EXECUTIVE SUMMARY
THE SALES AND COMMERCIAL EXCELLENCE SURVEY
As the nature of work flexes to accommodate globalization, pandemics, and the rise of a virtual culture, many corporations are revisiting long-standing questions on the most effective way to organize for profitable growth. What best practices are used to scale and deliver a predictable, best-in-class customer experience?
esellas explored and analyzed the latest thinking around this topic, specifically:
How are large Consulting and IT Services firms thinking about the structures that enable the Strategic Sales ecosystem?
What are the key factors in considering centralization vs decentralization decisions?
How do training, compensation, and career advancement support the organizational construct and outcomes?
What Key Performance Indicators have been impacted by varying structures and process decisions?
Our hypothesis at the outset was that centralization across strategic sales and sales enablement functions is critical to a high-performing organization and substantially improves win rate, responsiveness, and client experience.
To test our hypothesis and answer the questions above, we interviewed executives at the highest levels in Sales and Sales Enablement from seven market-leading professional services firms. The group contained 3 private and 4 public companies that spanned consulting and IT services.
Based on the generous participation of these executives and their teams, we were able to synthesize our findings and derive four key themes.
#1 Centralization of Key Strategic Commercial Functions is imperative to increase sales performance for large, global professional services firms. Centralized Centers of Excellence are a proven way to drive organizational alignment and build expertise in any environment. 100% of the organizations utilizing CoEs saw higher win rates and improved responsiveness.
All the companies interviewed have implemented at least one centralized Center of Excellence related to Strategic Sales Pursuits. Two of the organizations have driven to a single Strategic Pursuits organization that contains all the resources necessary to support and drive all aspects of the firm’s largest, most strategic opportunities.
The participants all noted that implementation of a CoE for key pursuit roles enables the strongest win rates as well as greatest speed, degree of reuse, opportunities for career progression, and consistency of positive client experience. They indicated that the functions most benefiting from centralization include strategic pursuit leadership, bid and proposal management, solutioning, negotiation, and commercial/pricing leadership.
All firms utilized BU-specific (vs. centralized) resources to support smaller or less complex pursuits but relied on the CoE organizations to develop and disseminate best practices around sales methodology and winning approaches.
#2 Top-down mandates around using centralized sales resources result in the highest levels of adoption and outcomes. In matrix organizations with a strong entrepreneurship culture, deployment is constrained by business unit or Partner buy-in unless there is a strong centralized mandate.
When implementing a centralized function, or CoE, the participants believe that the strongest outcomes are delivered when corporate leadership requires business units to utilize these resources based on certain deal thresholds (typically size with some leeway for strategic importance).
In a matrix organization where partners make the final call regarding how work is performed, the leaders unanimously indicated that centralization of core pursuit functions is still an effective way to ensure the firm’s best talent and innovation is brought to bear for any opportunity.
To capitalize most effectively on the CoE assets, they recommended:
Constant communication to leaders and partners about the capabilities and resources available while highlighting key wins, win themes, trends in pricing/proposals, and value differentiators
Working with senior leadership to promote and direct the firm to use CoEs
Establishing thresholds for larger opportunities to encourage the use of CoEs
Proactively offering strategic CoE services by monitoring new pipeline entries and targeting best-fit opportunities
Improving adoption over time as win rates improve and the pipeline grows
#3 Centralization of strategic pricing functions in the Sales organization is a differentiator for many of these organizations. In more mature organizations, significant investment is made in centralized pricing expertise as well as market pricing benchmarks. For most of the organizations, this function resides in the centralized sales organization.
Six of the seven firms stated they had established at least one pricing CoE. One firm has multiple centralized support functions and is in the process of further consolidating these CoEs into a single function reporting to the CRO.
The firms that have invested in and centralized strategic pricing resources stated that they see a clear return in win rate and profitability on pursuits.
The key functions performed by the pricing are:
Tracking market pricing
Establishing “price to win”
Helping clients understand the "total cost of ownership"
Developing creative pricing approaches
Leading commercial negotiations
The participants noted that the team that supports pursuits should report into the Sales organization and remain distinct from corporate Finance, as the mission and strengths are distinctly different.
#4 Offshore support functions deliver scale and efficiency. Low-cost/best shore centers provide a reliable source of talent for scalable, repeatable functions, and are primarily used for back-office functions (research, internal tools support, some sales operations and proposal support).
Each organization has identified some level of resourcing sourced from offshore or nearshore locations.
The most common offshore functions include:
Proposal support
Graphics
Rate card management
Tool support
Research
Three engagement models emerged from the interviews.
The offshore team may:
Serve as an extension of an onshore team performing similar functions but speeds response time based on the follow-the-sun work shifts
Perform a very discrete part of a function, defined by the pursuit team or business unit, and requiring a higher degree of communication and hand-offs
Provide an end-to-end function, allowing the offshore team to exercise more judgment and be more fully responsible for outcomes
Each of the three models above has been indicated to be an effective use of offshore teams depending upon the business need, timing, and scale of the team. When an offshore team reaches enough critical mass to own an end-to-end function, significant benefits are noted in terms of ownership of outcomes and value delivered.
For narrower tasks, the hand-off to a small remote team is described as highly effective in performing the work overnight and providing results back to the onshore team the next day. When establishing sales-related CoEs, the prevailing best practice is to maintain key resources in locations with the greatest opportunity to collaborate and even co-locate with the client.
In conclusion, our initial hypothesis was validated, with seven out of seven firms articulating improved sales metrics and enhanced speed and productivity from their centralized functions. Centers of Excellence are particularly important in ensuring consistent processes and avoiding risk for public companies.
Due to regulatory requirements and market expectations regarding public companies’ earnings and forecasts, it may be easier for public companies to mandate the adoption of a centralized strategy. Centralizing the sales organization and building a strong enabling infrastructure is imperative to being able to project and then deliver the results that investors and governing entities require.
“The business of selling continues to become more complex. 63% of purchases have more than four people involved as compared to just 47% in 2017. In many cases, more than 8-10 different people are involved in a single purchase within mid-sized or large companies. Sales cycles are getting longer; in fact, 57% of vendors claim that their sales cycles have become longer because of the COVID-19 pandemic.” – Statista.
The companies that participated in this study acknowledged that landscape and the need to become more efficient at enabling their sales force necessitates the level of repeatability and continuous improvement that come with the CoE model.
The leaders emphasized the value that centralized teams deliver in terms of building skills, knowledge, and content for strategic pursuits that can then be scaled appropriately and leveraged for the broader organization.