This rivalry has gone on for quite some time and is reminiscent of the decade-long battle between Ellison and CRM pioneer Tom Siebel. That one ended with Oracle acquiring a battered Siebel. Can we expect a similar outcome from this more recent feud? Does Oracle need to own Salesforce to own the hosted CRM space?

Software Advice, a company that provides customer relationship management software reviews, wants your help in answering that question. Visit their blog and take the survey at the bottom.

Guest post by Lauren Carlson.

“Xactly has grown rapidly by making customers successful with sales performance and incentive compensation management delivered via the cloud,” said Kendall Collins, chief marketing officer, salesforce.com. “We expect that Xactly will continue to enhance their leadership position by delivering new innovation, such as real-time collaboration capabilities, in their cloud offerings to further ensure customer success.”

The additional funding will enable Xactly to further capitalize on new market opportunities and continue its strong track-record of company growth and global customer excellence. The capital will also be used to continue investments in the company’s flagship Xactly Incent offering, the industry’s first 100-percent SaaS-based incentive compensation solution, and extended SPM product suite, including Xactly Analytics and Xactly Express, Xactly’s SPM offering to small to medium businesses that are ready to move from excel spreadsheets to a cost-effective SaaS solution.
 
Companies Rapidly Adopting SaaS-Based Sales Performance Management

The SPM market continues to expand as companies look to remove error-prone spreadsheets from the sales compensation management process and begin to use incentive compensation as a strategic, behavior altering weapon. In its recent “MarketScope for Sales Incentive Compensation Management Software”1 report, Gartner estimated that “from 2011 to 2014, investments in SPM solutions will increase by 20 percent year over year as companies rebuild sales capacity” and estimates “by 2011, more than 60 percent of new sales ICM software projects will source from a hosted or SaaS option, based on an annual subscription.” Xactly received a “Positive” rating in the report.

Xactly helps companies of all sizes reduce the bottom line costs associated with incentive compensation management, while increasing top-line revenue by helping drive the desired sales behavior. More than 300 companies are currently benefitting from Xactly SPM solutions including American Express, Blackboard, Cablevision, ClairMail, DHL, Dun & Bradstreet, GlobalEnglish, Halliburton, InsideView, Motorola, Perkin Elmer, salesforce.com, Time Warner Cable and Xerox.
 
About Xactly Corporation
Xactly Corporation is the market leader in on-demand sales performance management. The company’s SPM Suite of products, enables sales and finance executives to design, implement, manage, audit, and optimize sales compensation management programs easily and affordably. Xactly’s solutions automate the process of aggregating data from disparate systems into a secure, hosted repository, and enable companies to leverage this business data, which is the lifeblood of sales performance management. Xactly helps companies improve operational performance, optimize sales effectiveness, proactively manage risk and compliance, and maximize profits. The Xactly family of products is used by sales and finance executives, compensation analysts, sales operations and sales professionals across a variety of industries, ranging from SMBs to large enterprises. For more information, visit www.xactlycorp.com or call 1-866-GO-XACTLY (469-2285).
 
About Bridgescale Partners
Bridgescale Partners is a Menlo Park, California based growth equity firm providing expansion capital to U.S. and Canada-based, later-stage technology companies.  The investment team has more than 50+ years of venture capital experience investing in early- and later-stage technology companies.  Additionally, the team has invested in more than 100 technology companies in the software, security, digital media, Internet, and communication markets.

I always thought Salesforce was a stock to keep an eye on since I started this blog and the company shows no signs of slowing down in terms of growth or number of applications they can build solutions for. What will be interesting to see is if the stock can stay above $100 for the medium to long term or whether this is just a short term bump up.

What are your thoughts as to its long term potential?

If you’re interested in attending, I’ve secured a discount code for my readers (see details below).

*Please note that while this blog focuses on Salesforce related events, this is a Sales and CRM focused event and therefore I deemed it relevant to post here even though the event is sponsored by Microsoft Dynamics. Just a heads up.

