The rapid acceleration of the digital transformation of sales has placed buyer engagement insight at the top of technology priorities. It is now imperative for B2B organizations to have a comprehensive view into buyer relationships and engagement activity. Organizations need to use this intelligence and insight to improve the buying experience and value delivered during the buying process. Engagement insights are also vital in helping optimize the performance of customer-facing resources and the revenue engine while providing greater rigor and predictability for future revenue.
What Is RO&I?
While VC investment is surging into this evolving category in 2021 (see below), the category shares overlapping functionality with other categories, leaving some buyers confused. This week, we published our first New Tech report on RO&I with the goal of removing the ambiguity around the category and presenting a review of the emerging vendors in the RO&I solutions market. Forrester defines revenue operations and intelligence solutions as:
Technologies that leverage buyer signals and interactions to produce insights that allow go-to-market functions to continuously improve execution performance and optimize the revenue engine across multiple areas: engagement and productivity, revenue cadence and forecasting, and the overall optimization of the revenue engine itself.
Is Revenue Operations And RO&I The Same Thing?
Revenue operations is an aligned operating model for managing the revenue engine; it’s not a tech category. Revenue operations and the broader management of the B2B revenue waterfall require the application of multiple technology categories (already covered by Forrester’s evaluative research) including marketing automation platforms (MAPs), sales force automation (SFA), sales engagement (SE), configure, price, quote (CPQ), billing management, and others.
What Is The Value Proposition Of RO&I?
RO&I solutions have prospered by filling feature, user experience, insight, and execution gaps within and between some of the existing tech categories to create a new value proposition for buyers. This value proposition includes improved seller productivity through automation, higher value engagement (by understanding buyer preferences), and the ability to identify successful seller behavior (activities, messaging) to guide other reps to improved performance.
RO&I solutions augment frontline and manager opinion with engagement insights that help validate deal or relationship health and prioritize opportunities through deal probability or engagement scoring algorithms. These scores drive greater forecast accuracy by providing transparency into the sales process and greater accountability across sales teams.
How Is The RO&I Market Segmented?
As mentioned above, this can be a confusing space. There are significant functionality overlaps across providers in the RO&I category, a feature of this category that is likely to increase as convergence and M&A activity continue to a point where distinction will become increasingly difficult in terms of category segmentation. For now, however, there are differences when it comes to focus, prioritization, and messaging that provide the key to segmenting the category. Based on the primary focus of providers, we see three distinct segments:
- Engagement and productivity optimization. Broadly termed in the market as “revenue intelligence,” this segment’s providers lead with optimizing human engagement as the main lever to increase deal conversion, growth, probability to close, and buyer value.
- RevOps cadence and forecast optimization. While sharing many of the same capabilities of providers in the above segment, providers in this segment lead with their ability to help revenue leaders and their teams manage the key revenue operations cadences (not to be confused with outbound cadence management) that are focused first on forecasting, pipeline management, and sales analytics.
- Revenue engine analysis and optimization. While providers in other segments largely focus on deal and account optimization, providers here look systemically at the overall performance of the revenue engine itself. An emerging segment with considerable room to grow in terms of functionality, this segment looks to answer strategic questions about the efficacy and efficiency of the key revenue processes across all functions. The goal is to drive consistency; continuous improvement and experimentation of key processes; and refinement of the go-to-market strategy and its cross-functional execution.
How Dynamic Is The RO&I Market?
This category is hot. Based on data from Venture Scanner, VC funding jumped from $321 million in 2020 to $952M in 2021 (as of the end of August). Seventy-five percent of that funding is going to a handful of late-stage providers that we would not be surprised to see IPO in 2022 (depending on market conditions, obviously). In addition, there has been a consistent flow of acquisitions throughout the year. Clari, People.ai, Xactly, and ZoomInfo all made acquisitions in this space in 2021 to broaden their reach, further driving convergence and consolidation within this category.
Most recently, on October 12, Outreach announced the acquisition of Canopy (an RO&I vendor that provides revenue intelligence, forecasting, and sales analytics), giving Outreach capabilities across sales engagement and revenue operations and intelligence. Sales engagement is clearly breaking out to become a much broader platform — more on that in a later blog.
How Does Our New Tech Report Help You Understand The Market?
Our New Tech: Revenue Operations And Intelligence, Q4 2021 report provides revenue and technology leaders with an overview of the primary capabilities and providers within major market segments to help inform their technology strategies. The report is now live on the Forrester portal for clients. For nonclients who would like to purchase the report, contact Forrester for more information. Our research on this category does not let up, with a Forrester New Wave™ evaluation on RO&I publishing in February 2022, so stay tuned for more!