A RevOps Primer for B2B.

The operations teams at most B2B organizations are siloed, with separate teams for sales ops, marketing ops, and customer success ops. This creates large gaps of knowledge between teams in both process and technology.

• Process. Each of these operations teams support their respective departments by defining and stewarding the key processes and procedures necessary to support their function. As an example, sales ops drive territory management, the deal desk, forecasting, and quote to cash processes for the sales team.
• Technology. The operations teams also manage all of the technology, which includes the platforms that their departments use, but also the data their platforms contain and the analytics and reporting their teams use to evaluate individuals, the team, functions, and company performance.

Each operations team brings its own priorities, goals, and objectives, which are often not aligned with those of the other operations teams. Where they do coincide,  differences in objectives often lead to different perspectives and approaches. This can (and will) cause the following issues:

• Lack of integration. Technology and process planning tend to be siloed, focused on the core requirements of each department, rather than the organization as a whole. There isn’t a single person or group overseeing the whole tech stack—operations teams only own the tech stack for their function.
• Complexity. Simple questions, such as how many customers do we have, or what was our churn last quarter, become difficult to answer because depending on the department, and the system used to pull the report, those answers vary. This happens when there are no agreed-upon data standards, and no agreed-upon KPIs or metrics, let alone an agreed specification on the filters to use for each report.
• Confusion. There is a lack of understanding and shared knowledge because operation teams are not aligned or unified.
• Responsiveness. As a result of the misaligned, complex, and often confused state of affairs, the time necessary to drive projects involving multiple departments is increased, and manual work abounds.

All this friction is what’s spurring the growth and development of revenue operations—RevOps for short.

RevOps aligns operations teams across the revenue cycle to drive growth through operational efficiency, improved effectiveness, and greater insights.

Two things to know about revenue operations:

• RevOps is a concept. It is the alignment of sales, marketing, and customer success operations (on the operational level).
• RevOps is a department. When that operational alignment is at its furthest point, RevOps becomes a centralized function, which subsumes marketing, sales, and customer support operations into one department.

In B2B marketing, sales, and customer success, there is increased technical complexity and sophistication.

In most B2B organizations, marketing generates leads for sales, which then closes deals and turns those leads into customers who need service and account maintenance. The unfortunate reality is that while marketing, sales, and service teams talk about alignment, their operational teams are often hindered by “brick walls.” That’s where RevOps helps.

RevOps aligns operations teams across the revenue cycle to drive growth through operational efficiency, improved effectiveness, and greater insights. Organizations seeking to move forward with RevOps and those that have implemented it tend to speak to the same 10 benefits, with shared operational objectives and alignment on KPIs topping the list.

Let’s look at these benefits in more detail.

Vision benefits.

Having shared goals and objectives between operations teams is critical because it allows for focus on the most important strategic initiatives for the company, instead of those prized by individual teams. For example, marketing operations could be interested in improving funnel diagnostics and understanding velocity and conversion rates from stage to stage. To achieve this objective, marketing needs support from sales ops. If sales operations is focused on rolling out a Configure Price Quote (CPQ) application, it might have no interest (or bandwidth) in helping marketing ops—causing an objective that serves the company to be paused.

RevOps helps companies achieve shared operational objectives and priorities, so that each team’s goals complement and support each other in achieving strategic initiatives for the company. This gets to the fact that when operations teams have separate goals, objectives, and priorities–along with unique incentives–operational silos are reinforced. They are more apt to point the finger and act in the best interest of their respective departments than in the best interest of the organization as a whole.

In the area of vision, RevOps helps companies:

• Achieve shared operational objectives and priorities

Measurement benefits.

Sales, marketing and customer success use measurement—through reporting, analytics and dashboards—to understand the performance of their initiatives and programs. To drive maximum company value, measurement initiatives need to be aligned and in support of the organization’s objectives–not just those of the departments.

Measurement goals must also come from a shared vantage point where marketing, sales, and customer success not only agree on key KPIs, metrics, and reports, but also on how they are calculated. For example, simply agreeing that churn rate is a critical metric to track doesn’t help if each department calculates it differently. Unfortunately, many organizations consider themselves “data-driven” and “fact-based,” but don’t account for the way data and facts change based on how and from where they are pulled.

In the area of measurement, RevOps helps companies:

• Align on KPIs and metrics
• Improve measurement, tracking, and forecasting
• Achieve a single source of truth for all KPIs, metrics, and reports

Technology benefits.

Technology here broadly encompasses using technology and business processes as a strategic enabler. The three benefits grouped here ultimately address treating the organization’s investment in technology as one holistic tech stack and not mini fiefdoms that, when combined do function, but resemble something more akin to Frankenstein than a purpose-built end-to-end process. Each department is usually responsible for its own tech stack, but no one owns the tech stack for the entire company, and this is where RevOps can help a company be more strategic with its technology overall.

