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Sales Operations versus Revenue or Commercial Operations

By Dave Egloff | August 06, 2020 | 0 Comments

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As William Shakespeare has written, “what’s in a name?”. His point is that names or labels are somewhat arbitrary and do not define us. Our worth and value come from far more. While I agree with this sentiment, I often find myself in a conversation discussing how many sales operations functions are being rebranded.

As you pay attention to the great conversations over LinkedIn or observe the positions from a variety of consultancies and thought leaders, you may notice the rise of alternative sales operations names including:

  • Revenue Operations
  • Commercial Operations
  • Growth Operations

How did we get here?

While there may be a more elaborate or complex answer, I believe the shift is partially a result of the expanding outreach of sales operations across the enterprise.  Years ago, sales analytics, systems, and operations were for the sole benefit of sales.  Now, more than half of sales operations teams provide dedicated support to Marketing.  More than a third of sales operations teams support Product, Finance, and Service functions (source: 2019 Gartner State of Sales Operations Survey, n=296).  Clearly, sales operations have become a critical and interconnected function across the enterprise.

In addition to cross-functional partnerships and collaboration, the alternative naming conventions for sales operations may be a symptom of an executive shift.   As you scan through LinkedIn, you will see that the senior-most sales leader goes by many names – Chief Sales Officer, Chief Revenue Officer, Chief Commercial Officer, etc.  The debate about the sales operations branding might simply be lagging the executive titling.  So, while we may debate the cache of revenue ops versus commercial ops, it’s unlikely that a Chief Revenue Officer will have a Head of Commercial Operations – these things go in pairs.

There may be another dynamic at play.  There are industry biases.  For some industries, revenue operations may align closer to a Finance function rather than one supporting the sales force.  In my observations – with the good fortune to work with many clients – I believe technology and subscription-based pricing have caused some of this disruption … in a good way.  The revenue cycle in a subscription-based model is quite different from the legacy, perpetual ownership model.  Functions like customer success have become quite popular and are a key part of the revenue engine.  So, as sales operations extend their support to customer success teams, it’s easy to see how sales operations can morph into revenue operations.

Regardless of naming conventions, there is a convergence

Undoubtedly, there are some overlapping responsibilities across sales, marketing, service, and customer success operations.  If you adhere to the notion that the operational priority is to support revenue generation, Revenue Operations may sound fitting.  Then again, if your goal as an operations leader is to drive commercial success, perhaps Commercial Ops is more your thing.

Ultimately, we must not lose sight of the great opportunity ahead of us as leaders of sales, revenue, commercial or growth operations.  You can support and improve selling execution by reducing administrative burdens and process friction.  You can provide analytics and insights to improve decision making.  Plus, regardless of the function’s name, you must lead a team to support a more complicated business model with more stakeholders requiring more digital dexterity and collaboration.

Does the name matter?

No, and maybe a little.  Going back to Shakespeare, we are not defined by our name.  However, job titles impact your ability to attract talent.  As you consider your scope and industry, rebranding your sales operations might be a good idea.

I’m confident that this debate is not ready to end.  Leading companies are challenging the old definitions and boundaries of what sales operations can do.  Plus, with COVID-19 disrupting many organizations and causing most to revisit budgets and headcount, the operational overlaps across sales, marketing, service, and customer success will likely trigger some discussion on how to reduce operational costs.  In other words, there is likely more convergence ahead.  Let the debate continue.

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