Appendixes
APPENDIX I – RESEARCH PROPOSAL...55
APPENDIX II – RESEARCH SCHEME FINAL THESIS ...56
APPENDIX III – VENDORS OF PRODUCT CONFIGURATORS ...57
APPENDIX IV - A SHORT INTRODUCTION INTO THE SALES FUNNEL...58
APPENDIX V - SALES ACTIVITIES...60
APPENDIX VI – METHODOLOGY SEKARAN...61
APPENDIX VII – ORGANIZATION SELECTION ...62
APPENDIX VIII – INTERVIEW QUESTION (CHECKLIST)...68
APPENDIX IX – POSTER GENERIC SALES PROCESS ...70
APPENDIX X – THE INTERVIEW REPORTS ...71
APPENDIX XI – DATA PROCESSING // PART ONE ...196
APPENDIX XII – DATA PROCESSING // PART TWO ...199
APPENDIX XIII – DATA PROCESSING // PART THREE...202
Appendix I – Research proposal
Wie?
Afstudeerder André Craens (06 480 765 11)
Afstudeerbegeleider Prof. Dr. Ir. J.C. Wortmann (050 3633864) Contact persoon Sofon Paul Kimmel (040 2677 199)
Waar?
Sofon B.V. is gespecialiseerd in verkoopondersteunende software. Hierbij richt Sofon zich op bedrijfstakken waar klant specifieke verkooporders worden gehanteerd. In deze bedrijfstakken wordt er vaak unieke offertes gemaakt voor klanten. De Sofon Guided Selling software ondersteund dit soort offerte- en verkoop processen en kan eenvoudig inspelen op de laatste marktontwikkelingen. Daarnaast kan deze software geïntegreerd worden met huidige ERP of CRM systemen.
Sofon B.V.
Science Park Eindhoven Ekkersrijt 5214
5692 EG Son
http://www.sofon.com
Wat?
Sofon B.V. wil graag haar klanten optimaal van dienst zijn. Het afstudeerproject heeft de volgende hoofdvraag: welke problematiek t.o.v. verkoopondersteunde software oplossingen spelen er bij verkoop ondersteunde processen binnen eerder genoemde bedrijfstakken?
Bevindingen en uitkomsten hiervan zullen resulteren in een ontwikkelstrategie voor nieuwe software modelus. Hierbij wordt gedacht aan bijvoorbeeld een documentmanagement systeem of factureringssysteem.
Onderzoek zal gedeeltelijk plaats vinden bij verschillende praktijksituaties uit eerder genoemde bedrijfstakken. Verder zal wetenschappelijke literatuur ingezet worden om bovengenoemde hoofdvraag te beantwoorden.
Wanneer?
Het project start op maandag 24 oktober en heeft een planning tot en met vrijdag 10 februari.
Hiermee heeft het project een duur van in totaal 16 weken.
Appendix II – Research scheme final thesis
A.B. Craens Scheme Final Thesis @ Sofon v6 / Sat 28 January 2006
Week: Date: Action: Details:
1 42 Mon 24
Oct.
Introduction / Start up Thu. 28 Oct working @ Groningen
2 44 Mon 31
Oct.
Problem Definition Wed. 2 Nov 11:00 Wortmann @ WSN 922,
Groningen
3 45 Mon 7
Nov.
Theoretical Framework + Research Design
Mon. 7 Nov working @ Groningen // Fri 11th
| 10:00 @ Haffmans, Venlo
4 46 Mon 14
Nov.
Calling organizations Fri 18th Nov: 13:00 - 13:15 Call Wortmann
@ 0503633864
5 47 Mon 21
Nov.
Calling organizations Mon. 21 Nov working @ Groningen // Fri 25th Nov 14:00 - 15:00 Wortmann @ Sofon
6 48 Mon 28
Nov.
Data Collection (company visits) I
7 49 Mon 5
Dec.
Data Collection II
8 50 Mon 12
Dec.
Data Collection III 8:45 Wortmann (phone conversation)
9 51 Mon 19
Dec.
Data Collection IV + Data Analysis and Interpretation
Wortmann: On Thursday morning phone conversation
10 52 Tue 27
Dec.
