Introducing Automated Sales Force Systems

(1)

Introducing Automated Sales Force Systems

A case study at Guinness Anchor Berhad and Heineken Australia in order to optimize the use of their Automated Sales Force System

by Noud Duyzings

Australia

Guinness Anchor Berhad

(2)

2

Introducing Automated Sales Force Systems

A case study at Guinness Anchor Berhad and Heineken Australia in order to optimize the use of their Automated Sales Force System

27

^th

of February 2004 Author: Noud Duyzings Supervisors:

- Guinness Anchor Berhad: M. Chin

- Heineken Australia: N. Buttfield

- Faculty of Management and Organization: Drs. M.M. Bergervoet / Mr. Drs. H.A. Ritsema

Guinness Anchor Berhad

Australia

(3)

3 Preface

When I started my studies Management and Organization at the RijksUniversiteit Groningen, one of my objectives was to undertake my final research project in a foreign environment. My principal focus is Finance and one of my main interests is Management Control. GAB and HAU gave me the unique opportunity to do research in both companies regarding a field that can be linked to management control; Automated Sales Force Systems. The different companies, markets, countries, and cultures fascinated me greatly to do this research. My time in Malaysia and Australia turned out to be wonderful and I want to thank all my colleagues at Guinness Anchor Berhad and Heineken Australia for the great (karaoke) experiences.

Especially, I want to express my gratitude to Jac van Herpen and Michael Chin at Guinness Anchor Berhad, and to Hans Erik Tuijt and Nikki Buttfield at Heineken Australia for the opportunities I was given at both companies.

Finally, I want to thank Marcel Bergervoet and Henk Ritsema for their time and guidance during the process of writing this thesis.

Noud Duyzings

Groningen, 21

^st

of February 2004

(4)

4 Executive Summary

This research has been conducted for Guinness Anchor Berhad (GAB) and Heineken Australia (HAU), which are organizations similar in two aspects. Firstly, they both operate in the Malt Liquor Market; GAB in Malaysia and HAU in Australia. Secondly, they are both part of the Heineken group.

Both companies recently introduced an Automated Sales Force System (ASFS) within their organizations, but were not satisfied with the current use of it and therefore interested into the subject of optimizing the use of their ASFS. The main reason for GAB to look into the subject is that the implementation of the ASFS resulted in a considerable change for the working environment of their sales people. GAB wanted to have more insight in the current way of working with this system, how the management should use the system to maximize the work efficiency of the sales force, and to put in place a process to further enhance the capabilities and use of the ASFS. The main reason for HAU was that soon after a very ambitious implementation and utilization of their ASFS in June 2000, utilization problems began to occur. These problems resulted into the fact that hardly any sales people were using the system as of 2002; the project in fact failed. HAU wanted to have more insight as to why the system was not used anymore by their sales people and what steps should be taken to revive its usage. In addition, they wanted to have a closer look at what would be the best way of using the system from a sales management point of view.

These issues resulted into the research goal ‘To gain an insight into the adoption, design, and use of an Automated Sales Force System at Guinness Anchor Berhad and Heineken Australia in order to optimize the usage of an Automated Sales Force System within both organizations’. To achieve this goal, four steps will be taken. Firstly, a theoretical framework will be created that shows how optimal use of an ASFS will be realized.

Secondly, a description of the current situation will be given to describe the current use and problems. These two steps form the input of the third step; a comparative analysis of the adoption, design, and use of an ASFS at both companies. Based on the discovered gaps between the optimal situation and the current situation, the last step is to provide recommendations that will give an answer to the research question: ‘How can the use of an Automated Sales Force System at Guinness Anchor Berhad and Heineken Australia be optimized?’

The main conclusions of the analysis of the adoption, design, and use of the Automated Sales Force System at GAB and HAU can be summarized as follows:

Figure 1, Main conclusions of the comparative analysis

Design

Use

Guinness Anchor Berhad

Australia

The design of the ASFS is mainly focused on the needs of sales management and less on the needs of the sales force.

The current capabilities of the Handheld computer that the sales representatives use in the field does not enable them to act as consultative sales people; a role with performing real selling activities and providing optimal service to customers.

The sales force needs more management input for enhanced utilization of their field tool. This is difficult to achieve since the current capabilities of the ASFS cannot really support sales management. The ASFS needs to be extended with more applications that support sales management in order to enhance the performance of the whole sales organization

Currently, the basic assumptions of sales management are to direct and control their sales force. This reflects the use of their ASFS very much since they use the ASFS mainly to evaluate and control their sales force. The current capabilities of the ASFS offer much more potential for enhanced usage, which will improve the performance of the whole sales organization..

The ASFS is designed from an end-user perspective. The sales force has therefore a great field tool, but the current ASFS has a lack of applications that support sales management in their activities.

Adoption

The adoption of the ASFS is supported by the industry concentration of the Malaysian beer market, the size, complexity and centralised organization of GAB, and the Malaysian culture with high power distance and a collectivistic mind. Optimal use can therefore easier be obtained.

The adoption of the ASFS is not supported by the industry concentration of the Australian beer market and the fact that HAU is a small, decentralized organization with a low complexity that can hardly achieve productivity gains with standardization of parts of the ASFS. In addition, the low power distance and individualistic mind of the Australian culture have a negative influence on the adoption as well and therefore optimal use is more difficult to obtain.

Inducement

Research Goal

Conclusions

(5)

5 Based on these insights and conclusions, recommendations will be given how to optimise the use of the ASFS at both companies. The main recommendations to GAB are:

Extend the functionalities of the Handheld to enhance the performance of the sales force;

Make more use of the available applications that support sales management in order to enhance the performance of the whole sales organization;

Focus more on real selling activities of the sales force, which will improve the information flow for the used database; and

Provide more training and assign champions in every regional sales office.

The main recommendations to HAU are:

Implement more analytical, planning, and reporting tools that can support sales management;

Make more use of the extended capabilities of the Tablet PC that the sales force uses in the field to enhance the performance of the sales force; and

Keep the sales force informed about new applications, and provide extensive training and management support to enhance adoption and usage.

