• Sales Execution Chief Revenue Officer Revenue Collaboration & Governance

The Simple Guide to Revenue Governance

Clari Team

How can some companies still win 24% more deals, capture 39% more revenue, and come within 5% of their forecast predictions despite an economic downturn?

Because these top companies have achieved revenue precision. 

Revenue precision allows them to avoid the dreaded 14.9% in revenue leak that the average company suffers every quarter. And it ensures these businesses emerge from a downturn stronger than before.

Revenue precision should be the goal of every company. And the way to get there is through Revenue Collaboration & Governance (RevCG). Unlike outdated tools such as ERP, CRM, spreadsheets, and databases that companies spend billions of dollars on each year, RevCG offers a framework that is purpose-built to run revenue. 

Revenue Collaboration & Governance treats revenue as a process, not merely an outcome. RevCG is what enables everyone from sales reps to the CEO to confidently answer the question, “Are we going to meet, beat, or miss on revenue?”

This guide breaks down the strategy by focusing strictly on the governance aspect of RevCG. Read on to learn about revenue governance and its contribution to revenue precision.

What Is Revenue Governance?

Simply put, revenue governance is the ability to control the end-to-end revenue process. It’s about ensuring that every step in the revenue process and every decision made is backed by accurate data and optimized to minimize friction. 

Coupled with revenue collaboration, which connects the systems and revenue-critical employees that capture and generate revenue, revenue governance ensures the revenue process is operating smoothly and efficiently, and progress is effectively tracked and measured. 

“Governance is an act of trust between the leaders creating strategy and the teams executing it on the frontline with their customers,” says Ben Chen, Growth Strategy at Clari.

What Is the Goal of Revenue Governance?

Ultimately, the goal of revenue governance is to deliver complete transparency and total control over your revenue process. It aims to keep collaboration points in the revenue process in check.

“Collaboration without governance is chaos,” says Chen. “If everyone is running their sales process in different ways, referencing different standards, executing toward different expectations, it is impossible to achieve revenue predictability—and thus impossible to achieve revenue precision.” 

Revenue governance is an essential step in the prevention of revenue leak and achievement of revenue precision.

The Revenue Governance Framework

Revenue governance dictates that your organization be specific about metrics, definitions, swimlanes, and processes. The revenue governance framework that you implement will:

  • Bring together fragmented data and processes into a shared source of truth (SSOT), which is up to date and accurate at all times
  • Deploy artificial intelligence and machine learning to optimize workflows
  • Make actionable insights available to all revenue-critical employees

Revenue governance does not equal micromanagement. It’s actually the opposite: Employees are empowered with real-time data and insights to start conversations on a strategic level, rather than waste time on fact-finding missions.

How to Create a Revenue Governance Process

There are three steps to creating an effective revenue governance process.

1. Develop a governance model

First, develop a governance model for your organization. What does revenue management look like for you? 

According to Clari CEO Andy Byrne, executives struggle with a few main issues when it comes to revenue: “They can’t see what is happening in their business. They can’t control the processes they’re responsible for. They can’t accurately predict results. And they don’t have an enterprise system to run revenue.”

To combat these problems, your revenue governance process should:

  • Ensure that all revenue-critical employees have visibility into what’s happening with the business and collaborate with an up-to-date, easily accessible shared source of truth.
  • Empower teams with accountability for actions and results, driven by data and, ideally, AI insights.
  • Create clear, repeatable systems for communication and seamless handoffs. Your revenue governance strategy must also continuously monitor these systems and handoffs. 

As the team grows and business needs change, your initial processes will inevitably develop friction. Revenue governance is about setting a standard for how things are done and then always making sure that standard is met—and when it's not, making sure you find out why. It might be that the standard itself needs to change, or the process it governs needs updating.

Enable teams by defining clear roles and expectations

A critical step for securing revenue governance is to ensure all revenue-critical employees are on the same page and know what’s expected of them. That requires clearly defining individuals’ roles and responsibilities and laying out how individuals, teams, and departments work together toward shared goals.

This step will also ensure that:

  • Everyone on your go-to-market team knows exactly how and where to access real-time data to inform their conversations and strategy
  • Everyone is working from the same set of key performance indicators, which support your company’s overall strategic growth initiatives
  • Everyone is on the same page when it comes to cadences and sales cycles
  • All revenue-critical employees speak the same language regarding metrics, data points, and other key terms.

3. Accurately measure performance

If you’re not accurately measuring your performance, you can’t see how well you’re working toward your company’s strategic goals—and you certainly can’t meet those goals. A critical piece of any revenue governance process is tracking, measuring, and analyzing your revenue operations performance.

In addition to tracking these 15 sales metrics, revenue leaders will want to ensure that there are processes in place to review qualitative data, such as how well teams are collaborating, what coaching opportunities have surfaced, and employee performance. Measuring the performance of handoffs is also critical.

Tools For Revenue Governance

Using the right technology can transform your revenue governance process. A revenue operations platform, for example, can streamline the steps involved in implementing revenue collaboration and governance by:

  • Automating data capture to ensure all information is up to date and accurate
  • Bringing all data together into a shared source of truth
  • Providing deep visibility for each revenue-critical employee into the revenue process
  • Offering AI-powered insight and analysis into data to inform decisions and drive strategy
  • Flagging areas of revenue leak and breakdowns in the end-to-end revenue process for faster course correction and long-term resolution
  • Automatically tracking progress and surfacing individualized coaching opportunities for ultimate revenue growth

By putting a revenue platform into place, for example, Clari customers save an average of $28 million in revenue leak after two years, boost their win rates by 12%, and realize an additional $10 billion in revenue.

Learn how Clari can help you stop revenue leak and achieve revenue precision through Revenue Collaboration & Governance.

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