The Alexander Group’s Post

Transcript

There is a Rev OPS revolution going on right now. The percentage of companies increasing headcount in revenue operations has more than doubled to 66% in 2024. Why are companies so focused on this function and what are they doing with Rev OPS today to better their commercial organizations? I'm Arshad Karim with the Alexander Group. We're revenue growth management consulting firm with our finger on the pulse of Rev OPS evolution and revolution. And I'm joined here today by my colleague Sean Back. Sean and I are going to spend the next few minutes. Sharing some of the results from our hot off the press revenue operations research and what it means for you. To get us started, Sean, there's a major shift going on in the scope and the focus of Revo's teams that we're seeing. What would you say are companies are doing and how is the role of Rev OPS expanding and being defined in the market today versus in the past and what we've seen before? Thanks, Arshad. It is exciting because I would say the primary driver that we're seeing is actually a ship to become more customer oriented. So companies have got the memo. Customers are having a single conversation with our brand. And they're expecting that conversation to say it have the same tone, same message, the same content, whether they're dealing with sales or marketing or customer success. In the past that has not been the case and So what we've seen here is a much heavier push to having cross functional talent. Interrelated data Systems and IT just tighter go to market across these three functions. The percentage of Revo's teams that are cross functionally oriented has actually risen to 47%, which is a sea change increase from what we've seen in the past. Yeah. So it's all coming together with Revos, it sounds like when sales, marketing, service, all these different functions. But Sean, what's what's the right answer is, is a fully centralized Revos organizational model the right one or is it, is it decentralized one? It, it kind of has to be one of the other, right? I'm going to be a consultant here for you. Akshai say it depends. Um, we've seen, we've seen both models work and be highly. Decentralized models can be embedded with teams, it can be hyper local. They can understand the local context and dynamics of the market. I will say, however, overall there is a trend towards centralization and it's really being driven by data and analytics and the fact that we can create some centers of excellence that then create reach and scale across the business. So while any approach can work, I think what we'll see is a trend in the next one to five years is that continued move. Centralization as we get more and more scale out of our technology platforms. OK. And you know I get a lot of questions from commercial leaders and in our consulting work about what the definition is of revenue operations. And the answer of course, Sean to your point is it depends. But we do know that there is a universe of functions that we could see under the Rev OPS umbrella and that includes a host of horizontal functions like analytics, like commercial strategy and planning, like commercial technologies and others, but also functions that are more specific to the marketing, sales or service. Weakness, right. There's sort of more specific and more aligned to those. So Sean, tell, tell me what we're seeing in the research about the most commonly owned functions by revenue operations and why are these at the top of the list for full ownership by the Rev OPS team? It's great question and what we're going to see is there's four that have really popped in our study and it's going to be a continuation of that same thing we've been talking about this entire conversation of looking at a more cross functional approach to Rev OPS and so the top. Common functions that were owned by the Rev OPS study participants were strategy and planning at 70%. Comp management at just shy of 60%. Analytics and reporting at 55 and training enablement at 52%. Now what's really interesting to me about those four in particular is they're all scaled functions. I want to have one company strategy. I want to have one planning process. Comp plan should create incentives that align to that strategy for all sellers. I don't want 10 different versions of the truth when it comes to analytics and reporting and what 1 dashboard. I want my training to scale across the entire sales order. So that's these are some of the underlying. Drivers that we've are seeing that's pushing that overall trend towards centralization. Got it. And then is that having an impact on on the talent and the types of? You know, competencies we're seeing come into the Rev OPS function. I'm sure we've got some some new types of roles and capabilities that we're adding in here as we're investing. 100% So I think if we'd gone five years in the past, you would have seen much more operational and quite frankly some more administrative work. You know what we're seeing is that the investment hires 91% strategy program managers, 81% data scientists, 81% digital marketing, marketing and social media analysts. So we're getting a big up level in terms of the type of work and then the type of talent that's being. Recruited into the web space. Right. Yeah, I guess to to invest in some of these new areas, right, We've got to automate and systematize some of the things maybe that we were doing before with more humans and get that efficiency so we can invest in these these areas. So makes sense without DevOps. So let's talk quick about investment then in Reva OPS. What is going on there trend wise with the investment in Rev OPS talent? It seems like there still is a lot of money getting poured into this function from our research. I think we're just getting started our shot. So in 2023, Forbes published an article that said Revos is the fastest growing job in America. In our 2024 study, we found that Revokes investment was up two point 3X from the 2023 levels. And so you're seeing this multiplicative effect right now, just people doubling down because they can see the kind of efficiency gains and productivity gains and quite frankly revenue growth gains that come from having an efficient Rev OPS organization. Yeah, that is a really big increase year over year, you know, from just 2023 to 2024. So clearly things are evolving fast when the Rev OPS front as it relates to investment and capability. All right, finally, Sean, you know, before we wrap up, we'd obviously be remiss if we didn't hit on what's on the tip of everyone's tongues these days, AI, artificial intelligence. How are we seeing AI impacting Rev OPS and what would you say are some of the most potent use cases, you know, that we can share with the audience here that they're employing with AI to just improve overall commercial execution? So this is an area where I would say the starting pistol has gone off and everyone is sprinting off the blocks. 56% of the companies in the survey said they're implementing AI this year, and almost all the companies in the survey said they would be doing it by next year. I think one of the things we're going to find though, as we go in a little bit deeper under the covers there is that's actually going to mean a wide range of things. So for many of these firms, they're implementing AI and machine learning models. Sometimes they've been around 20-30 years. They're using clustering to do customer segmentation. They're using logistic regression to predict customer churn. And so tried and true use cases, they're they add immediate value into the business and it's great that we're catching up. The modernity on those fronts. The industry leaders, they're pushing on generative AI and so this is a little bit the Wild West. You know, the stories are coming in, they're fascinating. It is like sometimes even the legality is is a question. So we heard a story recently about a company that had gone ahead web, scraped a competitors website, use generative AI to create thousands of blog articles overnight and then took 3.6 million page views from that competitor. Lots of questions around that, including ethical questions, including legal questions, including strategic questions. But it's in this space that we're now encountering those questions because people are making real use of the technology to drive their strategy, their tactics, their operations. Got it. Well, surely a lot more to come on the AI front and stay tuned here at the Alexander Group as we continue to do our research there. But I'll, I'll close this out here, Sean and say thanks for joining me. We've got a lot more in this revenue operations research. If you're interested in learning more, please visit ourwebsite@alexandergroup.com. Request a briefing with with Sean, myself and one of our practice leaders would be happy to chat with you further further and look at look for our events. And other community building activities on our website as well. Thanks for joining.