contents

this report is based on survey responses from
163 senior finance executives in the United States
employed at companies with annual revenue of
$500 million or more. The survey was conducted in
March-April 2013, and included a broad cross-sec-
tion of company segments, as follows:
Annual Revenue
US$500 million-US$1 billion 20%
US$1 billion-US$5 billion 42%
US$5 billion-US$10 billion 12%
US$10 billion or more 27%
Title
Director of finance 28%
Chief financial officer 21%
VP of finance 18%
Controller 15%
EVP or SVP of finance 4%
CEO, president, or managing director 1%
Other finance title 9%
Other 3%
Industry
Financial services/Real estate/Insurance 21%
Auto/Industrial/Manufacturing 17%
Food/Beverages/Consumer packaged goods 9%
Wholesale/Retail trade 9%
Chemical/Energy/Utilities 7%
Telecommunications 5%
Media/Entertainment/Travel/Leisure 5%
Health care 5%
Hardware/Software/Networking 5%
Transportation/Warehousing 4%
Business/Professional services 4%
Pharmaceuticals/Biotechnology/Life sciences 3%
Aerospace/Defense 3%
Public sector/Nonprofit 3%
Construction 1%
Other 1%
About this Report

if the pundits had their way, your company’s
sales force would exist only as a quaint memory by
now.
Not long ago, business gurus were predicting that
the Internet would spell the end of the road for most
salespeople. But while technology hasn’t supplanted
salespeople, it has clearly transformed their role.
In a slow-growing economy, companies can only
increase sales by swiping market share from their
competitors. Faced with that challenge, it’s no longer
sufficient to attempt to capture a prospect by recit-
ing from memory a list of technical specifications.
Customers come equipped with more information
than ever—by some estimates, customers have
already finished 70% of the buying cycle before they
even talk to a salesperson—and to succeed, sales-
people will have to keep up.
These days, the difference between success and
failure more than ever lies in the quality of the data
that finance funnels to the company’s salespeople.
The availability of more and more data—spilling out
of internal CRM systems or migrating from social
networks and blogs—has enabled salespeople to add
value by guiding their customers through the thicket
of information they have collected on their own. By
obtaining the most relevant information from their
peers in finance, salespeople can de-commoditize
the selling process, not only nurturing new bonds
with customers, but making sure they are nurturing
the right customers.
To assess the value, and the usefulness, of the data
driving sales force effectiveness, CFO Research, in
collaboration with IBM Business Analytics, fielded
an online survey to senior finance executives at large
U.S. companies (revenues of $500 million and up)
in March and April 2013. Our conclusions are based
on 163 complete survey responses, as well as six
in-depth interviews with senior finance executives
in the U.S. These 2013 findings on sales force effec-
tiveness complement a similar study focusing on
sales incentive compensation management that CFO
Research and IBM Business Analytics (as Varicent,
previously) conducted together in 2010.
The 2013 research reveals a shift in priorities as
companies turn their gaze back to growth. During
the recession, the need to slash costs simply over-
rode any longer-term investment plans. In the 2010
survey, executives’ top concerns centered around
keeping the lid on sales costs—typically a major
component of any company’s expense line.
So, for example, 2010 respondents reported most
frequently that their companies had reorganized
reporting relationships, changed leadership, and
reduced headcount in sales functions as they strug-
gled to cope with the economic downturn. Investing
in technology to manage sales performance dropped
to the bottom of the priority list during the eco-
nomic crunch, despite half of the 2010 respondents
(52%) believing that technology needed to play an
important, if not critical, role in improving sales
performance.
The tide has begun to turn in 2013, with the number of
finance executives saying their companies are plan-
ning on beefing up sales resources (38%) outstripping
the number who believe sales resources will continue
to be constrained (27%). But the need to improve
technology support for growing sales staffs has not
lessened; in 2013, a mere handful of respondents (7%)
say that their companies excel at taking advantage of
technology to support sales force effectiveness. At a
THESE
DAYS, THE
DIFFERENCE
BETWEEN
SUCCESS AND
FAILURE MORE
THAN EVER LIES
IN THE QUALITY
OF THE DATA
THAT FINANCE
FUNNELS
TO THE
COMPANY’S
SALESPEOPLE.
Making the Grade in Sales
Force Effectiveness