Induction + Report writing I Wortmann: on Friday the 30th of December draft v1 by e-mail
11 1 Mon 2
Jan.
Report writing II Wortmann: on Friday the 6th of January draft
v2 by e-mail
12 2 Mon 9
Jan.
Report writing III Wortmann: on Friday the 13th draft v3 by e-
13 3 Mon 16
Jan.
Report writing IV Wortmann: on Friday the 20th final draft by
14 4 Mon 23
Jan.
Finish / Final version Report Wortmann: on Friday the 27th final version by e-mail
15 5 Mon 30
Jan.
At the latest at Monday the 30th of January Final Meeting
Monday 12:00 hardcopy report // Tuesday 11:00 final meeting.
16 6 Mon 6
Feb.
Certificate granting BDK is at Monday 27-02-06!
Personal:
2 March Departure to Gaithersburg (U.S.)
Appendix III – Vendors of product configurators
A not complete list of companies, which are manufacturing software for product configuration, can be found below. It should be taken into account that Sofon’s software is broader.
- diCarta, Model N and Nextance - http://www.dicarta.com/
- Pricing: Metreo, Vendavo and Zilliant - http://www.tacton.com/ppc.html - http://www.camos.com/
- http://www.bigmachines.com/index.htm - http://www.kdcalc.com/index.htm - http://www.firepond.com/
o Firepond: SalesPerformer Configurator the industry-leading sales configuration engine for solving complex challenges in multiple sales channels.
- http://www.selectica.com/
- http://www.trilogy.com/index.html
- http://produktkonfigurator.idraft.de/en/index.htm - http://www.technicon.com/
- http://www.softtechnz.com/productsSaturn.php - http://www.quantara.com/company/welcome.html - http://www.configura.se/
- http://www.bluemartini.com/index.jsp
- http://www.access-commerce.com/html/_2_.php - http://www.cincom.com/global/eng/solutions/marketing/
- http://www.configsc.com/softwareProducts/csQuote.php - http://www.configureone.com/
- http://www.ilog.com/products/configurator/
- http://www.chrome.com/maing2/index.asp - http://www.pivotal.com/products/sales.asp - http://www.comergent.com/products/index.cfm
- http://www.siebel.com/sales-force-automation/software-solutions.shtm - http://www.ssaglobal.com/solutions/crm/sales.aspx
- http://www.i2.com/solutionsbyindustry/sixone/automotive/indCOFOrderConfiguration.
cfm
- http://www.visibility.com/erp_3_cfg.html - http://www.wrighttools.com/einteract.asp - …and many more!
Appendix IV - A short introduction into the Sales Funnel
A generic sales process consists of several stages. Namely:
- Suspect; this are all people who match with a market segment which the sales process is aiming at.
- Prospect; this group has the same characteristics as the suspects, except contact is made. For example an address brochure is posted. A prospect is also called a lead.
- Qualifying; in the qualifying stage the customer show interest.
- Proposal; in this stage the sales process makes an offer to the customer. This is also called a product proposal, bid and quotation. In this document the latter will be used consistent.
- Decision. The key person(s) who decides to buy or not is called the decision- making unit (DMU).
- Closing: This is the final stage. Frequently a contract is signed to close the deal. A transaction is made. What the customer want is now called an order.
From here the order will be fulfilled by manufacturing or operations, followed
by delivery and billing the order.
Figure 1: A schematic sales process (source: http://www.eisenfelt.com)
During all stages the number of people (or organizations) who are willing to buy diminish. Visualizing this phenomenon is called sales tunnel or sales funnel.
1See also figure 1. In this figure is also described how the several sales process stages can be grouped in sub processes. These are;
1. Account Qualification 2. Opportunity Qualification 3. Opportunity Planning
1 http://en.wikipedia.org/wiki/Sales_tunnel
Prospect
Suspect
QualifyingProposal Decision Closing
3). Opportunity Planning
2). Opportunity Qualification 1). Account Qualification
Appendix V - Sales Activities
It is useful to know which activities the sales process contains to obtain a detailed view of a sales process. A job description of a salesperson defines several activities.