The Art of Sales has attracted thousands of sales and marketing professionals from across Canada. On October 19th, 2009, North America’s largest sales conference is coming to Vancouver to present you with the key fundamentals and best sales practices required to ensure stability and growth for your business in a changing world.

Featuring an exceptional line-up of best-selling authors, speakers, and sales visionaries focusing on newly developed methodologies for relationship development, productivity and sales strategy makes this conference a must attend. Take advantage of this limited time special offer which is not available to the general public.

For more details, follow this link. (Opens a .pdf)

Register Today – 1.866.99.ART.OF Complete your registration in one of 3 easy ways; PHONE – Call toll free 1.866.99.ART.OF (27863) and ask for Richard ext. 29 FAX – Fax in your registration page to 905.266.9860 EMAIL – richard@theartofproductions.com Reference Code RPA-29

Better late than never right! Without further ado….

Salesforce launched their new Service Cloud 2 update today and contrary to what some main stream blogs have been saying about it, this update is not all about Twitter.

According to Salesforce, the release of Service Cloud 2 signals a key shift in their entire business focus as the market for customer service cloud applications dwarfs the market for CRM or at least the segment Salesforce is after. In essence this is their next billion dollar opportunity.

There are three main components of the new update:

• Salesforce Knowledge: Knowledge as a Service
• Salesforce Answers: Crowd-sourced Knowledge
• Salesforce for Twitter: Real Time Conversations

For more in depth information and demos, visit the links above or head over the the Service Cloud 2 section on the main Salesforce website.

Here’s the official release:

Salesforce.com Unveils the Next Chapter in the Customer Service Revolution with Service Cloud 2 – Leading Market Momentum and New Defining Technologies, including the Industry’s First Knowledge-as-a-Service

8,000 companies have already standardized on the Service Cloud including Extra Space Storage, NJ TRANSIT and Plantronics

Product innovations include Salesforce Knowledge, the world’s first Knowledge-as-a-Service; Salesforce Answers, crowd-sourced community knowledge; and the general availability of Salesforce for Twitter

For the first time, companies can amaze their customers with an integrated customer service experience that leverages their own agents as well as real-time conversations happening throughout the cloud

SAN FRANCISCO, Sept. 9 /PRNewswire-FirstCall/ — Salesforce.com (NYSE: CRM), the enterprise cloud computing company, today announced the next chapter in the customer service revolution with Service Cloud 2. The Service Cloud, announced in January of this year, is the next generation solution for customer service – it exponentially increases the quality of service, while lowering the cost, by leveraging the expertise of the community. Since its introduction, the Service Cloud has led market momentum with 8,000 customers and received a number of industry accolades. The Service Cloud will also deliver entirely new product innovations for the customer service industry by introducing the world’s first knowledge base designed for cloud computing – Salesforce Knowledge; an entirely new way to look at customer communities and discussion forums – Salesforce Answers; and Salesforce for Twitter, which allows companies to monitor and join the customer service conversations taking place on Twitter. The customer service application market represents a major opportunity for salesforce.com, which according to IDC will be worth $4.2 billion by 2012(1).

Service Cloud 2 – Customer Success and Market Momentum for the New Customer Service Standard
Eight thousand companies, including Extra Space Storage, NJ TRANSIT and Plantronics, have standardized on the Service Cloud for their customer service operations – representing a 175% growth in business year over year.

Companies using the Service Cloud have seen a 28% increase in customer satisfaction, 25% increase in call deflection, 30% increase in first call resolution, 37% rise in service and support productivity and a 26% increase in customer retention, according to a recent third party survey.

Salesforce.com was placed in the leaders quadrant of Gartner’s Magic Quadrant for CRM Customer Service Support Contacts(2).

Since January of 2009, the Service Cloud has won the 2009 TMCnet CRM Excellence Award, Network Products Guide 2009 Innovation Award, CRM Magazine Service Leader Rising Star Award, and the IP Contact Center Technology Pioneer Award for Best IP Contact Center Service. The Service Cloud was also named to KMWorld’s list of Top 100 Companies in knowledge management.