time when “good enough” probably isn’t good enough,
a majority of finance executives (54%) believe their
companies only make adequate use of technology, and
an unusually large number (38%) say outright that they
are doing a bad job at it.
Progress has not been as rapid as finance executives
would like. In the 2010 survey, half of the respon-
dents (50%) saw room for improvement in the way
their companies gathered and used sales activity
data in their planning, budgeting, and forecasting.
This year, when asked to assign a letter grade to the
quality of sales information (including such dimen-
sions as timeliness, accuracy, transparency, and
completeness) underlying their companies’ ability
to forecast top-line revenue, respondents again split
evenly between those who give their companies’
data higher grades (49% assigned an A or B) and
those who give their companies’ data quality lower
grades (51% marked them down to C, D, or F). (See
Figure 1.)
But the 2013 results clearly show that the perceived
quality of sales data can have a significant impact
on its usefulness and on a company’s ability to plan.
This year, respondents who give themselves higher
grades also tend to rate their companies higher in
their ability to analyze their sales information and,
importantly, put it to good use. The level of confi-
dence that a company has in the quality of its data
affects how much it uses that data—and how well.
Respondents who assign “A-Excellent “or “B-Good”
to the quality of sales information are much more
likely than those who give out lower grades to say
that their companies make the best use of analyti-
cal and modeling techniques to manage sales force
effectiveness.
The frequency with which the two factors correlate
is important. In our 2010 study, respondents saw
the greatest room for improvement (59% of respon-
dents) in using tools and analytics to improve sales
performance. The 2013 research links better use of
FIGURE 1:
What letter grade
would you assign
to the quality of
sales information
(i.e., timeliness,
accuracy,
transparency,
completeness)
underlying your
company’s ability
to forecast top-
line revenue?
AEXCELLENT
BGOOD
CNEEDS
IMPROVEMENT
DPOOR
FFAILING
Finance executives are
split fairly evenly between
giving their sales
information high grades... ...and low grades.
45%
44%
7%
4%
1%
AN UNUSUALLY
LARGE NUMBER
OF FINANCE
EXECUTIVES
(38%) SAY
THAT THEIR
COMPANIES
ARE DOING A
BAD JOB AT
USING SALES
TECHNOLOGY.

tools and analytics more strongly with better sales
information. When asked to agree or disagree with
the statement that “my company makes good use
of analytical and modeling techniques to manage
sales force effectiveness,” 61% of respondents giving
themselves high grades (A or B) for sales data
quality also say that they make good use of analyt-
ical and modeling techniques. By comparison, only
27% of respondents at companies with lower-quality
information (below the grade of B) agree that they
use analytical tools effectively. (See Figure 2.)
High-quality information can’t just stay cooped
up in the boardroom—nor does it, as the study
found. Respondents who say they have access to
high-quality data for revenue forecasts also report,
with more frequency (70% versus 52%) than their
less-well-equipped counterparts, that their com-
panies are effective in matching sales resources to
changing opportunities and business objectives.
Salespeople need to use high-quality data to go
into the deal-making process prepared for what
their prospects likely want, having ﬁgured it out by
gathering and synthesizing timely information about
the company and its industry. Armed with quality
information, salespeople can use it to gain insights
into changes in customer behavior, and a smartly
sculpted pitch can shorten the sales cycle or even
open up new opportunities.
Data that reliably detects useful selling processes
and practices—as well as patterns in customers’
buying habits—are effective tools for optimizing
sales force effectiveness. Not that data-grounded
salespeople can just follow any playbook; they still
must be able to innovate in terms of their processes,
taking advantage of customer feedback and on-the-
spot analysis. But backed by solid data points, they
can refer to them—and rearrange their priorities—to
fully understand and empathize with their custom-
ers’ objectives. The skillfulness with which they do
that could make the difference when it comes to
keeping demanding customers from the clutches of
aggressive competitors.
FIGURE 2:
“My company
makes good use
of analytical
and modeling
techniques
to manage
sales force
effectiveness.”
61%
AGREE
at companies
rating their sales
information A or B
27%
AGREE
at companies
rating their sales
information
C, D, or F
COMPANIES
WITH HIGH-
QUALITY DATA
FOR REVENUE
FORECASTS
TEND TO BE
ESPECIALLY
EFFECTIVE IN
MATCHING
SALES
RESOURCES
TO CHANGING
OPPORTUNITIES
AND BUSINESS
OBJECTIVES.