Harmon gives the following list of the selling (1-2) and overhead activities (3–6) in Business Process Change:
24. Customer-related activities
a. Prepare account-related paperwork b. Prepare cross-selling proposals c. Make maintenance calls
d. Maintain customer contact by phone or email 5. Prospect-related activities
a. Identify new prospects
b. Contact and qualify new prospects c. Makes sales calls
d. Develop proposals
e. Maintain prospect contact by phone or email 6. Planning and coordinating activities
a. Time and territory planning b. Prioritizing accounts c. Key account strategizing 7. Organizational activities
a. Meeting with managers b. Attending sales meetings
c. Accounting for time and expenses d. Preparing special reports
8. Product knowledge
a. Keeping current on new products
b. Keeping current on competitive products c. Maintaining contracts with in-house specialists 9. Self-development and motivation
a. Keeping current on general business trends
b. Keeping current on general selling and marketing trends and practices c. Arranging a personal schedule of contingencies
Appendix VI – Methodology Sekaran
(Source: Research Methods for Business, A skill building approach, Uma Sekaran,
John Wiley & Sons Inc., 2003)
Appendix VII – Organization selection
DVBI Branche 100-199 200-
499 >500 Totaal
Industrie 0 0 114 114
Productie en distributie van en handel in elektriciteit, aardgas en warm
water x x 37 37
Bouwnijverheid x x 7 7
Reparatie van consumentenartikelen en handel 0 35 9 44
Vervoer opslag en communicatie x x 33 33
Financiële instellingen x x 46 46
Verhuur van en handel in onroerend goed verhuur van roerende
goederen en zakelijke dienstverlening 0 0 129 129
Totaal 0 35 375 410
Query one:
Bedrijfsgrootte, Werknemersklasse: 500 of meer werknemers 151___ Slachterijen en vleesverwerking
152___ Visverwerking
153___ Groente- en fruitverwerking
154___ Vervaardiging van plantaardige en dierlijke oli n en vetten 155___ Vervaardiging van zuivelproducten
156___ Vervaardiging van meel 157___ Vervaardiging van diervoeder
158___ Vervaardiging van overige voedingsmiddelen 159___ Vervaardiging van dranken
160001 Vervaardiging van sigaren 160002 Vervaardiging van sigaretten 160003 Overige verwerking van tabak Results in17 organizations
Query two:
Bedrijfsgrootte, Werknemersklasse: 500 of meer werknemers 211___ Vervaardiging van pulp, papier en karton
212___ Vervaardiging van papier- en kartonwaren 221___ Uitgeverijen
222___ Drukkerijen en aanverwante activiteiten
231___ Vervaardiging van cokesovenproducten 232___ Aardolieverwerking
233___ Bewerking van splijt- en kweekstoffen 241___ Vervaardiging van basischemicali n 242___ Vervaardiging van landbouwchemicali n
243___ Vervaardiging van verf, lak, vernis, inkt en mastiek 244___ Vervaardiging van farmaceutische producten
245___ Vervaardiging van zeep-, was-, reinigings- en onderhoudsmiddelen, parfums en cosmetica
246___ Vervaardiging van overige chemische producten 247___ Vervaardiging van synthetische en kunstmatige vezels 251___ Vervaardiging van producten van rubber
252___ Vervaardiging van producten van kunststof 261___ Vervaardiging van glas en glaswerk
262___ Vervaardiging van keramische producten (geen producten voor de bouw) 263___ Vervaardiging van keramische tegels en plavuizen
264___ Vervaardiging van keramische producten voor de bouw (geen tegels en plavuizen)
265___ Vervaardiging van cement, kalk en gips
266___ Vervaardiging van producten van beton, cement en gips 267___ Natuursteenbewerking
268___ Vervaardiging van overige niet-metaalhoudende minerale producten Results in 53 organizations
Query three:
Bedrijfsgrootte, Werknemersklasse: 500 of meer werknemers
28____ Vervaardiging van producten van metaal (geen machines en transportmiddelen)
29____ Vervaardiging van machines en apparaten (inclusief reparatie en/of revisie) 30____ Vervaardiging van kantoormachines en computers
31____ Vervaardiging van overige elektrische machines, apparaten en benodigdheden 32____ Vervaardiging van audio-, video- en telecommunicatie-apparaten en - benodigdheden
33____ Vervaardiging van medische apparaten en instrumenten, orthopedische artikelen, precisie- en optische instrumenten en uurwerken
34____ Vervaardiging van auto s, aanhangwagens en opleggers
35____ Vervaardiging van transportmiddelen (geen auto s, aanhangwagens en opleggers)
36____ Vervaardiging van meubels en van overige goederen n.e.g.