The comparative analysis showed that there are similar and different critical success factors between GAB and HAU for the adoption, design, and use of the ASFS. Therefore, some general overall conclusions regarding adoption, design, and use of ASFSystems can be drawn. The main conclusions are that subsidiaries with small, more educated, and experienced sales forces should involve the full sales force in the design and implementation of the ASFS in order to promote full adoption of the ASFS. Subsidiaries with big, less educated, and an inexperienced sales force will adopt an ASFS more efficiently when they use a pilot group for design and implementation. The cultural dimensions of power distance, uncertainty avoidance, and individualism turned out to have a considerable influence on the adoption of an ASFS. High power distance and high collectivism can expect an easier adoption than their counterparts. The design of the ASFS needs to focus on both end-user and organizational needs, and therefore a multi-functional team for the design of the ASFS needs to be created. This team should involve sales- and marketing management members, sales force people, and IT people to create optimal input.

Recommend- ations HAU Recommend- ations GAB

General Conlcusions

(6)

6 Index

Preface………... 3

Executive summary……….. 4

Chapter 1 Introduction………. 9

1.1 Background Guinness Anchor Berhad Malaysia……… 9

1.2 Background Heineken Australia……….. 9

1.3 Background to this research……… 10

1.4 Summary……….. 11

Chapter 2 Research design………... 12

2.1 Problem definition………. 12

2.1.1 Research Goal……….…… 12

2.1.2 Research Question………... ………... 12

2.1.3 Results of this research……….. … 12

2.2 Conceptual framework……… 13

2.2.1 Sub research questions………... 14

2.3 Methodology………... 15

2.3.1 Research type………. 15

2.3.2 Limitations of this research……… 15

2.3.3 Research methods………... 15

2.4 Explanation of theories used……….. ………. 17

2.5 Further structure of this thesis……… 17

2.6 Summary………. 18

Chapter 3 Theoretical Framework………. 19

3.1 Sales Force Automation……….. 19

3.1.1 Background and developments in Sales Force Automation………... 19

3.1.2 The key characteristics of ASFSystems………...……….. 20

3.2 The adoption of Automated Sales Force Systems……… 23

3.2.1 The adoption of technology by organizations and individual sales people………. 23

3.2.2 Factors influencing the organizational adoption of ASFSystems……….………. 24

3.2.3 Factors influencing the adoption of ASFSystems by individual sales people….…….……….. 25

3.2.4 The influence of culture on the adoption of Information Systems………. 26

3.3 The use of an Automated Sales Force System from a sales force and a sales management perspective. .. 27

3.3.1 The influence of environmental changes on the sales force and sales management………….. 28

3.3.2 The sales management process and roles of sales managers……….. 29

3.3.3 ASFS design and use to provide optimal support to the sales force and sales management... 32

3.4 Summary………. 35

Chapter 4 The current situation regarding the use of an Automated Sales Force System at Guinness Anchor Berhad and Heineken Australia……….. …. 36

4.1 Organizational structure of the sales department at GAB……… ……….. 36

4.2 Strategy of the sales department at GAB and the motives for implementing the Automated Sales Force System………. 38

4.2.1 Sales strategy at GAB……… 39

4.2.2 The reasons and objectives for implementing the ASFS at GAB……….. 40

4.3 The implementation, design, and use of the Automated Sales Force System at GAB……… 40

4.3.1 The implementation of the ASFS at GAB………. 41

4.3.2 The design and use of the ASFS at GAB……….. . 41

4.4 The discovered problem issues at GAB……….. 43

(7)

7 4.5 Organizational structure of the sales department at HAU……….………….. 44

4.6 Strategy of the sales department at HAU and the motives for implementing the Automated Sales Force System……….. 46

4.6.1 Sales strategy at HAU………. …. 46

4.6.2 The reasons and objectives for implementing the ASFS at HAU……… 47

4.7 The implementation, design, and use of the Automated Sales Force System at HAU………. ..48

4.7.1 The implementation of the ASFS at HAU………. 48

4.7.2 The design and use of the ASFS at HAU………... 49

4.8 The discovered problem issues at HAU……….… 50

4.9 Summary………. 52

Chapter 5 The analysis of the adoption, design, and use of the Automated Sales Force System at Guinness Anchor Berhad and Heineken Australia……… 53

5.1 The analysis of the factors that influence the adoption of an Automated Sales Force System………….. 53

5.1.1 Analysis of the factors that influence the organizational adoption of the ASFS at GAB…….. 54

5.1.2 Analysis of the factors that influence the adoption of the ASFS by individual sales people at GAB………. 55

5.1.3 Analysis of the cultural influence on the adoption of the ASFS at GAB………. .. 56

5.1.4 Analysis of the factors that influence the organizational adoption of the ASFS at HAU…….. 56

5.1.5 Analysis of the factors that influence the adoption of the ASFS by individual sales people at HAU……… 57

5.1.6 Analysis of the cultural influence on the adoption of the ASFS at HAU………... 58

5.1.7 Overview of the key commonalities and differences in the adoption of an ASFS between GAB and HAU………... 58

5.2 The analysis of the design and use of the Automated Sales Force System at GAB and HAU……….…. 59

5.2.1 Analysis of the design and use of the ASFS at GAB……….. …... 60

5.2.2 Analysis of the design and use of the ASFS at HAU……… ……. 63

5.2.3 Overview of the key commonalities and differences in the design and use of the ASFS between GAB and HAU………. 65

5.3 Comparative picture of the main conclusions with regard to the analysis of the adoption, design, and use of the Automated Sales Force System at GAB and HAU……….. … … 66

5.4 Summary………. …… 67

Chapter 6 Recommendations……….. …… 68

6.1 Recommendations to GAB……….. 68

6.1.1 Recommendations for technical design……….. …… 68

6.1.2 Recommendations for utilization……….. …. 69

6.1.3 Organizational recommendations………..……….. …... 70

6.2 Recommendations to HAU………. …… 71

6.2.1 Recommendations for technical design……….. 71

6.2.2 Recommendations for utilization………. .. 72

6.2.3 Organizational recommendations………. .. 73

6.3 Summary……… …. 73

Chapter 7 Conclusions……….. …... 74

7.1 Conclusions regarding the content………. …. 74

7.1.1 General conclusions……….. . 74

7.1.2 Practical relevance………. . 75

7.2 Academic conclusions………. …... 76

7.2.1 Theories used………. . 76

7.2.2 Research methods……… ... 76

7.2.3 Scientific contribution………..………. ………. 77

7.2.4 Role of the researcher………. … 77

7.2.5 Suggestions for further research………. … 77

(8)

