VMware suspected that their sales conversion rate was falling when the time taken to move the opportunity through the sales process increased. They needed the data to prove it, and they needed a solution to help them identify the root causes and areas for improvement. VMware turned to process mining and Celonis.
During the San Francisco stop on Celonis World Tour 2023, Pratap Aditya, Director Business Process Management and RPA Operations at VMware, shared how the virtualization pioneer and cloud services provider is using Celonis EMS to improve their sales pipeline hygiene and accelerate sales opportunities.
“Every enterprise is a collection of processes,“ said Aditya. “We want to use [Celonis] for as many processes as possible.”
VMware’s Business Process Management (BPM) team is primarily responsible for helping the company shift from on-premises offerings to SaaS offerings and providing a seamless customer experience. The BPM team began using Celonis EMS for the platform’s ability to provide automated process discovery and data-driven process diagnostics. Using Celonis the team would be able to benchmark processes (both internal and external) and help them business value and baseline KPIs for tech programs (such as migrating ERP systems).
VMware had used Celonis for processes such as order management and invoicing, but the BPM team thought process mining could also improve their MSO sales opportunities management. Aditya said VMware’s lack of detailed analysis on sales opportunity progress was preventing the company from taking a data-driven approach to optimizing the opportunity management process. Additionally, there was no visibility into the journey of an opportunity through the process or the speed with which it was moving from one stage to the next. This bad opportunity hygiene caused several problems:
Pipeline and forecasting reports weren’t accurate.
They didn’t have insight into why deals weren’t being closed.
They didn’t know how long deals were taking to close.
The BPM team implemented Celonis with the goals of:
Improving pipeline hygiene to improve the accuracy of pipeline forecasting
Increasing close rate by understanding why sales opportunities were being lost
Identifying sales opportunity accelerators to improve sales velocity
Pratap Aditya, Director Business Process Management and RPA Operations at VMware, on stage in San Francisco during World Tour 2023
Using Celonis, VMware discovered that significant value was hiding in their sales pipeline. By analyzing the variants in their sales process, the BPM team identified several areas for improvement, including the following:
Sales guidelines were not followed: 30% of sales opportunities were moved directly from “Discovered” or “Qualified” to “Closed Lost.” These opportunities were open on average of 92 days without progressing through any other stages of the sales process. The lack of visibility into the progress of sales opportunities meant that leadership couldn’t accurately forecast their pipeline nor determine why deals were lost, because they couldn’t see the stage in the sales process at which the loss occurred.
Stale renewals and opportunities: 17% of sales opportunities were enterprise license agreement (ELA) renewals that hadn’t been modified in over 30 days. 18% of sales opportunities hadn’t been modified in over 30 days.
Certain to win opportunities: A small percentage of sales opportunities (1%) were created and closed within 7 days. Aditya said it was “not normal” for deals to progress this quickly. VMware’s products are deeply-rooted into their customers’ infrastructure and it generally takes longer than a week to do all the work required to close an opportunity, such as creating a proof of concept. It appeared that a small number of individuals were only entering deals into the system once they were sure the deal would close. These “born to win” opportunities, as Aditya called them, caused several problems. First the leadership had no visibility that the deals were being worked on. Second, while these won deals were entered into the system, the lost deals (on which a significant amount of time is spent) weren’t.
Additionally, the BPM team ran benchmarks for KPIs such as sales velocity and close rate on sales opportunities based on factors such as status, geographic region, territory, segment and product. They found that there was a considerable variance in conversion rate between products and that the opportunity conversion rate fell with an increase in the time it took to move through the sales process stages.
With the above learnings, the team took several corrective actions:
Redundant processes: Sunsetted the redundant processes that were not adding value
Variants of concern: Restricted the variants of concern (e.g., the 30% of opportunities that moved directly from Discovered/Qualified to Closed Lost) progression path in a systematic way directly within their CRM system
Process monitoring: Provided self-service dashboards for Sales leads to monitor their team’s opportunities
Diagnose lost opportunities: Developed the capabilities within the system to capture the reason a deal was lost at a granular level
The team also shared several key takeaways with Sales leadership, for example:
Close rate is 2X higher when an opportunity properly moves through the stages of the sales process and when the required fields are populated in the CRM system.
On average, closed opportunities only flow through 3.9 stages of the sales process and stale opportunities (those untouched in the past 30 days) account for ~24% of open opportunities.
Only 2.3% of opportunities flowed linearly through the main stages of the sales process.
Aditya said that VMware plans to expand its use of Celonis for optimizing the MSO sales opportunity management process, the following ways:
Onboard more processes: Bring all the processes that affect deal velocity (order management, invoicing, etc.) into Celonis
Create an E2E view: Establish an end-to-end, data-driven view of the Deal from Lead to Cash
Expand Celonis footprint: Increase the use of Celonis EMS and process mining within VMware to optimize processes such as I2R and H2R
World Tour 2023 features 10 stops around the world including Munich, Milan, San Francisco, Madrid, Amsterdam, Tokyo, New York, London, Paris and Chicago. Each additional stop features Celonis ecosystem partners, customers and process experts from across industries sharing best practices and knowledge.