Jive Software

A INDIVIDUAL REPORT ON GMSI 409 JIVE SOFTWARE

MODULE LEADER

SUBMITTED BY

VIPIN AGGARWAL

ANKIT CHUGH

Synopsis The case throws a light on the jive software organization. The case begins with Dave Hersh, CEO of Jive Software; assemble a meeting of all hands. After a year of record sales in 2007, Jive has increased its sales force too quickly and missed his level surface in the third quarter of 2008. The corporation is facing increased difficulty from competition and a difficult economic environment, as well as a partner of the company that develops upset. In 2008 the organization was struggling with their sales force so they hire Mr. John McCracken as the new VP of sales to look at the problems facing by the organization.

Brief Analysis

At some point in the years from 2001 to 2004 of steady development of Jive Systems, the company solidifies its status as the best ever growing SBS Company in the industry, doubling the size of its workforce since 2008 and increasing full year revenue of 85% from 2008 to 2009. Throughout this period of rapid growth and expansion, the organization relied on a variety of technologies to handle their sales forecasting process. Till they realized that their structure of business was changing almost daily, Jive’s unusual system struggle to keep up. The structure was done in a random manor. They were doing quota management in Excel, bookings and sales in Sales force and pipeline analysis in Cloud9 Analytics, which resulted in lack of all the information into one central system. Jive’s multi-tool approach was the basis of several serious issues: The managerial team had poor visibility into the sales chance pipeline; all data updates involved a dull and awkward transfer process from salesforce.com to Excel pivot tables; and, when changes of any kind needed to be made, instead of conducting study and having an all team/ department meeting for synchronization they just made silly plans and moved to creating new products. Formalization of Jive’s sales functions & core building blocks of the sales function

The core building blocks of the sales function that one needs to put in place are as follows - The ability to understand and analyze business issues and develop solutions around the core building blocks of sales process which are tools, skills, competencies and attitudes. Based on the company’s revenue hire sales reps that are capable of using the latest techniques to engage individuals in their development and understanding coaches and mentors (VP’s) who help individuals to become aware and responsible for their opportunities. With situation to sales learning value proposition can be the sales function as the strategy of the organization in initial years is selling high volume products at low price. Sales were made by credit cards through the organization website over the phone, this sales effort became effective to the company and the value becomes high with superior technology at low price. Another core building block of sales function is the focus on the target market. The target market of jive software company are the communities which the outside the firewall of the organization. They can be developer, support or product innovation communities. The focus on target market shift towards providing service components to its customers that integrated with the rest of the solution not the entire suite of components. The jive software organization team started listening to its biggest customers.

Another core building block of sales function is the marketing channel. Marketing channel can be direct or indirect. Initially the organization is marketing their product by referencing as it was theirs lead driver. The organization was marketing by incorporating “powered by Jive” link on public facing application. Now the team is facing challenge to push the product to its customers, to overcome the challenge the organization can hire a different team that could markets its software to its potential customers so that the sales rep can easily generate the leads for the organization. Last core building block of sales function is sales process.

Evaluation of the strategy of team vs. individual coverage / Quota models. What are the pros and cons of each approach? Suggest an alternative coverage / quota model. Sales Quota is the sales goal set for a product line, company division or sales representative. It helps the managers to define and stimulate sales effort. Sales quota is the minimum sales goal for a set time span. Generally sales quotas are set slightly higher than the estimated sales so as to stretch the sales force effort. Sales quotas are developed through the study of annual territory marketing plan. In this the plan for developing new accounts and expanding existing accounts is given by the representatives. There are 2 different types of quota models which are team quota and individual quota. The strategy behind the team quota is that the teams which consist of a pair shared a quota for their own territory. There were meeting which held once a week to discuss how to cover their territory. In the individual quota model there is no team, every individual has their own quota for their territory. The strategy also suggests that individual quota model didn’t work well with the team quota model. Every quota model has some advantages and disadvantages, in this case also has some pros and cons which are explained below: Advantages of team quota model are firstly there is coordination. Coordination is very important in a team, if there is no coordination in a team then it cannot achieve the sales figure in a given deadline. Second advantage is product knowledge: every member has the knowledge about the product which he/she is selling. Third advantage is division of work: division of work is one of the main advantages of team coverage/quota model as work is equally divided between the team members for instance one team member will follow lead and run demos to its clients and other member will be going on field to meet executives to generate the leads for their organization.