8 Bibliography……….. …... 78

Appendices……… 80

Appendix I………. …….. 81

Appendix II………. … 85

Appendix III……… ... 87

(9)

9 Chapter 1 Introduction

The research project, of which this thesis is the final result, is a special one. Primarily because it’s conducted in two different companies based in two different countries and two totally different environments. The research about optimizing the use of an Automated Sales Force System was done from mid February 2003 to mid August 2003 during two overseas internships. The first three months were used to research the situation at Guinness Anchor Berhad (GAB) based in Kuala Lumpur, Malaysia. The following three and a half months were used to research the situation at Heineken Australia (HAU) in Sydney. Though GAB and HAU are completely different companies and operate in a different market, with its different cultures and behaviors, there are at least two similarities. First of all they both operate in the Malt Liquor Market, which means that their business is “Beer”.

Secondly, they both belong to the Heineken group. GAB is partly (10.8 %) owned by Heineken NV and Heineken Australia is 100% owned by Heineken NV. Since both companies belong to the Heineken group, both internships could be linked to each other in this thesis.

Paragraph 1.1 and 1.2 will give a general overview of GAB and HAU. Paragraph 1.3 describes the background to this research by explaining why the research was conducted at GAB and HAU. Paragraph 1.4 will provide a small summary of this chapter.

1.1 Background Guinness Anchor Berhad Malaysia

GAB is a publicly listed company on the Malaysian stock exchange and one of the two main breweries in Malaysia. The other brewery, and competitor, is Carlsberg Malaysia (CBMB). GAB evolved in November 1989 from the merger between two brewing giants, Guinness Malaysia Bhd and Malayan Breweries Sdn Bhd. Parent of Malayan Breweries Sdn Bhd is Asian Pacific Breweries (APB). APB’s story started in 1931 as a joint venture between Fraser and Neave Limited (a leading Pan Asian Consumer Group with core expertise and dominant standing in the Food and Beverage, Property and Printing & Publishing industries) and Heineken NV. 37.9% is owned by Fraser and Neave Limited, with Heineken NV holding 42.5% share of equity in the company

¹

. This explains Heineken’s 10.8% ownership in GAB.

GAB’s principal activities are the production, packaging, marketing and distribution of Heineken Beer, Tiger Beer, Anchor Pilsener Beer, Anchor Special Beer, Anchor Ice Beer, Guinness Stout, Lion Stout, Baron’s strong brew, Anglia shandy and Malta. GAB’s turnover in 2002 was RM 701,354 million, €163,086 million, they sold 640.000 HL of Beer, and they have around 650 employees. In 2002 GAB enjoyed a sales increase of 4.6% in a stable market. Since the only competitor is CBMB and the Malaysian MLM market is not growing, the only chance to gain market share is at the cost of the competitor’s share. GAB’s market share as of March 2003 is 48.1%. The growth in sales is in line with GAB’s strategic direction to regain market leadership. GAB tries to achieve this by the following strategic thrusts

²

:

Confidential‘ To grow more value from their brands, improve organizational effectiveness and grow organizational skills and competencies.’

Paragraph 1.3 will explain what the influence is of these strategic thrusts on the research.

1.2 Background Heineken Australia

Carlton United Breweries (CUB) originally distributed Heineken in Australia before Heineken NV created an export office for greater control over its product. HAU started its operations in Australia in September 1999 and they just survived their first critical stage of life.

1Source

:

www.apb.com.sg

2 Source: Key Sales Related Issues GAB, 2003

(10)

10 They used to be part of the Heineken Export Group, together with Heineken offices in Portugal, Brazil, Germany, USA, Curacao, South Africa, Singapore, Hong Kong, China, Japan and Taiwan. The mission of the Heineken Export Group was

³

:

‘ To grow the Heineken brand aggressively and to develop portfolio opportunities in all corners of the world, through a network of beer suppliers and distributors and through excellence in local marketing, sales and distribution operations.’

Being part of the Heineken Export Group, the main business activity for HAU was to do the Marketing, Selling and Distribution of Heineken Beer in Australia while importing the Heineken Beer from breweries in Holland and New Zealand. HAU started its operations with 25 employees in 1999 and sold 49,820 HL of Heineken Beer over the year 2000. As of August 2003, the organization of HAU counted 55 employees and reached an increase in sales of over 80% to 90.059 HL of Heineken Beer in 2002. Sales forecasts in 2004 show numbers of 124.000 HL, an increase of almost 40%. Their turnover increased from A$21.8 million ( €12.8 million) over the year 2000 to A$33.9 million ( €19.95 million) over the year 2002. These numbers make HAU one of the biggest growing subsidiaries of Heineken NV. The market mission of HAU is

⁴

:

Confidential

‘ Build the Heineken brand into a star brand in Australia and profitably trade corporate brand opportunities in the developing non-mainstream segments.’

Recently Heineken NV launched a new program with the object of raising the operating efficiency and performance to a higher level. The intention of this program is that greater efficiency and effectiveness, and a management that works closer to the market, will help Heineken to perform better

⁵

. The program is called

‘Taking Heineken to the next level’ and includes speeding up business processes, creating ‘win / win’ situations in the dealings with customers, measuring performance and costs, and comparing them with both internal and external benchmarks to identify and implement best practices around the world

⁶

. The result of this restructuring was that since July 2003 the Heineken Export Group doesn’t exist anymore and HAU now reports to the new Asia Pacific Regional Office in Singapore. This development changes nothing in structure and the strategic market mission of HAU.

1.3 Background to this research

The main reason for GAB to look into the subject of optimizing the use of their ASFS was the implementation of major structural and process changes in the organization in 2002, especially regarding the sales force.

Confidential

Biggest changes were the reduction of the sales force and the implementation of a Siebel Automated Sales Force System. GAB fully implemented this system in November 2002. The implementation resulted in a considerable change for the working environment of the sales people. They were used to work with paper and pen, but now they got a small so-called Handheld computer at their disposal to capture and transmit information. This small computer became a part of their daily job.