there’s no denying the pressure that top
management feels to improve the effectiveness of
their sales forces as quickly as possible. In the 2010
survey, 61% of respondents picked out “improving
existing sales methods, processes, and/or staffing”
as contributing most to their companies’ growth,
and virtually the same number (59%) said that their
companies needed to improve in their use of more
sophisticated selling behaviors, such as cross-sell-
ing and focusing on sales profitability. If anything,
that focus has intensified since the previous study;
in 2013, 90% of respondents agree overall, and 51%
agree strongly, that it’s important for their compa-
nies to employ sophisticated selling behaviors, such
as selling based on profitability or customer satisfac-
tion targets, cross-selling and bundled selling, and
targeted discounting.
Companies are depending on their salespeople to
act as catalysts for growth and profitability, moving
away from transactional approaches and toward
more “consultative” models. For salespeople to
successfully fulfill that role, they need the data and
analysis that’s the bread and butter of their col-
leagues in finance.
It’s not enough for the finance team to slip the num-
bers over a transom, however. Finance needs to help
educate salespeople so that they are able to fully
absorb the data, constantly bouncing what they’ve
learned against what they witness in the market-
place. As the CFO of a distribution company with
revenues of more than $4 billion puts it: “The days
of the CFO telling their sales manager how much
their sales were and what they need to do are behind
us. Our sales management and sales folks are very
sophisticated and very comfortable reading sales
information. In the old days, finance talked down to
sales, but now it’s not like that and it shouldn’t be
like that. It’s ‘What can we do to help you?’ Finance
doesn’t bring in any money, but sales does—and
finance is there to help.”
James B. Arnold, SVP and CFO of the container ship-
ping company CMA CGM (America) LLC, is also
a strong advocate for a heftier role for his finance
team. “We believe people should have the informa-
tion [they need],” he says. “Whether it’s a sales staff
person, a sales manager, a sales director, or sales VP,
if they contact us with a need for information, we
provide the information.” To have a direct impact on
the success of the sales staff, he notes, finance must
“be able to provide them more cuts of the informa-
tion, so they can be better informed when they go in
front of a customer.”
Senior finance executives, our research shows, are
well-aware of how crucial it has become for them to
build this kind of partnership with sales. In our 2013
survey, we asked finance executives to choose which
sales-function improvements they thought it would
be important for their companies to make within the
next two years. The top choice—“Improve collabo-
ration among finance, operations management, sales,
and/or HR”—was selected by an overwhelming
82% of participants. (See Figure 3, next page.) This
is more than double the percentage (38%) from the
2010 survey who thought that improved collabora-
tion was most likely to help their companies reach
near-term goals.
Finance and sales functions have traditionally shared
an interest in keeping track of sales information—
closed deals, payment terms, collections issues—for
the sake of making sure that sales commissions had
been calculated correctly. For example, in the 2010
The Power of
Data-Driven Insights
“THE DAYS
OF THE CFO
TELLING
THEIR SALES
MANAGER HOW
MUCH THEIR
SALES WERE
AND WHAT
THEY NEED
TO DO ARE
BEHIND US. OUR
SALES FOLKS
ARE VERY
COMFORTABLE
READING SALES
INFORMATION.”
—CFO, DISTRIBUTION
COMPANY

