Red, yellow, green: Closing a deal can be as simple as driving a car. Under the hood, a modern car is very complex, yet it is easy to use. Nowadays many cars can even warn us when something is wrong. No warning lights on the dashboard means that all is good, but when the light turns red, we know we must get to the nearest garage and find out what needs to be fixed.
The nominees for the 2018 Hasso Plattner Founders’ Award from the Global Finance & Administration Board Area did not have cars in mind when designing the Deal Health Index, but they did follow this same logic. When a deal is entered in the quoting system, the default status is marked as green. But as the deal cycle moves forward and potential risks become visible, this can change. The deal – or more precisely, the health of the deal – can turn yellow, or even red.
The Deal Health Index looks at different components of a deal and functions as a safety warning in the deal approval process. It assesses and alerts account executives of various financial, legal, and operational risks. With these tools, sales employees can make quick decisions and experts can assess potential problems more effectively and undertake fixes. They can consult with business partners and make rapid decisions about approving a deal across different levels of the organization.
Robin Manherz led the Commercial Finance Team when the Deal Health Index was ideated and remembers the factors that inspired the team: “There were a couple of triggers for us to work on this topic. We got feedback from stakeholders and executives across the organization that the deal support process was very cumbersome, involving many people. This feedback coincided with the decision to implement a new quoting system as part of the Simplify Selling program.”
As part of the Simplify Selling program, a workstream was created with members of the commercial team and the sales operations team in order to improve deal efficiency. Reassessing turned into rethinking, and from there the team developed the idea into something bigger. With the same boldness that moved SAP into the cloud, the team began to integrate new business principles and an entrepreneurial spirit into their project.
In recent years, the Deal Health Index has evolved into the rapid, agile deal assessment process it is today, empowering stakeholders across SAP. Sales teams now have easy access to their deals’ health information. They can make informed and efficient decisions based on the health of a deal and clearly assess any associated risks. The Deal Health Index even gives recommendations on what to do when a deal is not “green.”
Customers can also be kept up-to-date quickly about the status of their deal. Meanwhile, finance teams have seen significant decrease in manual efforts and have a more modern, effective, and transparent insight into deal cycles.
The Deal Health Index is already live across 82 different market units and has been used by 2,500 employees in sales, resulting in nearly 4,000 customer quotes so far. Joel Bernstein, chief financial officer of Global Customer Operations and head of Global Field Finance at SAP, said, “What the Deal Health Index team pulled off is truly amazing. They were instrumental in making this change happen across SAP, so we do better business for ourselves and for our customers.
When asked about the one thing she would like SAP employees to take away from this project, Robin Manherz explains, “As stewards of the company, we feel it’s important everyone has SAP’s best interest at heart while balancing the requirements of our customers. As transformation agents, we took it upon ourselves to simplify aligning this balance, thus improving the productivity of our people and the quality of our transactions”