With these changes regarding the structure and processes, GAB wanted to have more insight in the current way of working with this system, how the management should use the system to maximize the work efficiency of the sales force, and to put in place a process to further enhance the capabilities and use of the ASFS.

3 Source: Strategic Plan Heineken Australia, 2003

4 Source: Strategic Plan Heineken Australia, 2003

5 Source: Annual Report Heineken NV, 2002

6 Source: Annual Report Heineken NV, 2002

(11)

11 While also HAU wanted to look into the subject of optimizing the use of their ASFS, the main reason was not completely the same. HAU started the first phase of their ASFS project in June 2000 as a local project, where the Heineken Export Group regarded this project as a key pilot system.

After an (too) ambitious start problems began to occur, which resulted in hardly any sales people using the system as of 2002; the project in fact failed. This created the opportunity at HAU to do research as to why the system became useless in the eyes of the sales people and what steps should be taken to revive its usage. Another issue, like GAB, was to have a closer look at what would be the best way of using the system from a sales management point of view.

1.4 Summary

This first chapter gave an introduction to the research. It described the background of GAB and HAU where the research was conducted, which showed that both companies are a subsidiary of Heineken NV. A background of the research has been given by providing a short outline why GAB and HAU wanted to conduct this research.

This background showed that both organizations were interested to optimize the current use of their ASFS. Since

they were both part of the Heineken group, the research could be conducted as an internship, divided over GAB

and HAU.

(12)

12 Chapter 2 Research Design

The previous chapter provided a general introduction to both companies where this research has been conducted and what the inducement was for the research. This chapter is about how the research is conducted. Paragraph 2.1 will therefore firstly explain the problem definition of this research to show what the goal and final result of this research will be for both companies. A conceptual framework will be provided in paragraph 2.2 to show the way the research will be conducted to fulfill it’s goal. Since the research goal and question can be seen as a problem analysis, an appropriate strategy would be to deduce sub questions from the central formulated research question

⁷

. That’s why sub questions will be formulated based on the research question and the conceptual framework. Paragraph 2.3 will then discuss the methodology of the research to explain the approach of this research. Paragraph 2.4 will provide an explanation of the theories used that will help to fulfill the research goal.

An overview what the following structure of this thesis will be to provide answers to the sub research questions will be provided in paragraph 2.5. This chapter will conclude with a summary of this chapter in paragraph 2.6.

2.1 Problem definition

A problem definition can be divided into the research goal and the research question, which will be provided subsequently. The results of the research will explain what exact output the management of GAB and HAU can expect of this research.

2.1.1 Research Goal

The research goal specifies the relevance of the research. The goal must clarify the meaning of the research and why it is important to do the research

⁸

. It forms the basis for the research question and is important when evaluating the research

⁹

. The goal of this research is:

To gain an insight into the adoption, design, and use of an Automated Sales Force System at Guinness Anchor Berhad and Heineken Australia in order to optimize the usage of an Automated Sales Force System within both organizations.

2.1.2 Research Question

The research question specifies what you want to know

¹⁰

and is based on the research goal. The research question is:

How can the use of an Automated Sales Force System at Guinness Anchor Berhad and Heineken Australia be optimized?

2.1.3 Results of this research

An ASFS plays a crucial role in capturing and transmitting important information for a company, which might improve organizational efficiency and effectiveness.

7 Verschuren, P.J.M., De probleemstelling voor een onderzoek, 7th edition, 1999

8 Baarda, D.B., Goede, M.P.M. de, Basisboek Methoden en Technieken, Praktische handleiding voor het opzetten en uitvoeren van onderzoek, Stenfert Kroese, Groningen, 2nd edition, 1995

(13)

13 But not every company can and might use an ASFS the same way. This research provides recommendations to the management of GAB and HAU how to optimize the use of their ASFS, which will establish more organizational effectiveness. With references to a theoretical framework and the current situation regarding the use of their ASFS, this research will show the management of GAB and HAU what the potential for optimal adoption of the ASFS within their organization is and how an ASFS should be designed and used to support their sales force and sales management. For corporate management it’s important to know how to optimize the use of an ASFS because technology alone can be replicated by any competitor; competitive advantage is derived from how people utilize the system.

GAB is a very big subsidiary of Heineken NV with its own brewery in an Asian culture and market. HAU is a very small subsidiary of Heineken NV with only marketing, selling, and distribution activities operating in an Australian market with its western culture. These very big differences reflect the way an ASFS will be adopted and the way both companies designed and use their ASFS. Therefore, the final conclusions of this research might be of help to Heineken NV when introducing an ASFS in other subsidiaries.

2.2 Conceptual framework

A conceptual framework provides a graphical overview of the mutual coherence of the conceptions of the research

¹¹

. Figure 2-1 shows the conceptual framework of this research.

Figure 2-1, Conceptual framework

Research Methods Description and Analysis Recommendations

Internal documents

Interviews sales organization

In-field observations

Recommendations to optimise the use of the ASFS at GAB and HAU (subq. 4) Current situation regarding

the use of the ASFS at GAB and HAU

(subq. 2)

Comparative analysis of the adoption,

design, and use of the

ASFS at GAB and

HAU (subq. 3) Theoretical Framework

(subq. 1) Adoption Design Use by Sales

Management and Sales Force Theories and

best practices

(14)

14 To visualize the mutual coherence, the conceptual framework is divided into three main parts using arrows to show the exact relationship. The three main parts are the Research Methods, the Description and Analysis, and the Recommendations.

The Research methods within this research are described in the first column. These will be further discussed in paragraph 2.3.3. They will be used as an input for the second part of the framework, the Description and Analysis.

Since the research goals tries to discover how to optimise the use of an ASFS at GAB and HAU by gaining insight into the adoption, design, and use of the ASFS at both companies, an overview of what the optimal situation should be needs to be created. This will be provided by a theoretical framework that describes theoretical assumptions how an ASFS can be adopted, designed, and used to become of optimal use for an organization.

Hereafter, a description of the current situation regarding the use of the ASFS at GAB and HAU will be made.

