April 03, 2012, 9:42 PM — At the end of any quarter, the last thing CFOs want to hear is that more than half of forecasted sales did not close. Unfortunately, this scenario is quite common. CFOs blame sales staffs for faulty forecasts, while sales teams try to shift the blame to IT for not giving them the right tools to turn fuzzy forecasts into actionable data.
According to Ventana Research, most organizations are missing one essential piece of the sales puzzle: visibility into the sales pipeline. More than 60% of the organizations Ventana polled say they plan to invest in sales analytics in 2012, meaning that finding sales insights hidden in "Big Data" will be a top priority this year.
There's a trap here, though.
Gaining visibility into the sales pipeline is meaningless if your organization doesn't have a formal sales process in place. "Companies spend far too much time trying to normalize their existing sales data not realizing that historical sales only tells you what you sold, not what opportunities exist," says Melissa Scheppele, CIO of Cooper Industries . "Today, forecasting is based on a sales person in field saying 'I'm going to close deal.' Those falsehoods trickle up."
Before we rush to blame sales teams for bogus forecasts, it's important to step back and consider an important contributing factor: the personality of successful sales people. Sales managers want optimistic sales people. They want a team that believes it will close a high percentage of open leads. They stress positive thinking. That kind of attitude can certainly translate into success. What an enthusiastic attitude doesn't translate into, however, is accurate forecasting.
Many sales teams have access to tools that are supposed to provide visibility, but there's no guarantee that the sales force will use them -- or if they do, that they will use them properly.
"CRM [Customer Relationship Management] is one of the few apps where target users, sales reps, don't want to use it," says Jim Burleigh, CEO of Cloud9, a provider of cloud-based analytics. "CRM is about preserving institutional knowledge and ensuring institutional processes." When it comes time to collect, enter and improve data in CRM systems, the sales representatives will ask, "What's in it for me?" In most organizations, the answer is not a whole heck of a lot.
"There is no incentive, no compensation for getting the data right," Scheppele says. "The compensation is for closing the deal."
Sales Automation Can Add to the Problem
Getting sales representatives to embrace automation can have unintended consequences, however. The biggest of these is the escalation of the "Big Data" problem.