Salesforce Knowledge – The World’s First Knowledge-as-a-Service

A year after salesforce.com acquired Instranet, salesforce.com will offer the world’s first Knowledge-as-a-Service, the first ever multi-tenant knowledge base designed for cloud computing. The core Service Cloud knowledge base built on Force.com will deliver:

Rapid Deployment: Companies will be able to deploy their knowledge base in a matter of days and extend the technology to mobile devices and public websites. Companies will be able to deploy Salesforce Knowledge without having to install and manage hardware or software.

Immediate Results: Customer service agents will be able to find the right answer, the first time, ensuring that companies amaze and delight their customers with a truly integrated customer service experience.
Google Accessible: Companies will be able to utilize the latest Force.com capabilities, including Force.com Sites, to expose knowledge articles out to the Internet so that customers can find information on the public Internet and through search engines such as Google.

Simple Customizations: Users will be able to quickly and easily deploy changes and customizations to the knowledge base to fit a company’s dynamic and evolving needs.
Automated Upgrades: Product enhancements will be automatically released three times a year. Customers will no longer have to worry whether their applications will continue to work with other hardware and software after an upgrade.

Secure and Trusted: Companies will be able to leverage all the benefits of the proven security, reliability and scalability of salesforce.com’s trusted global infrastructure.
Salesforce Answers – Crowd-Sourced Knowledge

For years, customer service centers have been limited to knowledge articles produced by company employees, and have not benefited from the explosion of consumer wisdom that exists across the Web. Today, online communities and social websites hold a wealth of knowledge and facilitate conversations around uncommon problems, new product use cases, best practices and much more.

Utilizing the Service Cloud, Salesforce Answers will deliver a unique online experience that helps companies leverage the expertise in the cloud to bring the right answer to their customers. Salesforce Answers will enable companies to:
Start the Conversation: Create a complete, customizable website that facilitates question/answer style conversations between customers. Encourage the community to ask, rate and answer questions and issues posted to the site.
Crowd-Sourced Knowledge: Filter the appropriate knowledge created on Salesforce Answers directly into the Service Cloud’s knowledge base, ensuring that customers, agents and partners will all have access to the best knowledge available.
Leverage Facebook: Companies will be able to set up a Salesforce Answers community directly on a Facebook company fan page, allowing the company to harness knowledge from the 250+ million Facebook members.
Create Dynamic Customer Communities: In combination with Service Cloud features like Salesforce Ideas, companies will be able to create dynamic, interactive customer communities.
Salesforce for Twitter – Join Real-Time Conversations on Twitter
Twitter provides a free platform for users to answer the question “What are you doing?” in 140 characters or less and broadcast the answer to a broader community. These “tweets” can cover any topic area, including specific companies, brands and products. In today’s Web-driven world where there is an expectation of real-time interaction, Salesforce for Twitter and the Service Cloud give companies an easy way to join the real-time customer service conversations happening on Twitter by enabling them to:
Search Twitter in Real-time: Search through the millions of tweets happening on Twitter every minute to find the most relevant customer service conversations.
Monitor Service Issues on Twitter: After identifying an appropriate tweet, a company can capture and monitor a service conversation in the Service Cloud and track the conversation.
Join Twitter Conversations: Salesforce for Twitter empowers enterprises to be active participants on Twitter by enabling them to engage in Twitter conversations, right from within the Service Cloud.
Establish a Twitter Support Channel: Customers can tweet their customer service issues and instantly create a case within the Service Cloud. Once the case is created, companies can leverage internal business processes to route cases to the most effective service representatives.
Deliver Real-time Knowledge: Salesforce for Twitter facilitates the delivery of expert knowledge back into the Twitter community by posting tweets directly from the Service Cloud’s knowledge base.
Comments on the News:
“With Service Cloud 2, salesforce.com is doing for customer service what we did for sales: proving that the cloud is a better way. The customer service market is being held back by traditional technology. With two-thirds of customer service interactions moving to the cloud and the popularity of social networks, it is high time for a change. I am excited by the momentum we are seeing in the customer service market and believe it is the next billion-dollar opportunity for salesforce.com,” said Marc Benioff, chairman and CEO of salesforce.com.
“We’ve seen more and more businesses use Twitter to make smart, meaningful and timely connections with their audience. We are excited to work with salesforce.com as they help businesses join the millions of conversations happening every minute on the web,” said Evan Williams, CEO of Twitter.
“The Service Cloud’s knowledge base will give companies access to the best answers for a situation culled from Twitter’s 45 million users and Facebook’s 250 million users. The Service Cloud makes an important advance on social networking by helping enterprises harness the power of real-time conversations and crowd-sourced knowledge to benefit their companies,” said Denis Pombriant, Beagle Research.
“Salesforce Knowledge and the Service Cloud will definitely help our company increase agent productivity and customer satisfaction, an incredible testament to the power of cloud computing,” said Kimberly Jansen, Misys Banking Systems.
“Comcast-Spectacor is now a leader in leveraging cloud computing to enhance our relationships with the Flyers and 76ers season ticket holders because of salesforce.com. The Service Cloud and Salesforce for Twitter have enabled us to connect directly with our customers on Twitter and integrate these real-time conversations with our customer service strategy,” said Mark DiMaurizio, Comcast-Spectacor.

