Problems with Jive Software

Q.1 Problems with JIVE Software

The company had failed to achieve its previous two quarterly targets and as a result the company had to lay off 25% of its sales force. Lack of clearly defined business and sales processes and a looming economic slowdown were the main reasons for the failure of the company.

Finance

• VP finance was struggling to crack down basic metrics of Jive's cash flow.

• Unclear financial reporting and business metrics were followed.

• Venture funding was not managed well by sufficient planning on how to use and manage the funds.

• There was a lack of visibility and transparency in the system and even the VP was unable to manage the operations effectively

• Revenues generated from each territory were not divided on product basis due to which evaluation of product performance became difficult

• VP finance did not have the leadership quality to make strategic decisions and plans which would leverage the firm's finances with its growth and plans of scaling up.

• The feedback from the CFO came once the quarterly cycle was complete resulting in less scope for the sales force to align or improve according to the management requirements

Sales

• The sales teams and processes were not aligned with the company goals devised by the top management. Due to this the sales team were focusing on the wrong target segment. They targeting small SMBs as they gave continuous business when they should actually target enterprise wide projects as its products became more sophisticated and expensive. Also targeting enterprises would drive focus towards the future goals and prospects of the company.

• Due to a large sales cycle, the deals took a long to time to close. This is mainly because the sales teams approached leads in a haphazard manner and did not focus on the target segment.

• The number of sales persons required was based on financial projections presented during fund raising, even when they were not clear about the market demand and potential of their sales force at individual level

• Absence of a proper pricing policy because customers were not screened according to their business size and segment.

• Sales force was distracted as the sales reps were dealing with a large number of products with little focus.

• System did not instil appropriate incentives.

• Inadequate recruitment of the new trainees with no proper training structure in place. The sales force was suddenly enlarged without proper planning. Exhibit 5 on the case shows that the Sales FTE did not increase