Sales operations strategically link the sales and operations of a business to ensure sales activities seamlessly dovetail with back-end business activities such as manufacturing and inventory control. Several pernicious issues that may affect sales performance are targeted through this strategic linkage of front-end and back-end operations. Surges and slowdowns in production related to inaccurate forecasting cause headaches for operation managers and sales personnel alike. By having a unified management strategy that addresses both demand and production activities, a business may better prepare itself to meet inevitable swings in demand.
Overseeing aspects of traditional sales activity is also a responsibility in sales operations. These would likely include allocation of territory among sales personnel, determining and managing compensation schemes, setting sales goals to closely align with manufacturing or servicing capacity, and ensuring sales staff are fully trained in customer relationship management. The latter is a scientific, highly methodical approach to the creation, building, and cementing of positive ongoing relationships with customers.
This business field is a relatively new career track. It is increasingly being adopted for its perceived strategic gains in efficiency. If sales lag, inventory buildup saps profits, often forcing markdowns to clear older merchandise so that new goods can be placed in showrooms and on shelves. When sales surge, losses occur from missed opportunities in staging enough product for those times when customers are ready to buy. Effective sales operations management aims to achieve a reliable, consistent flow in the sales pipeline.
Although sales operation managers may not be involved directly in the manufacturing processes, they will likely be expected to have an adequate understanding of them. This is so they are able to direct sales teams while being grounded in the company's production capacity and forecasting. It is for this reason that sales operations managers frequently have experience or training in finance. Sales operations managers typically are also expected to understand inventory management and production capabilities, especially as these relate to the sales department.
Sales operations managers will likely be aware of inventory status, and will understand lean manufacturing principles. Accurate order forecasting is the first link in the chain that fuels the entire sales/production cycle. As a result, successful sales operations fundamentally rest upon rich communications between operations and the marketing department.
When key individuals engage in silo behavior, that can hinder sales operations. This occurs when personnel do not share information that is crucial to successful coordination and execution of company goals. A lack of communication may result in missed opportunities to optimize sales leads, gain valuable customer feedback, and take manufacturing restraints into consideration when formulating performance goals. As a result, those working in both sales and operations may also have a background that includes interpersonal communications.