Pricing and Availability
Salesforce Knowledge will be priced at $50 per agent, per month for salesforce.com customers and is currently scheduled to be available in the fourth quarter of fiscal year 2010.
Salesforce Answers is currently in pilot and is currently scheduled to be available in the first quarter of fiscal year 2011.
Salesforce for Twitter is available today at no additional charge on the Force.com AppExchange for Professional, Enterprise and Unlimited Edition customers.

Supporting Resources
For more information, please visit http://www.salesforce.com/servicecloud2
Follow salesforce.com on Twitter @salesforcenews

Here are a few quick facts I learned by speaking with Sean Whiteley, Salesforce.com’s  Sr. Director of Product Marketing:

• People have been asking for basic account and contact management and that’s what Contact Manager gives them.
• Helps you start getting organized
• $9 per month per user for up to two users
• Social Media custom links to Twitter, Facebook, linkedin.com and others can be added to contact records
• No website integration or Google Adwords integration
• Built on Force.com platform which means free updates and backups
• Full Google Apps integration and full email system integration
• Designed for people who don’t know Salesforce or CRM
• The training videos will use laymans terms a.k.a they will speak in your language and not Enterprise CRM language!
• Stay tuned for new tools, new communities and new websites from Salesforce for Contact Manager users

Here’s the official release:

Now Everyone Can Manage Business Contacts and Customers in the Cloud!

For only $9 per user, per month, Contact Manager Edition provides individuals and very small businesses with all the benefits of salesforce.com and cloud computing – the flexible, pay as you go model, automatic upgrades and no hardware or software

Salesforce.com Contact Manager Edition

SAN FRANCISCO – September 2, 2009 – Salesforce.com [NYSE: CRM], the enterprise cloud computing company, today announced Contact Manager Edition, a new edition from salesforce.com that provides the essential tools needed to manage business contacts and customers in the cloud. Contact Manager Edition introduces salesforce.com to an entirely new audience, very small businesses and individuals, ensuring that everyone can enjoy the benefits of cloud computing for only $9 per user, per month.

Contact Manager Edition – Manage Customer Interactions in the Cloud

Contact Manager Edition enables any company to jump-start their business by tapping into the power of the cloud and provides users with a wealth of features including:

• Contacts and Accounts – With Contact Manager Edition, users can store and manage all contacts and accounts in the cloud. Now users can access this vital information regardless of location – all you need is an Internet connection.

