Common Ground

The current growth of software and technology for sales enablement and marketing automation is one industry fueling both startups and venture capital investments..  As this industry segment grows, it will also fuel mergers and acquisitions.  In the short term, it also foreshadows new developments in business functions that traditionally rely on human skills – including dealmaking.

Over the past year, hundreds of start-ups and new products have emerged in the marketing automation/sales enablement space, automating, measuring, and monitoring everything from return on investment on social media for corporate brands to customer and prospects’ behavior on a company’s website to the prospect cultivation process.

These developments in demand generation, lead generation and sales readiness software have not only opened up a brave new world in which the customers and prospects influence company perceptions in the marketplace. It’s also becoming part of the way sales get done.  

Companies that adopt these new technologies are essentially automating the processes of buying and selling  - processes that traditionally are embedded in the human-based sales role.  These companies are separating the process and structure of buying and selling from the relationship and skill-based art of selling.  They help to ensure that the human elements of selling are put to use earlier and more effectively in the cycle and aren’t spent on processes that need to be consistent and repeatable.

It’s an interesting development.  It also represents a recognition that all business functions – even those requiring innate and highly developed human skill - have structures or processes that need to be consistent and repeatable. 

Operations-focused enterprise software moved business functions from spreadsheets and individual workstations to decision-enabling applications a decade or more ago.  The new wave of automation software in sales and marketing indicate that business functions  associated with intuitive, human  processes – marketing, sales and yes, dealmaking, can and are being streamlined with software. 

Like the move from spreadsheets to fully functional, access-controlled software for business operations, the human skill-based functions are moving from one-way communications and access tools such as email, fax and hard copy.  Decision-enabling, access-controlled software, including services such as Transaction Commons, are changing the way deals get done not by replacing human capital, but by maximizing it.  A secure neutral space for negotiating the deal and an automated process for tracking the timing, versioning and receipt of deal documents do precisely that.

Dow Jones VentureSource research on the percentage of mergers and acquisitions since 2000 that were valued at $250 million or more found that these deals accounted for only 5.1% of venture-backed companies sold during the period.  The median price paid for a venture-backed company during the first nine months of the year was $21 million, according to VentureSource www.venturesource.com.

In a growth economy, human skill in putting the deal together is a primary factor in closing a deal.  In the current environment, in which deals are trending toward smaller and fewer, using that human skill efficiently is all the more important.