Both the theoretical framework and the description of the current situation will be the input of the analysis to gain insight how the ASFS is adopted, designed, and used. Goal of this analysis is to discover the gaps between the theoretical framework, the optimal situation, and the current existing situation, and to address the differences in adoption, design, and use between both companies. Based on this analysis, recommendations will be given to optimise the use of the ASFS at GAB and HAU.

The theoretical framework has a two-way direct relationship with the Recommendation part as well to gain input and feedback for recommendations to GAB and HAU.

2.2.1 Sub research questions

The objective of sub research questions is to enable the way to answer the research question step by step

¹²

. Therefore, they are based on the research question and the conceptual framework. The questions 1-3 aim to provide a description and analysis of the theoretical framework, the optimal situation, and the current situation.

Questions 4 and 5 aim to provide recommendations that close the gap between the optimal situation and the existing situation. This will lead to the following sub research questions:

1) What is an Automated Sales Force System and how can it be of optimal use for an organization?

i. What are the history and key characteristics of Automated Sales Force Systems?

ii. What are the factors that influence the adoption of Automated Sales Force Systems in organizations?

iii. How can an Automated Sales Force System be used from a sales force and sales management perspective?

These questions result into a theoretical framework that will show how an Automated Sales Force System can be of optimal use for organizations; it describes the optimal situation. The results of these questions provide an input for the analysis of the adoption, design, and use of the ASFS at GAB and HAU.

2) What is the current situation regarding the use of the Automated Sales Force System at GAB and HAU?

i. How does the sales organization of GAB and HAU look like?

ii. What are the corporate strategy of GAB and HAU and their objectives regarding the Automated Sales Force System?

iii. How is the Automated Sales Force System designed, implemented, and currently used at GAB and HAU?

iv. What are the current problems at GAB and HAU regarding the ASFS and its usage?

These questions aim to provide a description of the current situation at both companies that provides an input for the analysis of the adoption, design, and use of the ASFS at both organizations.

3) Based on the optimal situation as provided in the theoretical framework and the current situation at GAB and HAU, how is the Automated Sales Force System adopted, designed, and used at both organizations?

12 Verschuren, P.J.M., De probleemstelling voor een onderzoek, 7th edition

,

1999

(15)

15 i. How is the Automated Sales Force System adopted at GAB and HAU?

ii. How does the design and use of the Automated Sales Force System support the sales force and sales management at GAB and HAU?

iii. What are the key commonalities and differences in adoption, design, and use between GAB and HAU?

These questions aim to analyze the gap between the optimal situation and the existing situation and will point out the differences between GAB and HAU. The results of this analysis form the basis of the recommendations.

4) Based on the results of the analysis, what are the recommendations to GAB and HAU to obtain optimal use of their Automated Sales Force System?

This question aims to close the gap between the ideal situation and the existing situation at both companies.

2.3 Methodology

Methodology is about the approach of the research

¹³

. This paragraph explains the type of this research, the limitations this research is subject to, and the research methods that have been used to conduct the research.

2.3.1 Research type

This research can be characterized as a policy support type of research. This type of research produces concrete knowledge, which is specified in the research objective, in a specific situation of a certain customer and satisfies a certain part of the total necessity of knowledge

¹⁴

.

In the case of this thesis, it’s not proper to use the words ‘certain customer’, simply because there isn’t a real customer. Instead of a ‘certain customer’ there are two clients. The two clients are GAB and HAU. The concrete knowledge is the recommendations how to optimise the use of an ASFS, based on the description and analysis of the current situation with regard to the ASFS at both companies, and the theoretical framework. This is part of the total necessity of knowledge because it contributes to the fulfilment of the strategic desires at both companies.

2.3.2 Limitations of this research

Limitations of a research show the restrictions of the research results and methods that are chosen to conduct the research

¹⁵

. To demarcate this research the following limitations are set:

The research is done for Guinness Anchor Berhad Malaysia and Heineken Australia;

The first three months of the research will take place at the head office of Guinness Anchor Berhad in Kuala Lumpur, Malaysia. The following three and a half months of the research will take place at the head office of Heineken Australia in Sydney;

A presentation is given to GAB’s Management Executive team at the end of the internship in Kuala Lumpur regarding results so far of the assignment;

The research only focuses on Automated Sales Force Systems and not on other IT-systems; and At the specific request of GAB and HAU, some strategic issues in this thesis may be kept confidential.

2.3.3 Research Methods

The research methods used will have to lead to a collection of data that form the input for second part of the theoretical framework; the description and analysis.

13 Leeuw, A.C.J. de, Bedrijfskundige Methodologie, Management van Onderzoek, Van Gorcum, Assen, 3rd edition, 1996

(16)

16 There are three ways to collect data

¹⁶

:

Studying existing information;

Observations; and

Questionnaires and face-to-face interviews.

The methods of data collection in this research were already mentioned in the conceptual framework in paragraph 2.2, which shows that all of the research methods mentioned here above are used in this research. The input of every method will be discussed now.

Studying existing information

Basically, this is the main research method used for this research. Existing information were the theories and best practices, and internal documents of both companies. Theories and best practices regarding Sales Force Automation, adoption of technology within organizations, Sales Management, and the design and use of ASFSystems have been used to develop a theoretical framework. Many internal documents and reports of the companies were of great value to describe the current situation with regard to the ASFS.

Observations

Observations at both companies have been made during in-field work of the sales force to observe how they performed their daily job and how they used the ASFS. Four full days were spent in the field at GAB and every day was spent with a different sales representative. Six full days were spent in the field at HAU and, like at GAB, every day was spent with a different person of the sales force as well. These observations provided more insights in the current problems and weak points of the ASFS at GAB and HAU. They were also used for the description and analysis of the current situation regarding the real use of the ASFS at GAB and HAU. There will be referred to these observations throughout the thesis.

Questionnaires and interviews

The only interviews that have been conducted were oral interviews. Both face-to-face and over the telephone.

Those interviews were with (sales) managers and people within the sales force to clarify strategic issues, the current problems with the system at both companies, and what their opinion was regarding the opportunities of the system within both organizations. Three semi-structured interviews have been conducted at GAB. 18 structured and one semi-structured interviews have been conducted at HAU. An elaboration of the semi- structured interviews is provided in appendices I and III, and an overview of the questions and main results of the 18 structured interviews at HAU are provided in appendix II.