Salesforce.com Contact Manager Screen Shot

• Outlook and Email Integration – Now, anyone using Contact Manager Edition can easily track email communications from Microsoft Outlook, Gmail, Yahoo or any email system, keeping a complete record of customer interactions for better sales execution and improved customer satisfaction.
• Reporting – Run pre-configured and customized reports on your contacts, accounts and associated activities to gain powerful insights.

• Customization – Contact Manager Edition is a solution that can be tailored to fit a user’s unique needs. Users can customize Contact Manager Edition to track the data that is most important for their needs.
• Google Apps – Companies using Contact Manager Edition benefit from an out of the box integration with Google Apps, combining essential applications for productivity (email, calendaring, documents, spreadsheets, presentations, instant messaging, video) and CRM.  This combination introduces an entirely new way for users to communicate, collaborate, and work together in real time over the Web.

Salesforce.com and Cloud Computing – The Right Choice for Every User

Background and benefits of cloud computing:

• Ten years ago, salesforce.com introduced cloud computing, a new technology delivery model that allows users to access applications over the Internet without having to install and manage hardware or software.
• With salesforce.com and cloud computing, customers pay as they go and are up and running in less time than with traditional software applications.
• Three times a year, salesforce.com customers receive an automatic upgrade that delivers new features and functionality. These upgrades do not break any customizations or integrations and is completely seamless and invisible to the end user.
• Time and again, customers choose the low cost, low risk, and fast results of salesforce.com and cloud computing over expensive hardware, software, and data centers that burn through precious capital and yet rarely produce the promised returns.

Background and benefits of the Force.com platform and infrastructure:

• Contact Manager Edition is built on Force.com, a complete platform that provides users with everything they need to develop any application, on any device and deliver it to any user.
• Force.com is a trusted platform because it is enterprise-tested and serving more than 63,200 successful customers around the world.
• Additionally, customers using Contact Manager Edition gain all the benefits of the proven security, reliability and scalability of salesforce.com’s world-class global infrastructure.

Quotes

• “Salesforce.com has always been committed to democratizing software and making cloud computing accessible to businesses of all sizes,” said Marc Benioff, chairman and CEO of salesforce.com. “Contact Manager Edition empowers very small businesses and individuals to acquire new customers and experience success.”
• “At Trazzler we are using Contact Manager Edition to manage thousands of business contacts, each segmented by category, company size, and geographic region. Contact Manager Edition has enabled me to experience the benefits of cloud computing first hand,” said Adam Rugel, CEO and founder of Trazzler.

Pricing and Availability

• Salesforce Contact Manager Edition is available today in a 1 to 2 user edition for $9, per user per month.

About salesforce.com

Salesforce.com is the enterprise cloud computing company. The company’s portfolio of Salesforce CRM applications, available athttp://www.salesforce.com/crm/, has revolutionized the ways that companies collaborate and communicate with their customers across sales, marketing and service. The company’s Force.com Platform (http://www.salesforce.com/platform/) enables customers, partners and developers to quickly build powerful business applications to run every part of the enterprise in the cloud.  Based on salesforce.com (http://salesforce.com)’s real-time, multi-tenant architecture, Salesforce CRM and Force.com offer the fastest path to customer success with cloud computing.

As of July 31, 2009, salesforce.com manages customer information for approximately 63,200 customers including Allianz Commercial, Dell, Dow Jones Newswires, Japan Post, Kaiser Permanente, KONE, and SunTrust Banks.

Any unreleased services or features referenced in this or other press releases or public statements are not currently available and may not be delivered on time or at all.  Customers who purchase salesforce.com applications should make their purchase decisions based upon features that are currently available.  Salesforce.com has headquarters in San Francisco, with offices in Europe and Asia, and trades on the New York Stock Exchange under the ticker symbol “CRM”. For more information please visit http://www.salesforce.com, or call 1-800-NO-SOFTWARE.

Copyright (c) 2009 salesforce.com, inc. All rights reserved. Salesforce and the “no software” logo are registered trademarks of salesforce.com, inc., and salesforce.com owns other registered and unregistered trademarks. Other names used herein may be trademarks of their respective owners.