In the area of technology, RevOps helps companies:

• Unify management of key processes
• More tightly align their technology stack
• Use technology more strategically

Operations benefits.

Operations boil down to day-to-day operations administration. Bringing your operational teams together through RevOps enables you to increase responsiveness for priorities and project initiatives that span multiple departments. Centralizing your operations functions also enables integrated technology planning and process management, which in turn reduces defect and rates. Many of these benefits derive naturally from having one maestro that can see how any changes or modifications will affect all of the groups in the organization.

Additionally, standardizing the tech stack across these functions can potentially reduce costs. For example, marketing, sales, and customer success operations could leverage one data scientist or resource who holds expertise in data visualization, versus needing to each source this expertise in their own (siloed) organization.

In the area of operations, RevOps helps companies:

• Increased responsiveness
• Reduction in costs through the elimination of redundancies
• Decreased errors/defects in deliverables and processes

As noted above, RevOps is both a concept and a function. While many organizations perform some level of RevOps, only a fraction have a centralized RevOps function. 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.

Let’s take a closer look at each of these levels.

Nonexistent. 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. These organizations tend to be smaller, with fewer than 25 employees, and are limited in their use of technology. For example, instead of having a CRM (like Salesforce.com), they may be managing their customer list in an Excel spreadsheet or using a project management board like Trello for account management.

Not aligned. Organizations at this level have operations teams, but they are siloed. Marketing Ops doesn’t talk with Sales Ops or Customer Success Ops. (To understand why this is problematic, think about trying to remodel your house with a plumber who never talks to the carpenter who never talks to the electrician.) Relatively few organizations fall into this category but the ones that do are typically smaller, heavily led by sales, and relationship-driven. As a result, the marketing and customer success operations teams are not on equal footing and there is little to no coordination with sales.

Opportunistically engaged. At this level, operations teams tend to their own departments, but engage each other when there is a shared objective. This means that when sales operations and marketing operations do talk, the focus is on what they need from each other, not how they can help one another. This type of communication is more unstructured. In our house remodel analogy, you would be at this level is your carpenter talked with the plumber but only when 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. Roughly one third of organizations we speak with fall into this category. 

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 collaboration is 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. Imagine that the company you hired for your home remodel has its own carpenter and electrician, but outsources the plumbing work. While the process between the carpenter and electrician is highly efficient, communications with the plumber are unnecessarily confusing, adding hidden costs to the project.

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 with each other and more centralized, a company tends to more strongly agree that its 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 KPIs 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.

Okay, you’ve seen the benefits of RevOps and understand that it’s in your organization’s best interest because it improves the dynamics between your departments and keeps everyone focused on the same goals and KPIs. That all sounds great, but what’s the catch, and what are the challenges? When it comes to establishing a centralized RevOps function, it turns out that the perceived challenges and the actual challenges are quite different.

Perceived obstacles in establishing centralized RevOps.

The two largest perceived obstacles in establishing a centralized RevOps function—as referenced by individuals that don’t have one in place—have to do with goal alignment and authority.

DIFFICULTY ALIGNING ON GOALS.

Setting up a centralized RevOps function means putting forth joint goals instead of siloed tactics from each department. So it’s interesting to note that a lack of shared operational goals and methods of collaboration are among the most cited concerns about centralizing RevOps. In organizations where there isn’t a strong relationship among operational teams, there is often a fear that aligning on shared goals will result in moving away from the goals and objectives that each team is currently focused on.

LOSS OF AUTHORITY.

Functional leaders not wanting to lose authority is often brought up as an obstacle when discussing RevOps. This response is primarily driven by functional leaders that equate the number of direct reports they have to status and prestige, and as such, RevOps risks reducing their stature. There is also a concern that it may limit a person’s career trajectory; if there’s only one head of sales, marketing, and customer success operations, there’s only one senior position for operations, instead of three.

Actual obstacles in establishing centralized RevOps.

The challenges that you perceive, however, are not necessarily the actual challenges—or may not be as severe as you think. Here’s what companies that have actually established a centralized revenue operations function tell us were their most significant obstacles:

UNCLEAR VALUE.

Difficulty articulating the value of RevOps is more of an issue than anything else. Despite the fanfare, the newness of this function is like owning a cell phone in 2002 vs 2020. Selling RevOps to senior executives is difficult because more often than not, they’re less knowledgeable on the organization’s operational backbone than you are. To help them understand, try using presentations and reports that help support your business case. Try to connect with peer leaders in other organizations that have already made this transition to learn real experiences you can share with your executive team. Finally, demonstrate that you have a clear transition plan.

CROSS-TEAM COLLABORATION.