survey, nearly half of the respondents (47%) noted
that finance played either a leading or a key contrib-
uting role in designing sales incentive compensa-
tion plans. In 2013, the same proportion of finance
executives (47%) say that they play a significant role
in designing sales compensation plans.
But as guardians of the company’s financial data, the
finance function is in a position to supply salespeo-
ple with the information they need to take a more
strategic and data-driven approach to winning over
customers. With quicker and better information, not
to mention the improved accuracy of forecasts and
targets, salespeople can both make better decisions
about which customers to target, and bring more
knowledge to bear on their interactions with those
customers. “Typically, there is no dearth of infor-
mation in any company, and that’s certainly true in
our company,” says Dallas Clement, EVP and CFO
of AutoTrader.com, an online marketplace for car
buyers and sellers. “What everyone needs is more
insights, more analysis, and more recommendations.
That’s where we’re focused.”
FIGURE 3:
Do you believe it will be important for your company to
make any of the following improvements in its sales function
within the next two years?
82% “Yes”
77%
75%
74%
66%
60%
59%
46%
40%
34%
34%
32%
Improve collaboration among finance,
operations management, sales, and/or HR
Improve management’s ability to use sales
reporting tools, such as dashboards
Leverage sales channels more effectively
Improve reporting on sales performance
Provide additional training
for sales representatives
Invest in new or upgraded
information systems for sales
Overcome organizational resistance
among sales staff to changes
Simplify sales incentive
compensation plans
Redesign sales quotas
Reduce turnover within
our sales function
Standardize sales
incentive compensation
across the company
Better balance
sales territories

the fact that finance executives see themselves
as willing collaborators represents a shift. In their
own eyes, they are no longer isolated number
crunchers who quietly process transactions and
print out reports. While they might not be the
extroverted go-getters who tend to populate sales
departments, they likely understand the important
strengths they bring to such an internal alliance.
In open-text questions, survey respondents often
mention the need to tear down departmental barri-
ers. Replying to a question about the most important
changes the company could make to improve the
effectiveness of the sales force, the executive vice
president of a business/professional services firm
with revenues of less than $5 billion writes that his
employer needed to “move the sales force away from
products into propositions which will require better
information and ability to collaborate.” The direc-
tor of finance for a telecommunications firm with
revenue of under $10 billion mentions the need for
“better partnership and trust between departments.
It’s good now, but it can always be better.”
What’s required “really is a partnership,” says
George Montague, vice president of finance and
strategy for the restorative therapies group at
Medtronic, the medical-device giant. “Some of the
best sales leaders I’ve seen are data-driven, which
makes them optimal business partners for the
finance personnel. Similarly, as finance people work
with the sales force, they get a lot of respect for what
it takes to succeed in the field.”
That kind of alliance feeds and grows off of the
effective use of shared data, finance executives
attest. They place nearly as much importance on the
effective use of information—improving manage-
ment’s ability to use sales reporting tools such as
dashboards, and improving reporting on sales per-
formance—as they do on collaboration. (See Figure
3, previous page.)
When asked about which “challenges will be most
important for your sales force to address over the
next two years,” 64% of respondents in this year’s
survey choose “price pressure (i.e., the widespread
demand among customers for more value for the
same or less money).” An almost equal proportion,
62%, choose “fierce competition in our markets.”
The sales function clearly is facing many thorny
choices—which customers to target, what value
proposition to offer them, which sales process would
both attract customers and create value for the
company. To make the sales force more effective, as
one respondent writes, the key is to “provide better
information that is actionable to improve sales.”
Translation: Salespeople need high-quality data. In
our survey, respondents who say that their com-
panies collect high-quality data were four times as
likely to agree that the finance functions are “very
effective at ensuring that relevant sales information
is accessible to the people who need to use it” than
respondents who report that the data their compa-
nies collect is of lower quality.
With ready access to the data, salespeople can apply
it to making better decisions in key areas. A control-
ler at a food/beverages/consumer packaged goods
company with revenue of more than $10 billion says
that “strategic pricing and a better understanding of
the value we create for our customers relative to our
competitors” would be important for improving the
effectiveness of the sales force. The CFO of a con-
struction firm with revenues of between $5 billion
Is Finance Sold on the
Idea of Supporting Sales?
“SOME OF THE
BEST SALES
LEADERS I’VE
SEEN ARE
DATA-DRIVEN,
WHICH MAKES
THEM OPTIMAL
BUSINESS
PARTNERS FOR
THE FINANCE
PERSONNEL.”
—VP OF FINANCE AND
STRATEGY, MEDICAL
TECHNOLOGY COMPANY

