Evaluating a Sales BPO Strategy: The CFO’s View
The CFO’s View of Resource Expenses
In many companies, senior leaders of operating departments, including sales leaders, don’t always have the full view of resource expenses in their P&Ls. The CFO, however, has a comprehensive viewpoint and appreciation of the company’s financials that they can contribute to fiscal planning. They have a clear view of the fully burdened cost of resources—including sellers and the return they provide—when analyzing sales expenses and those returns. They see expenses as investments the company is making, with an expectation of the ROI. These fully burdened resource expenses are in a CFO’s full view when expense or investment decisions are made.
When assessing the ROI on an expense, many sales leaders think exclusively about revenue returns. The CFO, on the other hand, will think in terms of increased revenue, decreased expense, and/or expense avoidance.
Evaluating a Sales BPO Strategy from the CFO’s Point of View
Organizations can develop a strategy to optimize their sales expense and maximize their returns using several different approaches. Sales outsourcing is one such strategy, using high-value business process outsourcing (BPO), rather than offshoring. It often takes a CFO’s vision to combine all the pieces and create a full picture of the value a sales BPO strategy can provide.
Sales BPO Value Equation
There are two sides to this equation: the true expense side and the full return side. When analyzing the true expense, the CFO will include the applicable carrying expenses of an employee. These expenses will include both direct and indirect expenses, such as allocations of corporate overhead. MarketSource has found this cost to be as much as three to five times the total compensation.
This is important when comparing internal expense to the resource expense in a sales BPO model. On the return side, the CFO will look at committed revenue attainment as well as expense savings or expense avoidance opportunities to calculate the full return.
These expense considerations include:
Risk and liability expense avoidance
Technology and other sales enablement expense avoidance such as CRM, LMS, and other sales productivity technologies and their administration
Reduced opportunity loss by increased speed to productivity and deployment flexibility
Expense avoidance of new sales performance capabilities, including advanced coverage modeling and targeting, rich sales analytics, and formal continuous sales improvement
The CFO will assess these key areas and many more.
If you are the senior financial executive in your company, consider the powerful financial performance opportunity that sales BPO offers. MarketSource can help you maximize the advantages of this opportunity.