RevOps: Is there a new generation of tools to come?
In the old days of software development, version control was centralised, pipelines were siloed and merging was a dark art. Then DevOps came along. It ushered in agile methodologies to streamline planning and development, and aligned those who wrote the code with those who deployed and supported it. It handed devs and IT the keys to the scale and speed that defines engineering today. A new wave of tools strongly supported the practice by equipping engineers with collaboration and productivity tools.
What DevOps has done for software production, and SalesOps did for sales department efficiency, RevOps promises to do for revenue and growth.
RevOps has become a function, a way of operating, that aligns the sales, marketing and customer success teams. It provides a line of sight across the entire customer journey, so businesses can track performance and unify metrics across revenue functions, creating a more efficient revenue-generating engine.
As a concept, it’s not new, but there’s still a lot of road to run in the market. We’re interested in the tools that enable it and where they are headed next.
The rise of RevOps
In some capacity, there’s always been someone scrambling to keep sales, marketing and finance teams aligned. But this process was mostly manual and with little accountability across the organisation. If they wanted to know exactly how many sales qualified leads were generated last week, how the marketing channel spend was adjusted, and how that impacts budget, they’d be staring at hours and hours of manual work, chasing data from different teams.
Why? Because — planning, process and execution — evolved separately at different stages of the business, each with their own teams, tools and siloed data. Planning is done by the finance function mostly starting out with Excel, and later integrating with more advanced FP&A tools. Separately, SalesOps focuses on the efficiency of the sales team, MarketingOps on the marketing funnel, and CS / CX on churn and upsell by creating a 360 degree view of the customer. All these functions are on the hunt for tools to help with execution, but execution tools are typically neither connected with each other nor with finance tools. The result of multiple tools across functions makes it extremely difficult for both finance and revenue generating departments to collaborate on generating predictable and actionable data. That’s when we see RevOps come in, when a company scales and manual aggregation doesn’t work anymore.
But they only recently got a title. The first Chief Revenue Officers (CROs) appeared about a decade ago, and they had a job on their hands. They were tasked with setting-up a function and processes aiming for alignment between marketing, sales, CX and finance to create a predictable GTM motion. RevOps works with the Ops teams, creating accountability as well as delivering insights on a strategic level to the C-level suite and finance function.
There are incumbent RevOps tools in the space, like Clari, InsightSquared and Aviso that appeared around the same time as the first CROs. They give businesses the ability to unify some level of fragmented revenue data to generate more accurate sales forecasts. But RevOps and the tools that underpin it haven’t yet fully penetrated the market and face continued challenges of siloed teams, fragmented data and are not able to sync the multiple co-existing solutions. Ultimately, there is still a clear lack of insights into RevOps data which is a major barrier to revenue growth. Particularly now in a tough economic climate, businesses are keen to explore the full power of RevOps.
The opportunity — and appetite — here is huge. CROs have a separate budget from the CFO, and have ring-fenced spend for RevOps tools that’s about two to three times larger than that for pure play FP&A tools. Moreover, CROs know that there’s a proven strong ROI, with increased predictability and efficiency across all revenue-generating teams.
For example, a mid-sized B2B enterprise with around 100 full-time employees and 10 account executives with the right RevOps tools and strategy stands to save 800 hours over a year by increasing reporting efficiency, which can translate into annual savings of roughly $80,000 — and that’s not including the immediate benefits on revenue generation.
Little wonder that three quarters of the highest growth companies in the world will deploy a RevOps model by 2025, according to Gartner. So what do the next generation of RevOps tools look like?
We recently wrote about the new breed of FP&A tools that promise to give a single, simple control panel for the finance team and the CFO. Now the CRO is looking for a similar thing.
Pure FP&A tools are designed specifically for the finance team and focus on point-in-time planning. However, a good RevOps tool needs to be cross-functional and is integrated into the day-to-day operations to allow performance tracking, accurate forecasting, capacity management and effective execution. Today, existing RevOps tools aren’t as easy to use and lack the necessary connectivity with marketing and sales tools. Additionally, businesses cite missing insights and actionability, and see revenue slipping through the cracks.
Maturing, cross-functional teams with ambitious growth targets — those with more than 10 account executives and business development reps, with a CRM and good data logic already in place — are currently looking for alternatives.
That’s why we believe in a next generation of RevOps tools that will likely take two different approaches. Some will build all-in-one solutions from scratch, aiming at each stage of the revenue funnel — from revenue planning to process to execution. Others will go for a layer on top, connecting best-of-breed solutions. They will stitch together the different parts across revenue-generation and its tools, creating an interoperable abstraction layer with a strong focus on usability and insight. In either case, it requires a solution that breaks down silos and helps teams collaborate, giving the business a single source of truth across the entire revenue-generating process.
There are already some promising players out there. FP&A incumbents like Abacum and Pigment are starting to develop their own RevOps modules, and disruptors like Growblocks, Kluster or Firmnav are building bespoke solutions, aiming for a more data-powered, easy-to-use approach.
But it’s still early, and there’s plenty of scope for more innovation in a space that’s hungry for a new breed of solutions. And all the more so now in this current climate, there’s no room for error when it comes to revenue. Next-gen RevOps tools will need to focus on increasing efficiency in the revenue funnel, rather than just growth at all costs.
We believe these category definers are being built now, those that will help scale up the RevOps function and fully realise its potential — and we’re eager to meet them. If you’re building in this space, we’d love to hear from you!