Disadvantages of team quota model are firstly there is lack of understanding: there can be a lack of understanding between the members of the team for who can work inside the organization and who can work in field. Second disadvantage is difference in ideas. Third disadvantage is ego clash: ego clashing is the major disadvantage for the team coverage/quota model as some people can’t work with some member who has ego problem and it would also affect their performance. Advantages of individual coverage/quota model are firstly is no team leader: individual has no team leader under him so it is a big advantage in individual coverage/quota model. Second advantage can be boss of own work: in individual coverage/quota model every individual can be own boss he/she has the advantage of not reporting to anybody except the sales manager. Disadvantage of individual coverage/quota model are firstly is burden of work: there can be burden of work if only person is working. In my opinion an alternate coverage/quota model can be using of both the quota model i.e. individual and team quota model. If there is small territory than individual quota model can be applied or in case of big territory team quota model can be applied. According to case facts quotas were announced after the quarter has started that should not be the strategy of any organization as it may result in less time to hit the no. of sales. Also in the case facts it is written that there was no system in place to share learning from the field with the engineers. An alternate coverage/quota model can also have the system in which a field rep can share the feelings of the field with engineer so that he/she can make a better product according to the features mentioned by the customers. Fixed territory with variable quota: Fixed territory with variable quota means that the sales territory is fixed and the quotas are variables that are based on pipeline and territory track record. Disadvantage of using this model is that in fixed territory there can be only 1-2 big customers to sell the product and we cannot allot big quotas in this. Another disadvantage is also that we cannot know that the fixed territory is small or big in size to sell the product. Fixed quotas with variable territories: Fixed quotas with variable territories means all quotas are the same for each territories and territories are aligned periodically to give everyone the exact same "potential" in each territory - equalize installed accounts, pipeline and the green field potential Quarterly versus annual quota system There are some of the points which are related to quarterly versus annual quota system are as follows: 1. Periodic revenue and measure of quota: In quarterly quota system periodic revenue is there and quota can also be measured in this period. So quarterly quota system is better in this case.

2. Allocation of cash budget for balanced period: In case of quarterly quota system allocation of cash budget can easily be made as period is small. In jive allocation of cash budget is done on quarterly basis not on annual basis. 3. Defining and reviewing pricing strategy: In quarterly quota system we can easily define and review the pricing strategy of the organization. 4. Pipeline management: It is the cross-project or evaluation of all activities associated with a particular set of objectives. It is a process where one evaluates active opportunities so as to balance quality and quantity. The benefit of using pipeline management in quarter quota system is that by using it we can stay top of mind with decision makers; we can also project the forecasted revenue and can monitor quotas. 5. Resource management: We can easily manage the resources by allocating time and money to it which can be helpful in quarterly quota system. The ideal length of quota period would be neither too long nor too short as it would affect the performance of reps. if the period is too short then would be increase of work pressure to achieve the sales target, if the period is too long then sales reps would be too lazy to talk to customers. Adverse affect 1. Announcement of quota when quarter period is under way 2. Reps were hesitant to enter the information into their site as it would increase their future quota. 3. There can be loss of quota as they can be easily abstracted from organization’s finances. Length of quota period for Jive would be no more than 15 days as mid- quarter period creates problem in the organization.

Steps should McCracken take to mitigate the problems in sales are as follows: 1. Motivate the sales team, which is to say that many sales managers rely too much on metrics and deadlines to drive performance. Highly effective sales managers find numerous ways to come alongside team members to motivate and reward them in a social format that brings out the best in them in a way that inspires everyone.

2. Build the new team; finding and hire new talent. Effective sales managers are committed to hiring the best talent available. McCracken should hire the best people, and save loads of time and money on training while protecting you from failure. It costs more up front, but it definitely pays off over time. Look for individuals with social goals that are already more aligned with your organizational goals. 3. Key Performance Indicators are the attachment of your communication strategy. An integral part of a consistent winning tempo is the tone and the topics of your communications with your sales team. Nothing is more important to sales makers than knowing what is expected of them and when it is expected. Effective sales managers keep their communication clear and their expectations well defined, so that team members know what to aim for, and understand what will happen if they hit it (or not). 4. By managing the Forward Pipeline: Most sales managers appreciate the necessity of communicating regularly with team members about pipeline and forecasting. However, highly effective sales managers understand that there is a difference between the two. Forecasting is focused on late stage deals. It does little to help with future quarters. Pipeline is focused on the future development of sales, which ultimately impacts later forecasts. Most managers don’t differentiate or understand the difference between the two. Keep this in mind when aligning new goals. When coaching for performance, help some reps better understand your coaching by pointing out the respective impact on pipeline or forecasting. 5. Leading Indicators: Worrisome patterns of behavior. Effective sales managers are always thinking ahead; they can recognize what small trends indicate before they become big problems. By noticing small changes in sales rep performance in what otherwise might look like still “reasonably” good numbers, the sales manager can be proactive by coaching reps as they perform. In doing so, the manager helps prevent weaker performances from becoming anchored as bad habits that sap overall yearly productivity and sales. 6. You can’t sell if you aren’t spending time with customers. Highly effective sales managers practice good time management habits, and they enable their sales teams to make the most of their time by eliminating demands on their time that don’t directly help drive revenue. With clearly aligned goals, all activities can be quickly evaluated. Activities that don’t support these goals can be eliminated or updated to bring them into alignment.

BIBLIOGRAPHY http://www.studymode.com/essays/Case-Study-Analysis-Jive-Software-708479.html (Accessed on 13 March 2014) http://www.mbaskool.com/business-concepts/marketing-and-strategy-terms/1919-sales-quota.html (Accessed on 14 March 2014)

http://work.com/blog/2012/10/12-tips-for-sales-managers/ (Accessed on 15 March 2014) http://www.ask.com/question/what-is-the-definition-of-pipeline-management (Accessed on 15 March 2014)