Stay tuned, tomorrow morning I will tell all.

SALES IS FROM VENUS, MARKETING IS FROM MARS

By finding common ground, sales and marketing can join forces to drive growth to new levels.

Like it or not, marketing and sales departments are stuck with each other. Relationships are not just for customers. Knowing how to build and maintain successful interdepartmental relationships, such as between sales and marketing, is critical to overall corporate success.

Successful companies have clearly defined their target markets and aligned their sales and marketing efforts to fulfill the needs of those markets. When done well, sales discovers they have a compelling value proposition, a competitively advantaged offering, and the marketing support to make deals close faster. When done poorly, sales learns quickly that closing business is a much harder task.

TWO DIFFERENT VIEWS
Unfortunately, aligning sales and marketing around the same target is not an easy task. The irreconcilable fact is that sales and marketing are different. At its core, sales thinks of customers as individuals. They win accounts one at a time, by serving each of their customer’s unique needs. The sales department’s concerns are centered on how it can close more business within the limits of its territory.

Marketing, on the other hand, thinks about customer segments and the best way to capture that segment. When the priorities of an individual deal clash with the priorities of the segment (which they often do), watch out, because sparks will fly. If sales and marketing have a strong relationship, they can resolve these differences. If they don’t, these differences will send sales and marketing in separate directions, hurting the company’s performance.

How do two different entities of the corporate world make their relationship work? Here are some of the secrets:

1. WALK IN THE OTHER PERSON’S SHOES
2. AGREE ON A COMMON PLAN
3. MAKE FACT-BASED DECISIONS
4. BUILD A CHANGE MANAGEMENT PROCESS

1. Walk in the Other Person’s Shoes

It’s not surprising that some of the best marketing people have spent time in sales and vice versa. Listen up marketing, it’s hard to understand the pressure sales is under unless you’ve sat in the lobby of a key prospect on the last day of the quarter waiting for the purchase order to make your quota. And sales, if you’ve ever tried to put together an ad campaign that conveys your message, captivates customers, and gets praise from your company’s employees, you know that it is no walk in the park.

If you reside in marketing’s corner, discover life on the other side. Short of taking a sales rotation, spend time with the telesales group for a day and make a few cold calls to see what works and what doesn’t. Or shadow a sales rep through an entire sales cycle, from the first call to signing the papers. You’ll learn firsthand what it really takes to get a deal done. For those of you pounding the street, next time you think you are missing a vital piece of collateral to support your deal, try working directly with marketing to create it. Or, take an existing ad or direct mail piece and sit down with the marketing folks who created it and discuss together what works and what doesn’t.

Really understanding what drives the other makes it easier to make the compromises required to build a successful relationship.

2. Agree on a Common Plan

Successful companies start by first clearly defining their target customer and then developing an integrated sales, product, and communications plan to attack and win those customers. If sales and marketing are not focused on the same target, or if they have different views of what is required to win deals, there will inevitably be friction. Typically, this manifests itself in commonly voiced criticisms: “marketing isn’t giving us what we need,” or, “sales is going after the wrong customers.”

Getting real buy-in from both sales and marketing up front is vital to the plan’s ultimate success. This contributes to a culture of cooperation instead of finger pointing when things go off track. To maximize your chances of building mutual buy in, have sales and marketing work together on developing the plan at all levels of the organization. This process will demands compromise and cooperation. Coming from different vantage points and often having different measures for personal success, sales and marketing will not always agree on who the target is and what steps are required to win those customers. And it is here, having walking in each other’s shoes (if only briefly), that a winning scenario for everyone is built.

3) Make Fact-Based Decisions

While building a common plan is a great objective, it must also be the “the right plan.” Its development is determined through quantifiable data about customer needs, customer behavior, and competitive capabilities. If you have one sales person and one marketing person in the room, you’ll probably have three opinions about what the company should do to close more business. It is necessary to get beyond opinions and get down to facts so you address issues in a way that will deliver results.

