WEBINAR: Transitioning from CMO to CRO: Insights from the Front Lines.

Register Now

Blog

The impact of centralization on revenue operations (RevOps).

Read Time: 4 Mins

Rev Ops is a concept. It’s the operational alignment of sales, marketing, and customer success. And when that operational alignment is at its furthest point, RevOps becomes a centralized function. Once centralized, it subsumes marketing, sales, and customer support operations into one department. In speaking with and interviewing hundreds of B2B organizations on operational alignment, we have noted that the level of RevOps centralization in B2B tends to fall into six primary groups, ranging from nonexistent to fully centralized.

Approaches to RevOps centralization.

  • Nonexistent. Nonexistent isn’t a place you want to be because it’s not a growth-minded state. The organizations at this level don’t have dedicated operational resources. They may have a field marketer who dabbles in marketing automation and web content management. That’s petrifying, but fortunately, this tends to be relegated to smaller organizations, typically under 25 employees. Often, these organizations have little in regards to technology. For example, instead of having a CRM (like Salersforce.com), they are more apt to manage their customer list in an Excel spreadsheet or use a project management board like Trello for account management.
  • Not aligned. These organizations have operations teams, but they never venture out of their own silos. Marketing Ops doesn’t talk with Sales Ops, or Customer Success Ops. The same can be said for each of the other operations teams. This level is like remodeling a house where the plumber never talks to the carpenter who never talks to the electrician. At this level, each operations team is a stranger to the others. Relatively few organizations fall into this category but the ones that do are typically smaller organizations that are heavily led by sales and are relationship-driven. As a result, the marketing and customer success operations teams are not on equal footing and there is little to no with sales.
  • Opportunistically engaged. These operations teams tend to their own departments, but engage each other when there is a shared objective. Roughly 1/3 of organizations I speak with fall into this category. These are organizations where their operations teams only engage when they need something. This means that when sales operations and marketing operations do talk, it’s just about what they need from each other, not how they can help one another. This type of communication is more unstructured. Sticking with the remodeling of a house analogy, this level is if the carpenter talks with the plumber but only because they are both working in the bathroom at the same time. In the end, these operations teams collaborate occasionally, but not effectively and only for tactical projects.
  • Aligned. Aligned operations teams meet on a regular cadence to plan, work, and discuss operational issues. Think an hour meeting once a week. At this level, the carpenter, the plumber, and the mason have a shared blueprint. This makes working and collaborating together easier but it’s not always a given, and there’s still room for error. Furthermore, at this level, teams still report back to their own function, hold their own meetings, and prioritize their own function rather than what’s best for the company.
  • Partially centralized. Partially centralized means some operations roles are centralized, but there are still operational resources that report directly to functional departments. This would be like if the company you hired for your home remodel has a carpenter and electrician from the same company, but the plumber is from a different company and they report back to their own company. It all comes down to efficiency because saving time, saves money. Unnecessary confusion or missed communication adds hidden costs to projects.
  • Centralized. Centralized, means what it says. All operations team members roll up into one function and not into the departments they support. This is more frequent in small to mid-sized organizations, especially in B2B SaaS and those with a subscription-based offering. Here is where the company working on your home remodel does everything, and there’s no second or third party side communication going on that could cause scheduling or construction issues. The project is managed top to bottom, reporting back to the same place and with the same information.

Increased RevOps centralization improves marketing and sales alignment.

What’s interesting is how centralization directly influences alignment. As marketing, sales, and customer success operations become more engaged and more centralized, a company tends to more strongly agree that their systems, processes, and reporting are tightly aligned.

This isn’t shocking. It makes sense that the more operations teams talk and collaborate the better thought out end-to-end processes and systems integrations tend to be. It’s also more likely that KPI’s and metrics are standardized between departments, and how they are actually reported on and pulled from systems is also standardized.

So, if you view operations as strategically imperative to your organization – and you should – your operations teams need to be aligned at the bare minimum. If you’re not aligned or engage opportunistically, then there’s no doubt your operations teams are putting in a lot of manual work and additional effort. There’s a better, more efficient, and less complex way forward, driven by RevOps centralization.

The Iron Horse insight.

RevOps is a way to drive alignment forward—and there are several approaches one can take. If you’re a small or medium-sized organization, especially one with a recurring revenue stream, a centralized revenue operations function is an obvious best practice to follow. However, for larger, more complex organizations with processes that have been built with the existing organizational structure in mind, introducing a fully centralized model is likely more overly disruptive than it is necessary. In this case, the goal should still be to take steps toward standardizing processes and technology, but it’s important to understand that the path will be different and will not end with centralization.

Related content.

Subscribe to our blog.
Get unstuck with the most interesting business ideas and our insights delivered to your inbox.

© 2024 Iron Horse. All rights reserved. Privacy Policy