Cross-case analysis

A cross-case analysis is a research method as well and therefore discussed in this paragraph since this research can be seen as a cross case analysis. Yin (1989) stated that ‘how’ and ‘why’ questions can best be answered by using qualitative methods, while research questions that start with ‘what’ and ‘how many’ are more related to quantitative research. Further, case study research is useful when researchers find little prior literature on which to build their theoretical framework. The situation regarding the ASFS at GAB and HAU can be seen as two different cases, which become very useful since there is not much existing literature about the optimal use of an ASFS. A comparative analysis is made between both companies but recommendations are made for each individual case. Nevertheless, at the end of this thesis some overall conclusions will be given, based on the results of the two cases at GAB and HAU. This can be seen as a cross - case analysis.

There are two approaches to conduct a cross-case analysis; the case-survey approach and the case-comparison approach

¹⁷

. The case-survey approach requires two conditions that cannot always be satisfied. Firstly, isolated facts within particular case studies must be worthy of substantive attention. Secondly, the number of case studies must be large enough to warrant cross-case tabulations.

17 Yin, R.K., The Case Study Crisis: Some Answers, Cornell University, 1981

(17)

17 This research provides only two cases, which is not sufficient enough to do a valuable case-survey approach, and will therefore make use of the case-comparison approach. When doing case-comparison, an adequate explanation for each case singly is constructed. This will be provided in chapter 4.

2.4 Explanation of theories used

The following theories and best practices will be used to enable the analysis of the adoption, design, and use of the ASFS at GAB and HAU, and to justify the recommendations to optimise the use of their ASFS. These theories form the basis of the theoretical framework that will show how organizations can optimise the use of their ASFS.

Firstly, theories will be used about Sales Force Automation to provide more insight into the world called Automated Sales Force Systems. An overview of the history of Sales Force Automation (SFA) and the key features ASFSystems generally can have will be given. Can have, because the key features are not a prerequisite for every ASFS. This depends on the situation and it can be seen as a general overview what kind of extensive features ASFSystems might have nowadays. Scientific articles found in magazines and on the Internet were the main input for the history and key features of ASFSystems. These theories are used to provide the reader a general overview how ASFSystems grew into business, what constitutes general Sales Force Automation, and what kind of extensive features ASFSystems might have nowadays.

Secondly, theories that concern the adoption of ASFSystems will be used. To be able to make optimal use of an ASFS, a prerequisite is the full adoption of an ASFS. If the ASFS is not fully adopted within the organization and by the people who use it, it’s difficult to optimise its usage. Parthasarathy and Sohi (1997) have done extensive research to the adoption of technology by organizations and individual sales people and provide a framework with factors that influence the adoption of technology. First of all, there are factors that influence the organizational adoption of technology. After the adoption and decision of the organization to implement technology, in the case of this thesis an ASFS, the technology must be adopted by individual sales people to enable the individual use. That’s why Parthasarathy and Sohi (1997) also provide factors that influence the adoption by individual sales people. These factors form the input of the analysis of the adoption of the ASFS at GAB and HAU and will create a well-founded impression of the potential for full adoption, and therefore optimal use, of the ASFS at GAB and HAU. Culture influences the adoption of an ASFS as well and in this thesis will referred to theories of Jordan (1993) and Hofstede (1980) regarding national cultures and their influence on technology adoption and use. Some differences in adoption and use between GAB and HAU will be explained by these cultural differences since both organizations operate in two completely different countries.

Finally, theories will be used that provide an insight how an ASFS has to be designed and used to provide optimal support to the sales management and sales force, since they are the main users of the ASFS. Theories about sales force and sales management areas will be discussed to show exactly what needs support by the ASFS to optimise its use. Theories of Ingram et al. (1997) that explain the sales management process and theories of Petersen (1997) that explain the important roles sales managers have to play in the sales management process will be used for this purpose. These two theories will be combined into one model that provides an overview of which roles sales managers play in which part of the sales management process. Hereafter, more theories of Petersen (1997) will be used to describe how the ASFS should be designed and used to provide optimal support to sales force and sales management.

2.5 Further structure of this thesis

This paragraph explains the further structure of this thesis. It provides an overview what could be expected in

each following chapter to answer the sub research questions. Figure 1-1 will explain the relation of the next

chapters.

(18)

18

Figure 2-2, Chapter design of this thesis

Chapter 3 will answer sub question 1 by providing the theoretical framework and explaining the optimal situation when using an ASFS. This chapter provides the input for the analysis of the current use in chapter 5 and will be referred to when providing recommendations how to optimize the use of the ASFS at GAB and HAU in chapter 6.

Chapter 4 gives an answer to sub question 2 and explains the current, existing situation of the use of the ASFS at both companies.

Chapter 5 will answer sub question 3 by providing a comparative analysis of the current use of the ASFS at both companies, based on the theoretical framework as provided in chapter 3 and the current situation as described in chapter 4.

Chapter 6 will answer sub question 4. Recommendations for optimal use of an ASFS will be provided, based on the description and analysis of the situation regarding the ASFS at both companies and the theoretical framework.

Chapter 7 will provide the general conclusions of this research. These conclusions concern the general content of this research and will show the practical relevance of the research .

2.6 Summary

The objective of this research is to gain an insight into the adoption, design, and use of an Automated Sales Force System at GAB and HAU in order to optimize the use of their ASFS. The conceptual framework as provided in figure 2.1 provides an overview of the mutual coherence of the conceptions of this research. Using Research Methods, a Description and Analysis of the theoretical framework and the current situation will be provided to show the gaps between optimal use and current use of the ASFS at both companies.

Recommendations will be given in order to close the gaps between the optimal and current situation. The research is a policy support type of research where a cross-case analysis method will be used. To gain insight into the adoption, design, and use of ASFSystems, theories regarding Sales Force Automation, adoption of technology within organizations, cultural influences on adoption, Sales Management, and design and use of an ASFS will be used to create the theoretical framework. This theoretical framework will be provided in the next chapter.