and $10 billion says that the sales function needs “to
better understand the price competition and deter-
mine early on if we are competitive with our pricing
structure.”
If salespeople are lacking in high-quality data about
their company’s costs, they can—and do—end up
working in complete opposition to management’s
goals. In the 2010 survey, nearly two-thirds of
respondents (64%) found “striking the right bal-
ance between increasing revenue and maintaining
profitability” to be a “compelling reason” to involve
finance with sales incentive compensation man-
agement. Finance executives from the 2013 survey
tend to agree as well: the treasurer at a company in
the media/entertainment/travel segment says that
the biggest challenge he faces is to “have the sales
force sell the products that are targeted to grow our
revenues, not products that are legacy sales prod-
ucts that we no longer support.” Another executive
writes that the sales force would be more effective if
the company “increased pricing controls to ensure
minimum levels of profitability while remaining sen-
sitive to market competition.” Without knowing any
better, salespeople could be focusing their efforts on
closing deals that undercut the bottom line.
Which is exactly what management needs to avoid,
especially at a time when fierce competition is
already hammering away at profit margins. The VP
of finance at an auto/industrial/manufacturing busi-
ness with sales of more than $10 billion says that the
company’s biggest challenge is easy to see, but hard
to sustain: “Find more profitable customers” and
“avoid negative margin deals.”
THE SALES
FUNCTION
NEEDS “TO
BETTER
UNDERSTAND
THE PRICE
COMPETITION
AND
DETERMINE
EARLY ON
IF WE ARE
COMPETITIVE
WITH OUR
PRICING
STRUCTURE.”
—CFO, CONSTRUCTION
COMPANY

the finance executives who participated in
our survey offer a range of ideas about how their
companies could improve the effectiveness of their
sales forces: “invest in better technology tools,”
“upgrade of personnel,” “better hiring,” “better train-
ing,” and “better sales management.”
Several respondents suggest that their companies
need to redesign the sales compensation plan, echo-
ing their colleagues from 2010 (37%) who thought
that their sales incentive compensation plans were
likely to become even more complex over the fol-
lowing two years. In the 2013 study, the director of
finance at a hardware/software/networking business
says the company needs “better linkage of rewards
with the salesperson’s achievements.”
But for many, data quality—and the ability to under-
stand which are the best data—is key. The audit
manager at a $10-billion company in the financial
services/insurance/real estate category suggests that
the company needs to “use better data analytics to
find out what changes would bring the best improve-
ments in outcomes.” Respondents who say that their
companies collect high-quality sales information
for top-line revenue forecasting are three times
more likely to agree that their finance functions
“are very effective at providing data and analysis
that improves sales management decision making”
than respondents who say their companies collect
lower-quality information.
Companies whose finance functions do more-or-
less continuous forecasting, and can split data apart
in whatever ways are most meaningful (region,
product, margin, etc.), are enabling their salespeople
to perform better. “There’s a a variety of analysis
necessary for determining where there is low-hang-
ing fruit, where there is more work to be done, what
are the weak points and what are the strong points,”
says Mr. Clement at AutoTrader.com. “The finance
function helps to understand what’s driving the busi-
ness, and makes recommendations so that people
are aligned with what drives the business forward.”
The finance function can also supply data that can
shape salespeople’s incentives—making sure those,
too, are aligned with the company’s larger aims.
Indeed, deciding where to add resources to the sales
organization—whether in people, training, technol-
ogy, or strategy—is also a byproduct of knowing
how to measure “high performance” in the context
of the company’s overall goals, which might include
acquiring new customers or learning additional sell-
ing skills. “Since the finance function is essentially
the scorekeeper across the whole organization, and
sales drives a portion of the success of the organi-
zation, there needs to be a mutual understanding
of what success looks like,” says Mr. Clement. “We
want to make sure we’re consistent in how we think
about success, so that our incentives line up with
how we’re measuring it.”
The finance function’s flexibility in working with
the information is paramount. Which data are
useful may vary from one division to the next; the
information needs of a global unit, for instance, are
likely to differ markedly from what a locally focused
unit requires. “We don’t try to put in one size fits
all,” says the CFO of the privately-held distribution
company. “The tool has to match what the manager
needs, as opposed to making the manager use the
tool that the whole company uses.”
Translating Data into Action
“WE WANT
TO MAKE
SURE WE’RE
CONSISTENT
IN HOW WE
THINK ABOUT
SUCCESS, SO
THAT OUR
INCENTIVES
LINE UP WITH
HOW WE’RE
MEASURING IT.”
—EVP AND CFO,
ONLINE MARKETPLACE