37____ Voorbereiding tot recycling
Results in 44 organizations
Query four:
Bedrijfsgrootte, Werknemersklasse:
100 tot en met 199 werknemers 200 tot en met 499 werknemers 500 of meer werknemers Branche, DVBI branche:
40004_ Exploitatie van transportnetten voor elektriciteit, aardgas en warm water 40005_ Handel in en distributie van elektriciteit, aardgas en warm water
Result is 37 organizations
Query five:
Bedrijfsgrootte, Werknemersklasse:
100 tot en met 199 werknemers 200 tot en met 499 werknemers 500 of meer werknemers
Branche, DVBI branche: 4550__ Verhuur van bouw- en sloopmachines met bedienend personeel
Results in 7 organizations
Query six:
Branch, DVBI branche:
5181__ Groothandel in gereedschapswerktuigen 5182__ Groothandel in machines voor de bouw
5183__ Groothandel in machines voor de productie van textiel; naai- en breimachines 5184__ Groothandel in computers, randapparaten en software
51851_ Groothandel in kantoormachines 51852_ Groothandel in kantoormeubels
5186__ Groothandel in elektromotoren, elektrotechnische en elektronische instrumenten, schakelkasten en ander installatiemateriaal
51871_ Groothandel in machines voor de grafische industrie
51872_ Groothandel in machines voor de productie van voedings- en genotmiddelen (geen verpakkingsmachines)
51873_ Groothandel in intern transportmaterieel
51874_ Groothandel in machines en apparaten voor de warmte-, koel- en vriestechniek
51875_ Groothandel in verbrandingsmotoren, pompen en compressoren 51876_ Groothandel in appendages, technische toebehoren e.d.
51877_ Groothandel in meet- en regelapparaten
51878_ Groothandel in overige machines en apparaten voor industrie en handel 5188__ Groothandel in landbouwmachines, -werktuigen en –tractoren
Bedrijfsgrootte, Werknemersklasse:
200 tot en met 499 werknemers 500 of meer werknemers Results in 44 organizations
Query seven:
Bedrijfsgrootte, Werknemersklasse:
100 tot en met 199 werknemers 200 tot en met 499 werknemers 500 of meer werknemers Branche, DVBI branche:
642001 Aanbieders van (netwerken voor) vaste en/of mobiele telefonie (incl. data) 642002 Distributie van radio- en televisiesignalen
642003 Carrier (pre-)select aanbieders 642009 Telecommunicatiebedrijven n.e.g.
643001 Internet service provider (isp) 643002 Application service provider (asp) 643003 Webdesigners / presence providers 643004 Webwinkels / veilingsites op internet 643005 Internetcafe / cybercafe
643006 Exploitatie van zoekmachines, startpagina's, informatieve websites e.d.
643009 Internetbedrijven n.e.g.
Result in 33 organizations
Query eight:
Bedrijfsgrootte, Werknemersklasse:
100 tot en met 199 werknemers 200 tot en met 499 werknemers 500 of meer werknemers Branche, DVBI branche:
652211 Hoofdkantoren hypotheekbanken
652212 Kantoren hypotheekbanken (geen hoofdkantoren) 652213 Bouwfondsen
652221 Volkskredietbanken
652222 Pandhuizen
652223 Leasemaatschappijen (van personenauto's, overige transportmiddelen en andere goederen)
652224 Overige consumptief kredietinstellingen 652225 Commerciele financieringsmaatschappijen 65223_ Participatiemaatschappijen
65224_ Wisselmakelaars, banken voor ontwikkelingslanden, kredietverlening n.e.g.