Chapter 3 Theoretical Framework

Chapter 5

Analysis of adoption, design, and use of the ASFS at GAB and HAU and key commonalities and differences Chapter 4

Description of current situation regarding the use of the ASFS at GAB and HAU

Chapter 7 Conclusions Chapter 6

Recommendations to optimise the use of the ASFS at GAB and HAU

(19)

19 Chapter 3 Theoretical Framework

This chapter will provide an answer to sub question 1. Therefore, a situation needs to be discovered that optimises the use of an ASFS within organizations; the ‘optimal situation’ as discussed in paragraph 2.2. This optimal situation will be described in this chapter as the theoretical framework. This framework will be used for the analysis of the adoption, design, and use of an ASFS at GAB and HAU and to provide well-founded recommendations to optimise its usage.

Paragraph 3.1 provides an introduction how Sales Force Automation (SFA) grew into business and what constitutes current extended ASFSystems. This will provide more insight and understanding why ASFSystems were introduced into sales organizations and what the current possibilities with ASFSystems are in order to obtain optimal use. It will also provide some input for paragraph 3.3.3. Paragraph 3.2 will discuss the factors that influence the adoption of ASFSystems by organizations and sales people. These factors are important to address in order to discover if optimal adoption at GAB and HAU is supported by these factors, since optimal adoption of the ASFS will be of great help to optimise its usage. Also cultural influences on the adoption of technology will therefore be discussed since both companies operate in two completely different countries. Paragraph 3.3 will explain what areas of sales management and sales force can be supported by an ASFS since they are the main users of the ASFS. The critical skills of sales representatives will be discussed and a model will be created of the important roles sales managers play nowadays to enhance the performance of their organization. This will provide the basis as to how an ASFS can be designed and used to enhance the performance of the sales organization and its management, and which technology needs will have to be embedded into the ASFS to achieve this. Paragraph 3.4 will provide a summary of this chapter.

3.1 Sales Force Automation

This paragraph will be twofold. Firstly an overview of the history and developments of SFA will be given. Based on this, secondly the main characteristics of the current ASFSystems will be provided.

3.1.1 Background and developments in Sales Force Automation

It’s most interesting to note that the sales and marketing departments had been the last in line to be given computer support. At the same time the pay off in terms of a company’s bottom line had never been greater.

What was the reason for this potential and where did it all begin?

Sales Force Automation (SFA) is a term and a process that began to creep into business in the late 70’s.

Technology started to appear that had the potential to reduce the administrative burden associated with managing the sales force. One of the main problems that caused the need for an ASFS is that many sales representatives didn’t have adequate access to crucial corporate information that can mean the difference between making or breaking a deal

¹⁸

. More and more companies faced a rapidly rise in the expense of keeping a sales representative in the field calling on customers and an even bigger frustration was that companies began to realize that 60% of a sales representative’s day was spent traveling, waiting for appointments, processing paperwork and attending meetings; all non-selling activities

¹⁹

. This resulted into the fact that Sales and Marketing managers came under increasing pressure to develop techniques to improve the productivity of the field sales force. Developments in portable computer technology hold the promise of contributing to that goal. The opinion rose that computers could help to free sales professionals from their administrative tasks, allowing more time for selling each day while providing timely, accurate and complete sales feedback for management.

The first steps in SFA were quit simple, using desktop based applications to help with administrative tasks, including word processing and creating spreadsheets. The first generation of ASFSystems was in fact no more than data scraping and a tool to help managers manage the sales force. They meant little value to the sales force

18 Dash, J, Arm your road warriors, Software Magazine, Vol. 17 issue 9, p.59-63, 1997

19 Wedell, A. And Hempeck, D. Sales force Automation – Here and Now, Journal of Personal Selling & Sales Management, Vol.7 p.11-16, 1987

(20)

20 itself

²⁰

. The possibilities extended with the addition of database capabilities. These newer systems were designed not only to help the sales managers but also to support the sales representatives with such activities as contact / account management. This enabled to track contact names and numbers and where a contact is in the selling cycle, both on standalone computers and within a networked environment.

It was not until the mid-90’s that a new generation of ASFSystems came into place. Main reason for this step forward was the Internet and improved portable technology. These systems placed less emphasis on automating the sales process and more on informing the sales representative. The tools supported the expanded role of the sales representative as sales project coordinator by bringing together all corporate functions and their information systems to satisfy the needs of the customer. Improved portable technology like the laptop computer enabled companies to have enhanced networking capabilities through the Internet and database synchronisation.

This was making remote selling more efficient, because it allowed immediate access to up-to-the-minute product information. The ASFSystems eliminated the need for sales representatives to, for example, contact sales administration for lead generation and updates, ask marketing for sales literature, meet with engineers for product configuration, visit the order desk for quotes, check with manufacturing about inventory available, and confirm shipment dates with distribution. Because of the elimination of such activities, these ASFSystems were the first that significantly shortened the sales process in many companies. More and more companies started to see the dramatic gains using SFA and in 1996 the SFA business became a $2,5 billion global industry that grew annually with 40%. Despite the market growth and the financial resources being thrown into SFA, studies around 1996 revealed that about 60% of corporate attempts to automate sales processes had not been successful.

While several factors likely contributed to these failures, some ASFS software developers speculated that a primary reason so many projects failed was that ASFS software tools were sold as standalone systems, unconnected to enterprise transaction or customer support systems.

In response to these failures, companies are recently turning to packaged ASFS tools to make their sales and marketing processes more efficient and to put more information in the hands of mobile users. The emerging technology in remote access systems has further developed the versatility of ASFS applications in recent years and this new technology has greatly increased the viability of broad, integrated ASFS applications in industries with mobile sales forces, like the beer industry. Today’s sales people are capable of more than only sell a lot and for them to do their job well they need the most current information on products, customers, prices and competitors while away from the office. ASFSystems can help them with that.

The future shows a new mix next-generation ‘always on’ mobile network with connections that enable sales representatives to be continually ‘online’ between their mobile computer devices and the head office. But at the moment, the costs to be continually online don’t offset the benefits it creates and as long those costs don’t decrease, there won’t be many organizations that will implement such a system.