Fear of the unknown is an obstacle to any change, and one that must be acknowledged. When it comes to centralizing RevOps, an unknown for teams is how they will work together. If the teams have not interacted before, start by introducing them to each other more and more beforehand. Have people sit in on meetings with another team to observe and learn from them. Sit the teams closer to each other so they can naturally run into each other more often and organically start a dialogue. Finally, make sure to communicate why you’re making this change. It’s not just executives who need to understand the value impact of a centralized RevOps function, but ops team members will care more about how it affects their ability to succeed in their jobs than the company’s bottom line.

Finally, the concern that functional leaders won’t want to lose control is still a challenge listed by the companies that have established a centralized RevOps function, but the frequency that it’s referenced as a top obstacle is actually quite low. A way to address this concern is to have senior executives talk to their counterparts at other companies that have enacted a centralized RevOps function. It often makes a huge difference to hear from two or three people that have already made that move forward.

Organizational alignment means more than hosting recurring meetings between different operations teams. A company’s technology and business processes need to be fully integrated. A clear path forward to driving technology and business process integration is through RevOps—specifically, a centralized RevOps function.

However, for many organizations jumping right into a centralized revenue operations function isn’t feasible. For example, most companies over $50m will have operations teams in place, all with their own norms, procedures, and processes. These organizations should focus on driving operational alignment first. In essence, don’t boil the ocean. Start with a pot of water.

Operational alignment comes down to two things: your organization and your technology. With that in mind, here are six actionable steps to help drive operational alignment between sales, marketing, and customer success.

Organizational steps.

Marketing and sales and customer success operations need to be integrated if they ever hope to be aligned. If there’s no relationship between these teams, then there’s no natural collaboration, which is vital to supporting a centralized RevOps function.

1. INTEGRATE YOUR TEAMS.

If you want your teams integrated, then you need to create a physical environment that allows it to happen. To do this, force it AND let it grow organically. Sounds contradictory, right? Not necessarily. Force it to happen by sitting the operations teams next to each other, but then allow everything else, mainly the relationships, to happen organically. To stage the ideal environment for your integrated team their desks need to be next to each other, and if not, use desk swaps. In this case, once a week, a member of the marketing ops team sits with the sales ops team, a sales ops member with customer success, and vice versa. If your team is remote, you can schedule a weekly sync call. You can also simply include each other on your weekly status updates via email and the like. Once this integrated environment is established, the operations teams will organically find common ground, mingle, and eventually collaborate.

2. CREATE AN OPERATIONS REVIEW BOARD.

Before technology is purchased or process changes are made, big decisions need to go through an operations review board. The operations review board needs to ponder questions such as why it’s needed, what it impacts, and what it requires. Having an operations review board is crucial to keeping everyone on the same page and making informed operational decisions that look at the company as a whole, rather than optimizing for an individual function. It’s also critical to have the finance team require the review board’s approval on all tech spends over X amount of dollars—to avoid any surprise purchases that might reinforce the siloed practices you’re trying to move away from.

3. ENFORCE JOINT PLANNING.

It’s not uncommon that operations teams only casually or opportunistically meet. For true alignment, marketing, sales, and customer success operations know what each other is working on now and what they plan to work on next week/month/quarter. Force this to happen with a mandatory monthly meeting. In these meetings, it’s important to have a shared roadmap across these functions to allow for transparency between the different groups and promote open communication.

Technical.

Technology is the backbone of every department—it’s what enables and reinforces processes and procedures and what makes reporting possible. Technology also helps unify (or disrupt) departmental alignment. Here are three technical steps to take to promote alignment among your ops teams.

4. ESTABLISH SHARED REPORTING.

It’s vital that every stakeholder understands which metrics and performance indicators are most important and how you’re going to measure them. While shared reporting is a main benefit of RevOps, you don’t need to have a centralized RevOps function to agree on key metrics, reports, and KPIs that should be tracked regardless of the function or department. In doing so, don’t try to overhaul everything at once. Start by having the departments focus on the 10 most important reports that all of the functions use. From there, create a standardized report that all functions can go to when they need to know, for example, last quarter how many MQLs were created or pipeline opportunities. Finally, purge ALL other similar reports, so only the standard ones are used.

5. SET DATA STANDARDS.

Of course, to have reporting that stitches together, you need to ensure your data across departments is standardized—this includes things such as ensuring naming conventions and field values are consistent across applications. Review the fields that are in all your systems and see if they add up. Likely, you’ll find differences in field names, picklist values, and validation that need to be addressed. As with shared reporting, focus on the core fields first, and then work your way back through the rest.

6. BUILD DATA FLOWS.

Lastly, you need to have a strong understanding of how that data flows to and from other applications. Out of all your different investments in sales, marketing, and customer success, which update other applications and systems? Remember, the source of the truth does not come from a single system—the source of the truth varies based on the item in question. For example, marketing tactic performance is likely best measured from one’s marketing automation platform, a list of active customers from one’s finance system, and details on sales pricing strategy from a Sales Configure, Price Quote (CPQ) application.

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.