the finance function’s role represents a
stretch from the more passive view that has tradi-
tionally clung to the number crunchers, one in which
their main job is gathering and processing information
based on completed transactions. And finance execu-
tives recognize that their transition to horizon-gazing
visionaries is not yet as successful as it needs to be,
survey results suggest. Only 24% of respondents judge
their finance departments as “very effective” in sup-
plying data that improves decision making, with 70%
pronouncing finance as either “somewhat effective”
(54%) or “not very effective” (16%)—suggesting they
see much room for improvement. (See Figure 4.)
In almost the same proportions, respondents
assign themselves similarly weak grades—a
resounding “somewhat” in measuring the level
of effectiveness—when it comes to ensuring that
relevant sales information is easily available to
those who need to use it. Fewer than one in five
respondents believe they are “very effective” at
putting sales information to good use across the
organization. (See Figure 5.)
Here, again, collaboration between the two depart-
ments is essential. The distribution company CFO
interviewed says that, at his company, the finance
A Stretch for Finance Teams
FIGURE 4:
How effective is the finance function at your
company at providing data and analysis that
improve sales management decision making?
FIGURE 5:
How effective is the finance function at your
company at ensuring that relevant sales information
is put to good use?
Finance is not
very effective
16%
Finance is not
very effective
22%
Finance is
not involved
4%
Finance is
not involved
6%
I’m not sure
1%
I’m not sure
1%
Finance is
very effective
24%
Finance is
very effective
18%
Finance is
somewhat effective
54%
Finance is
somewhat effective
53%
ONLY 24% OF
RESPONDENTS
JUDGE THEIR
FINANCE
DEPARTMENTS
AS “VERY
EFFECTIVE”
IN SUPPLYING
DATA THAT
IMPROVES
DECISION
MAKING.

and sales departments got together to put different
systems and reporting structures in place. “What
finance did was to come out with some key sales-
people who we knew would be the right ones to sit
with,” he says. “They developed reporting to meet
the sales force’s needs. And on an ongoing basis,
there’s feedback. Finance keeps the salespeople
informed in terms of what information is out there
that they need.”
What the salespeople need, mostly, is information
of a quality that helps them in “understanding what
the various cost components are that go into what
we do, what can be influenced and what can’t,” the
distribution company CFO says. “For example, they
understand that for each order, someone has to go
pick it off the shelf, pack it, and so on, and that all
creates expenses. Then they can understand that
instead of having a customer put in an order every
day, they should maybe do it once a week. If they
can get the customer to do that, the order instantly
becomes more profitable.”
But, the CFO points out, that information may also
be used to attract and hold on to a valuable cus-
tomer: “With a particular customer we may say, ‘Do
business with us, not with a competitor, because we
will ship to you every day.’ Sometimes that informa-
tion is about relating to customers and getting some
topline business from them.”
SALESPEOPLE
NEED
INFORMATION
THAT TELLS
THEM
“WHAT THE
VARIOUS COST
COMPONENTS
ARE THAT GO
INTO WHAT WE
DO—WHAT CAN
BE INFLUENCED
AND WHAT
CAN’T.”
—CFO, DISTRIBUTION
COMPANY

