Darryl Heffernan is a sales operations stalwart. Having been in sales ops for 16 years, he’s seen the role’s ascent from managing spreadsheets to becoming an integral part of the sales team. I chatted with Darryl, VP Global Sales Operations at Kofax to learn more about his framework for good process adoption, Kofax’s CPQ project, how to motivate a sales ops team and the fundamental changes he’s seen in sales ops over the years. After reminiscing about our first CRMs, the interview began…
Rory Brown (RB): Can you tell us more about Darryl Heffernan and your path into sales operations?
Darryl Heffernan (DH): I’ve always done sales ops in some form, even if it wasn’t always classified as that. I started in reporting as a Commissions Analyst back in the day when it was all Excel driven. Then I moved the system from Excel into Access database and VB programming, so it was all very hands-on and ‘build your own system’ originally.
From there I moved to a company that was in Chapter 11 Bankruptcy Protection. It had had all manner of bad processes and lack of controls that almost resulted in the company going down. So I actually joined that company almost for the challenge of it. We managed to get the company to come out of the Chapter 11 and we sold it off to Hewlett Packard after three years that felt like 10 years!
That was a real eye-opener in terms of building the whole quote to cash process, working with external SOX consultants and building out an end to end process, albeit in a mixture of Excel and Access.
RB: Access was my first CRM. Well, not even a CRM but my first experience of the working world.
DH: It’s a great grounding in understanding databases but also in building processes. It was from there that I considered becoming a computer programmer but actually it was a business commercial operations manager at that company that persuaded me to take the commercial route. That was when I started getting into sales support, revenue recognition, how to structure a deal and maximize revenue. Then as I moved into the next couple of companies, my focus was on helping Salespeople in building million-dollar deals, negotiating terms and conditions.
That VB coding experience in defining a terms and understanding how different sections of code all linked up was similar to understanding the contract terms. I never had any training on it, but you just throw yourself into it and you can learn. It is only in actual customer deal negotiation you are ever going to learn the basics but you always learn something new in each new deal.
RB: You have been in sales ops for 16 years. What are the fundamental changes or shifts that you’ve seen in the role over that time?
DH: I think one of the very obvious ones is who sales ops reports into. When I started in sales ops there was a debate around this. We reported into finance for a while, but I think it has very clearly shifted much more under Sales now in terms of reporting line.
However it has still got that legacy of needing to also act to represent and be trusted by finance and legal. It really is a case of ensuring integrity, but at the same time guiding salespeople so they trust you and open up in order to understand as to how best to structure deals.
RB: I noticed in your bio you described one of your roles as being a strategic advisor to the Worldwide EVP of Sales. What have you seen in terms of changes there as well?
DH: I think certainly when I started off around commissions and reporting, it was very much that. Sales operations was all about spreadsheets and putting targets together. And as I moved through my career into much more commercial areas and deal structuring, my relationship with the regional Head of Sales, EVP of Sales, or CRO became critical. Having the relationship where you can bounce ideas off each other and challenge the sales lead, poke holes in the strategy that you and they are coming up with and see almost the worst-case scenarios, as well as other areas to look at.
RB: The process rollout is a big topic for a lot of people I have spoken to. What is your go to method or framework for making sure your process is successfully implemented with good adoption.
DH: We are knee-deep in a CPQ, a rollout and implementation at the moment. What has become critical as you go through that is to include all the right stakeholders in it. You have to make sure that you pull all the eligible areas of the business into it, which is extremely expensive time-wise, and you have got to really be clear about what each topic is about to make sure you are not wasting people’s time. I think certainly details and workflow diagrams are obviously critical, but it is the conversation around it and having a culture where people can feel able to ask the ‘stupid question’ which can sometimes uncover something that is going to rip the whole process down. You need to be able to have that very open culture where anyone can speak up and test the process as you go through it.
Also, there have got to be continuous process improvements and you’ve got to be open to feedback. And occasionally, you need to stand right back, look at the whole process and instead of tweaking it, figure out: Do you need that whole piece at all? Is there new technology that is going to change it entirely?
RB: And you are right in the middle of CPQ. Where did that project come from? How did you decide to prioritise that?
DH: When I joined Kofax back in 2009, I introduced some various different forms and processes back then and they were still going up until quite recently. But they really were a make-shift setup and what has happened over time is where we have had the integrations and where we got purchased by Lexmark, everything went on hold. So, we probably lost a couple of years in terms of moving forwards with it. But I think we have also come to a point now in terms of scalability, efficiency and the sheer number of transactions we have got to deal with where we just can’t do that in the way that we have done it before. We have acquired many companies over the years, so we have got very complex licensing rules, very specific rules per product set and very reliant on knowledge of sales support people that have been there for many years to get a config correct. To go through and write every exception down becomes quite painful when you are putting a config together and there comes a point where you have got to use technology.
