Navigating the Choppy Waters between Sales and Service Delivery

A smooth-sailing organization values both equally
by Jeanne Urich and Dave Hofferberth, SPI Research

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Over the past several months, SPI Research has explored the subject of improving sales and service delivery collaboration. With the advent of new integrated business applications and enthusiasm for software as a service, we initially thought classic breakdowns between sales and service delivery were relics. It turns out age-old schisms between sales and service delivery remain rampant, along with disconnects in business processes that cross functional boundaries.

Gulfs between sales and service typically emerge in the choppy waters between functions — where the overly optimistic sales tide meets the risk-averse services shore. Who, and which function, is in charge of piloting client opportunities through these brackish seas?

A lack of understanding of key business processes that cross organizational or functional boundaries is at the heart of dysfunctional sales and service delivery relationships. Issues are typically the result of differing views of the processes themselves, unknown or misused levels of authority and ambiguity around who is the ultimate process owner and decision-maker.

Common breakdowns occur in the following areas:

  • Which opportunities to pursue? What resources will be required?
  • Who owns the proposal process?
  • How should deals be priced? Who makes pricing decisions?
  • Is the forecast real? What staff are required and when?
  • Communication:  Who needs to know what, when and how?

Clear business process ownership cemented by congruent goals and measurements is the basis of all high performing organizations. Synergy and alignment between the two critical areas of sales and service delivery enable each to perform more efficiently and effectively.

One way to better align sales and service is through use of the Professional Service Sales Maturity Model. By taking a more systemic approach to sales and service delivery, professional services organizations (PSOs) can optimize staff levels and initiate and complete work on schedule.

Greater clarity around roles, goals and measurements manifests in higher levels of performance and a more satisfied workforce. Maturity improvements result in superior client satisfaction and improved profitability.

The professional service sales maturity model

PSOs are in the business of providing knowledge and expertise. Their sales and marketing organizations must define target clients and the business problems the firm can uniquely solve. Their task is to generate awareness so potential buyers will consider the firm when the need arises.

Because services are intangible, clients must experience the service before value is created. So, sales and marketing have an added challenge in creating tangible proof of knowledge and experience to establish the service firm as a trusted business advisor.

The following table highlights the five stages of maturity in SPI Research’s Client Relationship Pillar, which is part of the Professional Service Maturity Model. The client relationship maturity model depicts maturity progression in solution development, sales methodology and training, partnering and pricing as the PSO moves from selling anything and everything to anyone, to a more careful and selective approach to client selection and business development.

Table 1: Client relationship pillar mapped against service maturity0710 2Source: Service Performance Insight, June 2010

Service sales and service delivery points of integration

Solution selling maturity involves discussion and agreement between sales and service delivery around team roles and the types of clients to pursue. As the organization grows up, greater clarity and consistency evolves in pricing and estimating, proposal development and contract negotiation.

Mature organizations exhibit a disciplined approach to business development with clearly defined discounting, pricing and contract terms and authority levels. The business measures both the sales and service delivery organization on revenue and margin. Integrated business applications define and reinforce hand-offs.

Examples of integration points between sales and service delivery include:

  • Agreement on target clients and solutions.
  • Agreement on the lead types to pursue.
  • Shared understanding and reinforcement of sales methodology, stages and probabilities.
  • Defined territories and primary business development roles for both sales and service delivery.
  • Shared development of major account plans.
  • Finance and legal-sponsored deal, pricing and contract reviews.
  • Defined roles for proposal development.
  • Clearly defined and mutually supportive roles, goals, measurement and compensation.
  • Customer relationship management (CRM) sales pipeline and forecast integrated with professional services automation (PSA) for resource management.
  • Dashboards providing 360-degree view of client relationships and status.

Service sales maturity improvement

Sales and marketing executives must develop effective lead generation and sales campaigns to identify new prospects and provide targeted solutions to alleviate their most-pressing business challenges. The effectiveness of the organization’s sales and marketing efforts determines the quality and size of the pipeline; win-to-bid ratios; level of discounting; and the length of the sales cycle.

Effective sales and marketing organizations continually uncover new opportunities while ensuring existing customers continue to buy and refer. Today’s successful PSO, whether embedded or independent, increasingly takes charge of its own destiny by investing in dedicated sales and marketing roles.

Solution selling maturity involves defining roles, responsibilities, hand-offs and measurements for the following business processes:

  • Lead generation.
  • Sales methodology, sales stages and probabilities.
  • Territory plans.
  • Major account plans.
  • Deal, pricing and contract reviews.
  • Proposal development.
  • Pipeline management and forecasting.

Integrated information solutions bridge the sales and service gap

Given the complexity of both sales and service delivery roles and the remoteness of employees, it is easy to understand why communication and collaboration suffer. Internet-enabled business applications can create an environment to bring people closer together. The following table highlights common business applications and provides insight into how the organization deploys them as maturity improves.

Table 2: Business applications in the client relationship pillar 0710 3Source: Service Performance Insight, June 2010

Early stage sales and service organizations use spreadsheets or stand-alone business applications to run their operations. For instance, sales might use a CRM application to track potential clients, proposals and pipeline, whereas the service organization might use a PSA solution to manage resources and projects.

Unfortunately, when the departments do not share information, both sales and service delivery may have entirely different assumptions around the desired work, deadlines, required resources and overall cost and profitability. SPI Research believes the integration level of core business applications is key to defining and improving overall organizational maturity. Properly used, business applications help illuminate and clarify core business process relationships, ownership and measurements.

It takes a village of people, tools and processes to succeed

Improving organizational maturity has nothing to do with the temperament of individuals. Organizational maturity focuses on greater awareness and actions that raise client satisfaction and profitability. In professional services, both sales and service delivery organizations must continually strive to improve communication and collaboration.

The use of information solutions provides an excellent foundation to initiate these improvements. But information systems alone will not provide the necessary levels of teamwork required to succeed. Sales and service delivery must participate in greater information sharing, as well as be flexible and agile. Only when these two organizations commit to work together will the overall PSO succeed.