thesalesteam’ssuccessfuluseofdatatodecipher
and decode customers—and, ultimately, help the com-
pany grow—depends, first and foremost, on the quality
of that data. As carefully as the sales department may
plan and execute its strategy, it won’t produce better
leads, attract more customers, and generate higher
profits if the data isn’t used dynamically by finance.
Responding to a survey question about how the
company’s finance function could most contribute
to improving sales force effectiveness, the VP of
finance at a health-care company with more than
$10 billion in revenues reveals just how elemental
the need for the right data has become. “I can’t even
begin to answer that question,” writes the respon-
dent, “until I get enough consistent data to deter-
mine the key roadblocks to effectiveness.”
That statement suggests at least one existing road-
block: a paucity of tools for making sure that the
right kinds of analysis are placed in the right hands.
An unusually high number of respondents—about
half—disagree with the statement that “my company
makes good use of analytical and modeling tech-
niques to manage sales force effectiveness.” (See
Figure 6.)
Data Quality:
Finance’s Top Priority
FIGURE 6:
“My company makes
good use of analytical
and modeling techniques
to manage sales force
effectiveness.”
AGREE
STRONGLY
AGREE
SOMEWHAT
DISAGREE
SOMEWHAT
DISAGREE
STRONGLY
I’M NOT SURE
An unusually high percentage of finance executives
(51%) admit that their companies do not make good
use of analytical and modeling techniques for sales
37%
35%
16%
8%
6%

Asked about the ways in which finance could most
contribute to improving sales effectiveness, respon-
dents zero in on the data. “Better and more timely
analytical data,” writes the VP of finance at a finan-
cial services/insurance/real estate firm with sales of
more than $1 billion. The executive vice president
of a business and professional services firm echoes
that sentiment, saying that finance could boost its
contribution by “ensuring timeliness of sales and
sales-activity reporting” and “responding quickly to
changing business situations with relevant reports
and analytics.”
What’s holding finance back? In some cases, the
constraints are obvious. One VP of finance at a
hardware/software/networking company expresses
a wish that finance start “being more proactive with
the data.” But he tempers his vision with a dose of
reality: “This is, however, constrained by the lack of
systematic solutions.” Answering another question, a
minuscule 7% of respondents say that their compa-
nies take advantage of technology to support sales
force effectiveness “extremely well.” While slightly
more than half (54%) characterize their use of tech-
nology as “adequate,” a sizeable chunk (38%) own up
to working for a company that does so “poorly.”
Finance might have the skills required, but without
the right tools there’s little opportunity to exercise
them. The finance team might have both, but, as one
survey respondent notes, it may be lacking when it
comes to having input into the overall cost structure
or compensation system.
If finance gets a stronger voice, respondents know
what they need to say. Several mention offering a
“forward-looking synopsis with different scenarios,”
as one finance chief puts it, or “meaningful analytics
to predict where the market is heading,” as another
CFO says. More than projecting into the future,
finance could use the information in the present to
“improve market and competitor insights and build
better selling tools,” says the CFO of an auto/indus-
trial/manufacturing company with revenues of more
than $5 billion.
With the right data, salespeople will have the answer
they need when they need it—whether it’s selling
more to existing accounts (through cross-selling)
or using leads to tap new markets. They’ll know
at what price it’s no longer worth making the sale;
they’ll understand the financial impact of every sale
in real time. And their incentive plans will reward
them for acting on that understanding, the one that
gives them a persuasive edge over the competition.
Improving sales force performance, Medtronic’s Mr.
Montague adds, is “most effective when the sales
leader and the finance leader are really joined at
the hip, partnering to project, and then deliver, the
sales.”
Which is why salespeople won’t disappear anytime
soon, no matter what the pundits say. Paired up
with members of the finance team—and guided by
high-quality data—they will become even more of
an invaluable resource.
IMPROVING
SALES FORCE
PERFORMANCE
IS “MOST
EFFECTIVE
WHEN THE
SALES LEADER
AND THE
FINANCE
LEADER ARE
REALLY JOINED
AT THE HIP.”
—VP OF FINANCE AND
STRATEGY, MEDICAL
TECHNOLOGY COMPANY