RB: Could you give us a quick introduction to CPQ and what business problem it solves?
DH: We love a three-letter acronym in tech and CPQ means Configure, Price and Quote. It really is putting together those different elements. Here’s how we’ve used it to date. We track our opportunities in a CRM system, as most companies do. Then once it gets through the sales cycle, quote creation happens and this is where the limits of time and creativity can be stretched. It’s where it can often all go wrong, but you spend so much time trying to correct it.
What is important in our company specifically is to know what the customer has already got. With complex licensing rules, if customers want more of one product, you need to know what they have already got before you can sell them more. And this is where especially it gets very complex and time consuming if you don’t have a process to do that. So your starting point is knowing your customer, finding out what they have got, then working out what you can add on and sell to them that is going to work technically as well as also allowing you cross-sell opportunities and up-sell opportunities as a salesperson.
RB: So I’m presuming there is a huge time-saver here and I’m presuming also a consistency with the way the quotes are going out to clients as well.
DH: There is, and even before getting to the quote there are so many different ways to price things. You have a myriad of different calculators and methods in place and it is driving that consistency and figuring out what are the breakpoints that make sense. If you get your list price and methodology wrong, it causes so much pain downstream in approval processes for discounts, inconsistency of price, discount approvals and negotiating time. Especially with software, the pricing methodology can vary quite considerably given the setup.
So that is again where CPQ is going to make a massive difference for us instead of using conversion calculations and things like that in non-automated methods. Instead of just automating the rules you currently have in place you need to use the project as a catalyst to challenge the rules to try and simplify with greater consistency wherever you can. This is the real challenge to get the most benefit out of the overall project.
RB: What is the main thing you are getting from a CPQ system in terms of quotes that you couldn’t get before?
DH: Having worked a lot in Europe, obviously languages is a big one. When you work for American headquartered companies, it is often understanding how to deal with that different currency, different language, different formats for local regulations or tax. With new revenue recognition rules, we can now sell multiple different license types on a quote. So not only do you have to deal with different languages, you have got different terms for Terms and Conditions for when you are selling SaaS or when you are selling Perpetual. Getting pricing in a way that is laid out in an understandable format with some flexibility is important.
And the other big one is allowing your partners access to actually create their own quotes, which is a massive time-saver once you get to that level. I am looking forward to getting to that point to help enable our partners to resell as efficiently as possible.
RB: How would you describe the sales ops/sales leader relationship?
DH: That is a good question. Trust is critical. The Head of Sales and sales ops obviously see a lot of confidential information. So that trust is key. But also in terms of being able to drive strategy and planning, having that challenger role is really important. Having that relationship to be able to challenge each others ideas, or bounce ideas off each other and not to take offence on it is key. And to be able to look at it and amend but also be able to delegate, to know and trust that someone is going to pick something up and run with it. You need to build a great relationship to be the most productive and successful and to enjoy what you do.
RB: One of the areas I think people can struggle with is challenging the sales leader. It could be that they’ve spotted something in the data, or they know that a certain process won’t work. What are your top tips for framing that conversation in a tactful way?
DH: That is a good one! Normally there are other advisors or senior leaders that the Heads of Sales will bounce their ideas off, so I think sanity checking with those other people is a good first step to try and get the full picture. Obviously, the real important one is data. It’s always good if you can show data that would help enlighten the situation and let them come to their own conclusions.
It’s also important to understand the implications. It is very hard to think through all the implications of a change and the domino effect that can have. So it’s a good idea to give a couple of options and recommendations and then make sure to track the effects so that you can make any other necessary changes when needed.
RB: How do you define and measure success in sales operations?
DH: Very good question. I think it is probably true in most companies that turnover of staff in sales is higher than in other departments in the company so with sales ops, if you can keep the knowledge and experience, they become the guide for salespeople on how to get deals done. So I think success criteria is certainly keeping attrition low in sales ops, keeping the experience and the knowledge in to help guide sales people and help ramp them.
To do that, you need a few key levers. Obviously appraisals, merit and rewards is one. But you can only use that to a certain degree without your Finance CFO chasing after you! So I think development is more important: giving people the ability to develop, to mentor and pull them into project ownership and accountability so that they can drive their own success milestones.
I think one of the key causes of stress for most people is things in their job that are outside of their control. So especially when you do things like a CPQ project, I’ve pulled in nigh-on my entire management team to all the different aspects and sub-projects. Because they are the ones that are going to have to live with the outcome afterwards in their own area. So many of these calls, especially for the folks based in Europe are late into their evening. But many of my team do join all these calls because they know they have got the ability to influence not just the company, but their job and their teams’ jobs. So I think it’s really important to get that collaboration in place so that they can make a difference and achieve their own goals. ,
RB: Brilliant. I think that is quite a nice way to finish.