Smart Actions You Can Take to Manage the Growing Cost and Complexity of the Sales Technology Stack

I recently I spoke with a CRO at a major enterprise SaaS solution vendor who shared that they have 300 software tools and that sales reps are expected to use over 100.  I was dumbfounded.  And it started me to think. How can this be?  How does this happen?  But more importantly, how do we fix this?

There has been a proliferation of tools.  In our Revenue Operations 100 analysis, we worked hard to consolidate the landscape of solutions down to 100 best of class automation tools.  And trust me, there are hundreds more that didn’t make the list, all of which are in use somewhere in the world.  Many of these tools were born to ‘fill a niche’ which then when added to the tech stack, became yet another thing that finance had to pay for, reps needed to learn and operations needed to support.

Many are sold on the “shiny object” of the new functionality.  While at Red Hat, I had a Regional Sales GM corner me to thrust a business card of ‘a guy he met on the plane’, who had “the solution” for us. Really? Face it, our sales people are really good at convincing people, that is what they are paid to do.  However, we need to solve our unique problems in a targeted and methodical way.  Another pattern I’ve seen, more common in the SaaS space, is the “give to get” or “I’ll buy yours if you buy mine”.  The variable cost of giving away the “candy” for the first year is low, especially since many don’t implement right away.  These behaviors and others contribute to “bloat” of the sales technology stack.

This is a very real problem.  In the “State of Sales, 5th Edition” just published by Salesforce, survey respondents stated that reps are overwhelmed by too many tools, on average sales teams use 10 tools simply to close deals. In response, sales organizations are planning to streamline their tech stack.  This could enable reps to focus more on the human side of selling, and less time switching from tool to tool. In fact, responding Sales operations professionals reported that 94% of sales organizations plan to consolidate their tech stack in the next 12 months. This data came from double-anonymous survey with 7,775 sales leaders from 38 countries in late 2022.  The survey generated 7,775 responses from 38 countries. That means virtually ALL organizations have a massive change management challenge (and opportunity) ahead in 2023. 

This is an existential issue for sales leaders. While the prevailing mentality for the last two decades was “grow at all costs” where the solution to every problem was to add a best of breed point solution to the sales stack. In the last few years a variety of forces has shifted that focus dramatically: The rising role of technology in the commercial model and budgets. The proliferation and complexity of the associated technology stacks – sales tech, martech, and analytics. And financial pressure to retrench in a recession. These combined forces haves shifted the focus from buying best of breed software to consolidating, connecting and rationalizing the commercial technology portfolio to sell more for less. This makes plugging a “point solution” into an increasingly connected and consolidating commercial technology portfolio more of a problem than a solution.

Another large aspect of this problem is there is no established and financially valid blueprint for getting the many different channels, teams, technologies in the growth equation working together. Business leaders lack an objective and comprehensive organizing principle for coordinating and connecting the many parts of their commercial technology portfolios. They lack an operating system for managing these growth assets and the data, teams, workflows and processes they support.

Something has to change. Until these fundamental issues are addressed, the potential of technology and AI to unlock consistent, profitable, and scalable growth will not be realized.

So, how to fix this issue?  In our book “Revenue Operations: A New Way to Align Sales and Marketing, Monetize Data, and Ignite Growth” – we outlined six “Smart Actions” that organizations can take to better align revenue teams, operations, systems, and processes to ignite growth.  Those six Smart Actions are designed to help your revenue teams to:

  1. Get better visibility into the revenue cycle
  2. Simplify the day to day selling workflow
  3. Share marketing insights with frontline sellers
  4. Develop and retain high performing selling talent
  5. Make selling channels more valuable and effective
  6. Streamline and personalize the selling content supply chain

One could argue that consolidating the tech stack as Salesforce suggests everyone will do in 2023 would fit ALL of these Smart Actions, albeit some in a greater way. The greatest benefit of tech stack consolidation, besides the expense benefit that our CFOs expect and appreciate, comes from the benefit of tech stack consolidation on, wait for it,  Simplification.  Simplifying the tech stack directly simplifies the selling workflow, makes it easier to attract, train and retain sales reps and makes all the selling channels more effective.

My personal favorite, and our suggestion for how to get started is by simplifying the selling workflow.  Be ‘process led’, start fresh with what you need to happen, and document using your favorite workflow tool, or just write it down.  At Red Hat we documented the entire ‘lead to cash’ process using post-it notes, which allowed the ‘spirited debate’ common with the culture, before agreeing and then capturing in a proper tool.  Once you have your desired state, revisit the tools and you’ll likely find that some are unnecessary, or more likely that the functionality has evolved with earlier ‘point solutions’ such that they can replace other tools that might be now duplicative.  Salesloft and Highspot are great examples of platforms that have dramatically and logically expanded over the years.  Maybe now you don’t need a dedicated conversational intelligence platform or a dedicated LMS, because you can provide that needed functionality with an interconnected sales enablement platform like Salesloft or Highspot directly as part of their broad platform vision and inclusive technology roadmap. 

So if 94% of sales organizations will consolidate their technology stack this year to sell more for less – the question  you need to be asking is not whether to consolidate, simplify and optimize it – but how and how fast. How can you connect the dots in a way that improves your rep user experience. How can you knit together the different pieces of the commercial technology ecosystem to generate more margins, conversions and cash flow for the business.  your sales organization doesn’t address this opportunity?  Don’t get left behind.

To help answer these pressing questions, our faculty just published a guide to tuning the revenue growth engine.  It draws upon the experience of over a hundred leading organizations to provide a financially valid blueprint for consolidating, simplifying and optimizing  the commercial technology portfolio.

You can learn more about our financially valid blueprint for consolidating, simplifying, and optimizing  the commercial technology portfolio at our CXO NEXT Revenue Operations management forum on September 21st in New York City. At this invitation-only management workshop members of our Revenue Operations community will participate in open discussions about the evolution of sales operations, training, and enablement functions and the integration with analytics and operations teams in marketing, finance and customer success. Operations leaders and managers are welcome to in a peer-led and research-informed discussion of the hottest issues facing RevOps leaders. Topics will include: How to best overcome the challenges of managing change, balancing results with capability building, fostering teamwork along the revenue cycle, prioritizing smart actions, and consolidating the commercial technology portfolio. You and learn more about this forum at the link below.

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