What is RevOps? What you should know about the new function brewing
Making sales and generating revenue are both significant yet challenging tasks for any organization. However, to address the same issue, the term, RevOps (Revenue Operations)
has gained quite a hype in tech, and its popularity is growing at an astronomical rate. It has quickly surpassed the various trending terms in popularity.
RevOps is a strategy to better align the organization; it is not a function. It is the operating approach for generating effective, predictable income. However, it is entirely a new term in the environment of sales and holds much confusion about its role among the masses.
Businesses constantly seek revenue growth, and after a period of flat or declining revenues, this demand intensifies. In reaction to favorable economic conditions, sales and marketing teams scale their efforts to accelerate growth through a number of particular initiatives.
What is meant by “RevOps”?
Revenue operations are the process of managing revenue transactions. It includes activities like billing, collections, and other revenue-related processes.
Revenue operations are a vital part of every company’s business model. It helps in generating more revenue by ensuring that all the necessary steps are taken to charge customers for the services rendered and ensuring that they pay on time.
It is a process that combines all the siloed dimensions of a business and makes them work together to maximize the revenue potential of an organization.
What is new about RevOps?
To create more efficient and effective processes, a shift should be made from following the traditional approach. The term has proven to be revolutionary in the world of sales, and RevOps is more about tool implementation, administration, and processing of designs.
Taking any SaaS business towards growth is not an easy task. It requires looking for new revenue generation opportunities, preventing revenue leakage, and supporting better customer relationships. A dedicated revenue operations function is required for a SaaS company for two obvious reasons:
1: Inefficiency is the evil by-product of growth
Siloed data and processes between revenue-generating activities prevent SaaS firms from grasping the whole picture of their operations as they grow. When individual operational positions are preoccupied with only their tasks in sales, marketing, finance, or success, this is the point where they begin to lose sight of the bigger picture.
2: Inefficiency is usually invisible
Although it is the part of the Operational team to keep track, while this might not take too long for your business to reach the point where it needs RevOps, before inefficiencies become visibly unbearable, you won't know until you miss your larger goals.
From the start of demand generation all the way through to retention, upsells, and revenue recognition, operational inefficiencies affect every stage of the revenue cycle. And when you approach it that way, pretty much any division in your company that has an impact on revenue, either directly or indirectly, has room for RevOps efficiency.
Fostering sustainable growth in SaaS Businesses is hard
Subscription-based business models are not easy to maintain. They require a lot of hard work and dedication. No alignment between goals and actions becomes a prominent factor in halting the growth of an organization. Also, It becomes important to understand the customer needs, offer value, and provide a good user experience.
The key to success in this model is to make sure that the customer is getting a lot of value from their purchase and that they are satisfied with your service.
What does RevOps actually do?
Let's dive straight into knowing the factors RevOps work on before moving ahead with other details.
- Measuring and lowering friction in upsells, sales, and acquisition
- Real-time insight into the areas where your profits are being lost
recognising, foreseeing, and minimizing churn - Maximizing the value of each transaction in your sales funnel
- Streamlining financial procedures allows you to spend more time developing future strategies rather than collecting measurements
- Improving the efficiency of your A/R collections and the effectiveness of your revenue recovery procedure
- Continually scanning each stage of your revenue cycle.
Impacts of Poor Technology
In many businesses, the interdependencies and misalignments between teams, along with wrong approaches taken towards revenue opportunities, serve as a significant barrier to progress. The such mismatch is typically caused by antiquated technologies which do not advance as the business expands.
Ambiguity about RevOps
RevOps, as a function, doesn't have a single owner. The major factor which differentiates it from other operational sectors is that RevOps is totally separated from the sectors it works for. The organization's functions for RevOps are dispersed.
This emphasizes, however, to give RevOps the attention it needs to be effective for the business. To counteract such randomness, a robust method must be implemented.
Processes become inefficient without RevOps
This process starts with diagnosing the potential gaps in the path of successful business operations. No matter the size of an organization, its revenue growth plan suffers with time if not modernized with time.
Poor strategic alignment, a lack of process efficiency to identify the opportunities, and the tools that didn't scale as teams grew in size are the challenges that organizations face and keep them from achieving their main objectives. However, the companies who invest in RevOps platforms get immense advantages from it.
Every organization should include RevOps best practices to achieve intentional success.
Outmoded Revenue Management technology
The very first reason for businesses lacking in their sales sector is the outdated technology still on the surface. Although RevOps is a new idea, people are becoming more aware of it.
Companies who recognize the value of RevOps attempt to speed up the process by adopting digital, but their billing suffers as a result. Due to technical flaws and gaps, money gets lost. A business's technological stack must adapt to the rapid changes in business requirements..
The majority of the people we surveyed concur that the segregated revenue functions are a result of this technology backlog. As billing systems and revenue-generating processes operate independently, the whole point of collaborating to expand gets compromised. This is another factor contributing to the difficulty in carrying out the regular operations of the company.
Synchronized efforts of revenue-driving teams required
The rise of RevOps came from a point where alignment between the revenue-generating teams was not walking parallel. Teams moving for different goals with different approaches cause soiled operations to pile up, which hit the growth of business hard.
In order to outperform the competition, a company's marketing, sales, finance, and customer success departments should be more closely aligned and work as a whole. Simple horizontal alignment between teams is insufficient, and a more creative solution is required.
All operations related to revenue are included in RevOps, which by default, assures cross-functional alignment. Additionally, it aids in data streamlining, analysis from this one genuine data hub, risk awareness, and bringing alignment across processes.
RevOps produce extremely advanced companies
Whatever the size of a business, a strong, aligned, and centralized approach is required for the making of successful firms. And there is a solution to this problem which is none other than RevOps. Good for any sized business, RevOps guides high-maturity businesses and small businesses to high maturity.
Early-stage businesses can get by with Excel and Google Sheets, but high-maturity businesses require billing intelligence to guide their decisions. Earlier shifts towards reliable and powerful technology enable more flexibility and effectiveness.
Because of RevOps, a company is more successful and moves closer to high maturity.
Final Words
Revenue Operations is more than just a tactical method of revenue management. It shifts the focus of your business towards the wider picture of the business’s improvement.
With the alignment that RevOps creates, businesses are better able to use their data, make wiser decisions, move more quickly, attract more clients, and keep their current clients. All of this enables you to grow your company and make sensible use of your revenue.