15 JUNE 2013
finance drives sales force effectiveness. not
everyone agrees with that statement. It’s true that the
relationship between sales and finance varies across
companies. The sales function commonly lacks data to
help align sales incentives, overcome price pressure, and
be a fierce competitor in their market. At a minimum,
finance plays a critical role in delivering the information
used to maximize sales productivity. As the guardians of
the company’s financial information, finance manages
data critical for understanding customer behaviors,
identifing territories that are performing, and driving
sales behaviors that align with the company’s objectives.
IBM Business Analytics partnered with CFO Research
on this study to better understand the relationship
between finance and sales effectiveness, and how it is
evolving. More specifically, we wanted to learn:
how finance views their role in building an
effective sales strategy, and whether that role is
changing
what role data plays in sales effectiveness, and
how it is being used
which investments have the biggest impact on
sales force effectiveness, and
how evolution of sales performance management
software has improved the sales/finance partner-
ship.
The responses to the survey were revealing. While
several priorities have evolved since we conducted a
similar survey in 2010, finance leaders have suggested
that many of the same problems and challenges persist.
The survey respondents reiterated the need to tear
down the barriers between departments. An over-
whelming 82% of the finance executives surveyed
believe that improved collaboration among finance,
operations management, sales, and/or HR would help
improve sales effectiveness. The demands for quicker
and better information in support of this collaboration
continue to increase, and it’s essential that finance and
sales create a symbiotic partnership.
With access to the right data, salespeople can make
better pricing decisions and improve their under-
standing of the value proposition that their company
has over its competitors. Sales managers can better
allocate their time, deploy resources, and improve the
performance of their teams. However, data is just noise
without the tools to use it effectively; 54% of finance
executives believe their companies only make ade-
quate use of technology, and another 38% say outright
that they are doing a bad job at it.
Amid all the advances in finance technology, one area
commonly overlooked is the management of variable
compensation and commissions. Incentive compensa-
tion management (ICM) is related to the efficiency and
accuracy of variable pay programs. But effective ICM
processes and tools also improve the insight, decision
making, and agility associated with the sales perfor-
mance management process.
In response to requirements for improved sales pro-
ductivity, IBM offers Cognos Sales Performance Man-
agement solutions. IBM’s Cognos Sales Performance
Management helps companies improve commission
accounting, deploy new compensation structures,
support the management of complex territories, set
more-accurate quotas, and better align sales priorities.
About IBM Business Analytics
IBM Business Analytics software delivers data-driven
insights that help organizations work smarter and
outperform their peers. This comprehensive portfolio
includes solutions for business intelligence, predictive
analytics and decision management, performance man-
agement, and risk management.
Business Analytics solutions enable companies to iden-
tify and visualize trends and patterns in areas, such as
customer analytics, that can have a profound effect on
business performance. They can compare scenarios,
anticipate potential threats and opportunities, better
plan, budget and forecast resources, balance risks
against expected returns, and work to meet regulatory
requirements. By making analytics widely available,
organizations can align tactical and strategic deci-
sion-making to achieve business goals.
To learn more about IBM Cognos Sales Performance
Management, visit ibm.com/business-analytics/spm
Sponsor’s Perspective

Better Data, Better Decisions: How Finance Can Fuel Sales Force Effectiveness is published by CFO Publishing LLC,
51 Sleeper Street, Boston, MA 02210. Please direct inquiries to Linda Klockner at 617-790-3248 or lindaklockner@cfo.com.
CFO Research and IBM Business Analytics developed the hypotheses for this research jointly. IBM Business Analytics
funded the research and publication of our ﬁndings.
At CFO Research, Matt Surka and David Owens directed the research, and Josh Hyatt wrote the report, with contributions
from Ian Mount.
CFO Research is the sponsored research group within CFO Publishing LLC, which produces CFO magazine.
June 2013
Copyright © 2013 CFO Publishing LLC, which is solely responsible for its content. All rights reserved.
No part of this report may be reproduced, stored in a retrieval system, or transmitted in any form, by any means, without
written permission.

CFO Article on Sales Force Effectiveness

Recomendados

Recomendados

Mais conteúdo relacionado

Mais procurados

Mais procurados (20)

Semelhante a CFO Article on Sales Force Effectiveness

Semelhante a CFO Article on Sales Force Effectiveness (20)

CFO Article on Sales Force Effectiveness