When your business is helping customers accelerate and maximize their lead-to-money process—the business alchemy that turns leads into paying customers—it’s safe to assume you often have sales on the brain.
That’s certainly true at CallidusCloud, a recognized leader in sales performance management solutions that’s helped more than 5,400 organizations equip their sales and marketing functions so they can drive bigger deals, faster.
So it’s unsurprising that sales capacity planning—with the goal of hiring the right people at precisely the right moment—has been a major focus for the fast-growing company. But like in many companies, sales headcount planning at CallidusCloud can be a little involved. The company’s sales force is divided between enterprise and volume sales, then further fragmented by geography, product line, industry sector, and other dimensions that in the past had complicated attempts to develop a plan that reliably forecasts sales capacity. Because some aspects of the process had yet to be modeled in Adaptive Planning, the FP&A team was left without timely or accurate answers to questions that were fundamental to the business.
“Every time sales asked for a headcount, we had no visibility into how much those new sales reps could generate in bookings or when those bookings were likely to happen,” recalled Han Kim, senior FP&A manager at CallidusCloud. “So in turn, we had no good way to estimate how much revenue generation we could expect from that rep. The whole thing was an educated guess.”
A powerful model for accurate planning
So Kim and his colleagues in the FP&A group built a model in Adaptive Planning with inputs that hinge on some fundamental, if crucial, assumptions, such as the spread of new quarterly bookings by month, quota assignments, booking goals, attainment percentage, and commission structures. CallidusCloud maintains one set of assumptions for its enterprise sales team and another for volume sales.
The assumptions themselves can be tricky. One assumption posits how long it will take for a new sales rep to become fully productive. The team assumes it would take a new hire nearly a full year to reach that point, with productivity increasing gradually as the rep acclimates to his or her job. All this is factored into the model.
Adaptive Planning uses these inputs to calculate the effective quota, capacity, and ramp rate for each hire. By combining productivity and attainment, analysts can determine the optimal number of sales reps by business unit.
Don Sherwood, senior director of FP&A at CallidusCloud, said the model offers the FP&A team powerful new planning capabilities. “We now drive the hiring plan for sales rather than guessing or over-hiring to meet targets,” explained Sherwood. “This process made us realize that we must be very proactive in hiring to meet sales targets six to 12 months into the future. Previously, we were always hiring in a reactionary mode.”
Kim added that the insights can get granular. “We can see if we are short 10 reps, for example, to meet corporate goals,” he said. “We can do what-if scenarios to see what happens when we add three reps, and we can find the optimal point of who to hire when. We built the logic to calculate everything forward, so ultimately this becomes a goals-seeking exercise.”
‘Flawless’ NetSuite integration
Like the more than 700 other organizations that take advantage of the Adaptive Suite’s tight, two-way integration with NetSuite, CallidusCloud brings P&L information directly from NetSuite ERP into Adaptive Planning for always-current plans, forecasts, and reports. “The integration is very flawless,” said Kim. “It happens with just one click.”
While useful every day, that seamless data flow is vital at certain times. “We’re just closing our quarter, so we refresh actuals at least once a day, and usually two or three times a day,” said Kim.
Just as helpful are Adaptive Planning features like Cell Explorer, which lets users drill down and analyze the source data used to calculate any number or metric. “We use that function all the time, especially during month-end and quarter-end close,” noted Kim. “When we get the next month’s preliminary actuals, our entire FP&A team looks for variances and transaction details to see what we missed or what we failed to budget. Throughout it all, we drill right back to NetSuite directly. It’s all integrated completely.”
From one source of truth, a sense of control
Kim said the big benefit of integrating NetSuite ERP data with Adaptive Planning is that it gives the company a single source of truth. “Having one place as a source of truth allows us to run any report and the numbers will never change,” he explained. “As a public company, we can’t have variances between the historical data that we work with internally and the numbers we report to the Street. Even the smallest variance would be a huge deal. So we’re always looking to retain control over our system of record.”
For this, Kim said, Adaptive Planning is far superior to other options. “Controlling versions in Excel is just a disaster. Everyone has access to the files, and you never know who changed what. But with Adaptive Planning, I can see who changed it and how. Having that control is a huge benefit to a public company where we have to be sensitive about how consistently we present data.”
Future plans for planning
While planning today mostly resides with the FP&A team, the group aims to extend the process to other departments. For now, the company’s head of IT reviews budget against actuals, right from Adaptive Planning. Eventually, however, CallidusCloud wants to leverage the collaborative features of Adaptive Planning to make planning a team sport among more stakeholders.
Then there are non-GAAP benchmarks. Kim said the company will soon be benchmarking CallidusCloud’s software as a service KPIs against those of competitors. “We have a group of companies that we want to measure ourselves against,” he said. “It will help us make decisions about where our money is spent, and we can see how this compares with our peers.”
Visit our Customer Success section to learn how Adaptive Insights has helped other companies transform FP&A with active planning.