4) Build a Change Management Process

Sales and marketing plans are often obsolete as soon as the ink dries. Customers’ needs and market conditions change and competitors move in unexpected directions. Having sales and marketing develop integrated plans based on facts is not enough; it is also necessary to build an effective change management process.

One method borrowed from the operations department that works well is to establish a Change Control Board. In operations, a Change Control Board typically meets weekly to review the current state of affairs and make adjustments to its plans as necessary.

One way to apply this to sales and marketing is to add a marketing review to the sales pipeline meeting once every other week or once a month. At the meeting, the teams can give updates on progress, share experience from the field, and resolve issues. Just as facts are important in setting the plan, they are also critical to making adjustments. In operations, members of the Change Control Board are charged with assignments to bring data to the table to support decision-making. The same standard should be true for sales and marketing.

In the end, while sales is from Venus and marketing from Mars, it is possible to make this relationship work. It is not easy, but the benefits are something that both sides can readily agree on, faster growth and higher profits.

Jonathan Klein is Founder & General Partner of The Topline Strategy Group. The Topline Strategy Group is a strategy consulting firm specializing in high tech products and services. Their engagements provide clients with deep insights into their markets and customers and deliver practical recommendations for turning those insights into new sales. As a result of our work, our clients have captured tens of millions of dollars in additional revenue.

I’ve decided the only way for me to keep it going is to get some help! Interestingly enough, I also need to find help with Adam Killam Internet Marketing, and am hoping to find an assistant who could work on both businesses. 

Recently I asked if anyone would be interested in writing content for the site and had soo many responses that I can’t find the time to set everyone up with an account! (I guess that’s a hint to hire an assistant right?)

If you know anyone who is looking for part time work and is familiar with WordPress and blogging that would be a great start. Basic SEO experience would be a bonus.

Please have them contact me.

In his groundbreaking book “The Goal”, Dr. Eliyahu M. Goldratt tells the fictional story of Alex Roga who manages a metalworking plant that is at risk of being shut down because of its inability to efficiently drive products through the manufacturing process. Goldratt uses this story line to explain his Theory of Constraints (TOC) thinking process and how Alex could use it to dramatically improve the efficient flow of products.

For those who have not yet been exposed to Dr. Goldratt, he is a highly intelligent individual, with a heavy Russian accent and a direct communication style. He seems to bristle when asked how competing systems management theory – Total Quality Management (TQM) compares to TOC; “it’s a nice theory but unfortunately it does not work”.

 TOC postulates that ‘every organization has at least one binding constraint which limits the organization’s performance relative to its goal’. TQM’s major am is to reduce variation from every process so that greater consistency of effort is obtained. So we have one doctrine that basically says ‘realize optimal efficiency by relieving the single major constraint in the system’ the other doctrine says ‘maximize each component of the system for maximum efficiency’. Which makes more sense? In The Goal, Goldratt Advises Alex that any resources leveraged against a non constraint will be wasted since the system will just bottleneck once the product gets to machine that is the primary bottleneck.

B2B sales is very much like a plant that ‘manufactures’ closed revenue opportunities. Leads and new opportunities flow into the sales ‘system’, they hit different sales stages and produce a certain amount of closed deals. Each sales stage in the system can be analyzed for velocity, volume and conversion. And a primary constraint can be determined. Of course getting that information in an efficient manner can be painful, but that is a topic for another article.

Have you analyzed where your sales funnel constraint is? There are many companies whose sales strategy is to hire the best sales reps they can afford. Great field reps tend to shine at the bottom end of the funnel, but are not s great at prospecting. If the constraint is at top of the sales funnel then the company may be allocating resources inefficiently; it may be better to invest in the prospecting or marketing team until there are enough leads to make that expensive hire.

Randall Isaac is the CEO of Bluetide Management. Bluetide builds software products that support B2B sales people in their efforts to achieve quota. Sales Clarity is an AppExchange certified Sales Forecasting Software that helps B2B sales managers track, inspect and guide sales activity in real time. More information at www.bluetidemanagement.com