The Changing Mandate of Deal Desks

 

[image error]Much has been written about how deal desks will revolutionize the sales function. In fact, in a recent poll, 87% of SEC Members report having, or planning to have in the near future, a deal desk.

For the last two years, we’ve tracked this emerging function as their role continues to evolve. Last week we sat down with three members to discuss the evolution and development of their deal desks.

Our latest survey discovered two changes in deal desks’ role and operations since our last benchmarking survey in 2011. The first change we found was a shift in deal desk responsibilities. As deal desks are a relatively new function, their internal duties and tasks have continued to evolve as internal demand fluctuates and the full potential of deal desks as enablement tools is realized. Also, as a result of these changing responsibilities, the function deal desks report into has shifted as well.

In the first few years of operation, deal desks primarily approved deals and were involved with deal execution. Now, as deal desks mature, their focus has shifted to deal intelligence and becoming a strategic business partner in deal enablement.

In particular, our latest benchmarking survey found three deal desks’ tasks that have increased:

Approving deals with non-standard terms and conditions
Structuring complex deals and providing negotiation support
Developing and delivering sales enablement tools

However, not every deal desk responsibility has increased. We found a reduction in the number of desks that are tasked with responding to RFPs/RFQs. This change is due to the increasing specialization on complex, cross-functional, and non-standard deals that now consume deal desks’ resources.

Changing responsibilities have led to an internal shift in deal desk reporting structure as well. Our data shows that 45% of deal desk heads report into Finance, compared to only 11% in 2011. Because deal desks are increasingly focused on deal economics, reporting into Finance allows them better access to finance resources, resulting in more pricing consistency and faster approval rates for deals.

As the internal location of deal desks settles, compensation of deal desk employees presents a new challenge to companies. Due to the unique involvement in deal processes, which differs from traditional rep activities, deal desk employees generally have a different compensation structure.

As deal desks are becoming increasingly involved with Finance, and playing a larger role in assessing the risk and reward of deals, companies are ensuring compensation does not influence deal decisions.  Variable pay is generally not based off of sales metrics because it could bias deal desk employees and lead them to approve sub-par deals to achieve a target bonus.  As compensation for deal desk employees continues to develop, sales organizations are looking at gross margin profit, overall company performance, and realized price of deals as bonus metrics.

SEC Members, listen to the webinar replay where we share the results of our 2012 deal desk benchmarking survey and tips on how to manage and structure these functions. Also, review the key findings page to better understand the emerging role and mandate of deal desks.