3.1.2 The key characteristics of ASFSystems

The previous paragraph showed the way SFA grew into businesses, but did not exactly show what ASFSystems are and should include in order operating well. ASFSystems are technically defined as ‘electronic software based devices that enable field personnel and companies to keep detailed records of their dealings with customers at all stages of the sales cycle, from initial contacts through contracts’

²¹

. Beyond this general definition there is little agreement as to what constitutes Sales Force Automation. First of all, the use of this term was sometimes quit confusing. Use of technology does not literally ‘automate’ the sales force; it can, however, automate portions of processes, and it definitely forces discipline in handling transactions and data.

Unfortunately, the term ‘automation’ has been equated to automatic or easy results by some of the early adopters, and this has led to organizations’ failure

²²

.

SFA use can cover a complete and integrated spectrum of activities. At one end of the spectrum, some firms claim SFA status with the simple substitution of paper day timers with electronic equivalents. At the other end of the spectrum can be found ASFSystems that integrate with corporate information systems and facilitate the flow of information across sales and related functions such as marketing and customer service.

20 Wilson, B., Computer Finance, p14, 2002

21 Riggins, Sales Force Automation, 2000

22 Petersen, G.S., High Impact Sales Force Automation – A Strategic Perspective, St.Lucie Press, Boca Raton, 1997

(21)

21 These advanced systems rely on computer-telephony integration to allow sales representatives to enter orders electronically, create their own presentations and correspondence, communicate via e-mail, and do their own pricing. In order for a sales force to really talk about SFA, the sales people must be able to remotely communicate with a centralized system that is constantly being updated with current information on a variety of attributes that are of interest to the sales person

²³

. That’s why this thesis will cover the broadest interpretation of the above spectrum.

The promise of the latest ASFSystems is that they will reduce time spent in meetings, traveling, and waiting for information, thus giving sales representatives more time to spend with prospects and customers. In addition to adding to the quantity of available selling time, ASFSystems are designed to improve the quality of information the sales representatives have for each customer or prospect, which often results in improved and more in-depth customer relationships, because it enables users to more effectively acquire new customers and to service and expand relationships with existing customers. From a sales manager’s point of view, effective ASFSystems provide them the information and communication systems they require in their role. This will be further discussed in paragraph 3.3.

Wedell and Hempeck (1987) created an interesting figure that showed what comprehensive SFA should include many years ago. The next figure is based on that, but updated with regard to the current ASFSystems.

Figure 3-1, The key characteristics of a comprehensive ASFS

The ‘Hardware circle’ contains:

Cellular phones and Portable computers for creating productive time from often wasted drive-time back to the headquarters;

Management Support to encourage consistent and complete usage of productivity tools;

23 Parthasarathy, M., Sohi, R.S., Sales Force Automation and the adoptions of technological innovations by sales people: theory and implications, Journal of Business & Industrial Marketing, Vol. 12, p.196-208, 1997

Network

Product configuration system Internet

communications Word Processing

and spreadsheets

Proposal - Generation Systems Accurate and Timely

Reporting

Modem

Training

Remote Access to Mainframe Computers

Order Management Systems

Cellular Phones

Portable Computers

Management Support Time

Management

Shorter Order and selling Cycles

Increased Productivity

SFA

Improved Customer Relations

Information Accessibility

Opportunity Management Systems

Online Marketing Encyclopedias

HARDWARE

APPLICATIONS

BENEFITS

(22)

22 Adequate Training to overcome ‘computer phobia’ and to teach new skills of sales efficiency;

A Modem to enable access to centralized databases by remote computers; and

A Network to be able to share data and communication. A networked configuration is a powerful model that can reduce cycle times, leverage effort across the organization, and release sales representatives from support functions, thereby making them more responsive to the customer. The following items identify some of these key features when working in a networked environment

²⁴

:

• Data is fresh: Depending on the communication medium, data can be as current as the moment;

• The quality of data is improved: In addition to error detection protocol associated with data transmission itself, applications often assist the salesperson in the creation of accurate and complete data; and

• Data availability is improved: The network provides ready access to accurate and relevant data regarding reference data or shipping dates and product availability for example. Data is true for the field, and it’s true for staff and management functions. From a sales perspective, this means not being ambushed by a buyer regarding a late shipment or being able to answer questions immediately vs. follow-up; the difference can mean incremental sales.

The computer software used by the sales force, sales management, and other people ‘linked’ to the system, is referred to as applications

²⁵

. An application is a unique and complete set of software that has a specific purpose within the system. While there are very much applications an ASFS can contain, only the main ones will be addressed here because most other applications are a smaller part of these ones. The ‘Applications circle’

contains:

Remote access with portable computers to branch office or company headquarters computer systems for up-to-the-minute information in order status, price and availability, and competitive data to answer customers’ questions on the spot. This access goes through the Network systems as discussed earlier in this paragraph;

Time management software to plan activities and automatically update call reports;

Word processing and spreadsheet software for customizing sales letters and automating call reports, preparing budget quotes and proposals, and developing sales forecasts;

Internet communication like e-mail for internal communications, eliminating phone-tag with hard-to- reach people and storing phone-in messages from customers. By providing e-mail, less communication is required between staff and sales what reduces communication costs;

Opportunity management systems that track sales prospects and allow sales representatives to organize and track all information around an opportunity in order to convert leads into sales. These systems go beyond mere contact management by tracking and recording the entire history of an opportunity or account, allowing marketing and sales to identify important trends

²⁶

;

Online Marketing Encyclopaedias that electronically distribute and consolidate up-to-date product information, competitive information, sales literature, and sales tools;

Product configuration systems give sales representatives the ability to electronically assemble uniquely tailored products and services to meet the specific requirements of each customer. These systems, which also develop pricing, financing, and warranty options, move the information required to configure solutions from inside the organization to the point of sale;

Proposal generation systems will generate an electronic or paper proposal based on customer specifications; and

Order management systems streamline and manage the sales-order-entry process. Some of the newer systems being developed even allow salespeople to guarantee order dates based on real-time commitment of supply-chain resources

²⁷

.

When used correctly, the use of the hardware and software applications lead to shorter order cycles, increased productivity, information accessibility, accurate and timely reporting, and improved customer relations; the

‘Benefits circle’.

26 Stein,T., Foley, J., Software for the hard sell, InformationWeek, p.18-20, 1998

27 Caudron, S. Sales Force Automation comes of age, Industry Week, Vol. 245, issue 10, p.146-152, 1996