4 lessons how to make your sales manager love budgeting and planning

Sales professionals are probably one of the most difficult audiences to incorporate in a planning and budgeting cycle. In one of my first projects I found myself confronted with a seasoned sales manager. After trying to contact him by mail, leaving numerous voicemails and a few meeting requests I finally just stepped into his office one day. Surprised by my persistence he proudly showed me his desktop computer. The machine was on his desk, unplugged, all cables wrapped around it. "This is what we do with these teller machines, we leave this number crunching to the accountants" he laughed. I left his office fully determined to even get this 'hard target' to use our new planning model.

Bringing sales into your planning cycle brings a unique perspectives and makes your plans better connected to the world outside your organization. This connection makes your plan more responsive and a more valuable basis for other functions to build their plans. The last couple of years we have been working with sales professionals in numerous projects. Although they are almost always among the most reluctant to use our new planning models, we learned our lessons and managed to get them involved.

Use available information as a planning basis

The first lessons we learned was to make use of all data that is already available in your sales organization. We typically find a lot of valuable data in customer relationship management (CRM) systems or other salessystems. In the most successful cases we were able to take the expected revenue from the pipeline in the CRM-system and use them as a solid starting point for the revenue planning. The time span of this basis depends heavily on the industry you are in. Planners from the sales department are always pleasantly surprised if they can start planning from a basis that is already familiar to them. More than once we have found this approach also a good impulse for improving the quality of the data in the source system that we use.

Use 'seelzy' terminology for your planning model

A second, and very important lesson, was to make use of a really sales based dimensional model for this type of planning. A dimension model is the data skeleton of your planning model. Typical dimensions in sales planning model are customer(group), product(group), channels and revenue type. By using this kind of dimensions the sales planner can really plan revenues in familiar terminology which brings the planning model closer to the real business activity and easier to align with processes like account planning etc. We have seen sales planners that were given only P&L line items to build their plans. In the majority of these cases the sales plan was nothing more than an administrative task to keep the accountants happy and was seldom used to really manage the sales function.

Bring marketing in the planning cycle

Alignment with the marketing calendar is the third lesson we learned. At a telecom provider the sales manager introduced us to the marketing department, after a short interview we decided to try to integrate their marketing calendar into the planning cycle. By doing this we greatly enhanced the accuracy of the spread of revenues over the months. This step also initiated some good discussions about the effectiveness of planned marketing efforts already during the planning cycle. The fact that these kind of discussions were initiated this timely was seen as a great additional value of the improved planning cycle.

Make it personal

Probably the most important lesson has nothing to do with the planning model itself, it's the human factor. Sales professionals are in general 'people-people'. Sending e-mails, writing manuals is not very effective way to communicate with them. If you bring your ideas to their desk en sit down with them for a short while you can make big steps forward. If you can make their life a lot easier by making some minor adjustments to your planning process or model, do it. It will make their work more efficient and they can spend more time on what they should be doing, paying attention to customers and potential customers.

A big step towards value adding planning

Getting sales actively involved is a big step towards are value adding planning cycle. It might seem like near impossible goal at first sight, but take a closer look. We have learned our lessons and have seen that it's not only possible but also very rewarding. Please share your experiences in this field with us, so that we can also learn your lessons.

Bridging the planning silos

What are "planning silos"?

If you work in a large organization you are probably familiar with the phenomena we call "planning silos". "Planning silos" occur when different staff functions in an organization all drive their own planning cycles. In typical cases we find Finance running a financial planning cycle, HR running a personnel planning cycle and Sales running an account planning cycle. All these cycles are in the real world closely interconnected but in the planning world they run in the best case loosely coupled.

So what's so bad about these silos?

Well first of all they require a lot of management attention. The average line manager is confronted with three or four planning processes in which he has to participate and has to submit information. In some organizations we find mangers submitting data for headcounts in four different planning processes. Each plan cycle uses its own definitions and terminology so it is not a straight forward copy-and-paste-action for these managers. Time spend in uncoordinated planning silos is a waste of time. Time that could be spend on serving customers or paying attention to employees.

Second, the multiple parallel planning processes create multiple versions of the planning truth. FTE's in the HR plan don't match up to the FTE's submitted three weeks earlier in the financial budget. It is not uncommon that a lot of time is spend on discussions explaining the differences between different plan versions. These discussions hinder a lot of organizations to pay attention to the big picture and the real signals that can be read from the planning data.

Third the uncoordinated planning processes take away organizations a rare chance to see the bridges between the different functional area's in an organization. Being able to see the impact of increasing sales volumes of beer throughout the brewery's value chain is a key value of the planning process for such a brewery. The same goes for new headcounts that enter an operations function as a result of a planned recruiting effort. The earlier those interdependencies are visible the better they can be managed to deliver the value of planned actions to the organization.

What to do about the planning silos?

Bridging the planning silos is not so much something that is done in one big project. Bringing all the functions to one table, the different interests and definitions, corporate politics, they all complicate the building of the necessary bridges.

We have had the best results to integrate one planning process after another. The financial planning & control cycle can be a fine starting point for the integration process. From this starting point different functional area's can be linked into an integrated planning model. Realizing an integrated planning model as a bridge between the planning silo's requires careful considerations of timelines of the different planning processes, definitions to be used and a clear organization of the integrated planning process. Typically such an integrated planning model requires a specialized software platform to handle of the interdependencies. We find that a lot of large organizations have these platforms in one of their function area's but the usage is often limited to that specific function area.

Is it worth the effort?

Yes it is! The benefits of bridging the planning silos are numerous. Integrating the planning processes often delivers new valuable insight and makes planning processes more efficient. Imagine line-managers that submitted their HR-plan that now will find their financial budget already be populated with headcounts or even salary expenses coming from their own HR-plan. Sales-managers find their revenue line items being fed from the volumes and price plans from their account plans. For all of them more consistency, more insight with less effort.