65231_ Beleggingsinstellingen in financiele activa 65232_ Beleggingsinstellingen in vaste activa
65233_ Beleggingsinstellingen met beperkte toetreding 65234_ Financiele holdings
66011_ Levensverzekeringen 66012_ Naturaverzekeringen 66013_ Spaarkassen
66021_ Bedrijfspensioenfondsen
66022_ Ondernemingspensioenfondsen en -spaarfondsen 66023_ Beroepspensioenfondsen
66024_ Overige pensioenfondsen 6603__ Schadeverzekeringen 67201_ Verzekeringsbeurzen 67202_ Assurantietussenpersonen
67203_ Actuariele en pensioenadviesbureaus; beheer en administratie van pensioenvermogens
67204_ Waarborgfondsen
672051 Expertise en taxatie voor het verzekeringswezen
672052 Activiteiten voor of verwant aan het verzekeringswezen en pensioenfondsen n.e.g.
Result in 46 organizations
Query nine:
Bedrijfsgrootte, Werknemersklasse: 500 of meer werknemers Branche, DVBI branche:
711___ Verhuur van personenauto s
712___ Verhuur van transportmiddelen (geen personenauto s) 713___ Verhuur van machines en werktuigen
714___ Verhuur van overige roerende goederen 721___ Hardware consultancy
722___ Ontwikkelen, produceren en uitgeven van software; software consultancy 723___ Computercentra, data entry
724___ Exploitatie avan databanken
725___ Onderhoud en reparatie van computers en kantoormachines
726___ Netwerkbeheer, computerbeveiliging, automatiseringsdiensten n.e.g.
741___ Rechtskundige dienstverlening, accountants, boekhoudbureaus,
belastingconsulenten, markt- en opinie-onderzoekbureaus, economische
adviesbureaus en holdings
742___ Architecten-, ingenieurs- en overige technische ontwerp-, teken- en adviesbureaus
743___ Keuring en controle
744___ Reclame- en Direct Marketingbureaus e.d.
745___ Uitzendbureaus, uitleenbedrijven, arbeidsbemiddeling, testen, werven en selecteren van personeel
746___ Beveiliging en opsporing
747___ Reiniging van gebouwen en transportmiddelen
748___ Fotografie, pakken en sorteren in loon, secretariaats- en vertaalwerk, zakelijke dienstverlening n.e.g.
Results in 129 organizations
Appendix VIII – Interview question (checklist)
Revised version
Introduce research objective and provide overview of the interview.
• University of Groningen & Sofon and Software Development for Customer Drives Sales Process
• Focus at the communication between company and customer from quote till order
• All cooperating organizations stay anonymous.
• Are there any questions?
Interview Questions
Numbers are mandatory and letters are optional
Focus
1. What kinds of products are sold?
2. Are there different sales processes?
a. Do you know the final state of the workflow?
Typical Sales Process
3. What happens if a prospect requests a quote?
a. What kinds of departments or actors are involved?
b. Which activities are performed (manual/automated)?
c. What are the run times of making the quote?
d. What are the run times from request till delivery of the quote?
e. Which amount of work time costs one quote (min,max, average)?
f. Are there authorizations besides above a certain value?
g. What will happen if a quote will be changed?
h. Which percentage of the quotes goes wrong?
i. What are the consequences?
i. Are standard documents or templates used?
j. Are documents circulated or copied?
i. How much time does this save?
4. What will happen if a quote is accepted (order confirmation)?
a. See above but replace the word quote for order.
5. What are problem areas or bottlenecks in the sales process?
a. Where is most knowledge, which is complex through variety, spotted?
6. Can you give me a list of all used information systems?
a. Could you give me the advantages and disadvantages of these systems?
Amounts:
7. Which number of quotes requests is received in a month/year?
a. Which number of quotes is processed in a month/year?
8. Which number of orders is received in a month/year?
a. Which number of quotes requests finalize in an order?
9. What do you like to improve, concerning the sales process?
10. Which information is missing in the sales process?
11. Do you have wishes or other feedback concerning sales processes and ICT?
12. Do you have questions or additional input?
Closing:
• Is it possible to e-mail or call for additional questions?
• Promise results of research by e-mail
• Thank you for your time and your input for this research project.
Appendix IX – Poster Generic Sales Process
Appendix X – The Interview Reports
ORG1...72
ORG2...76
ORG3...83
ORG4...89
ORG5...95
ORG6...99
ORG6...100
ORG7...104
ORG8...109
ORG9...114
ORG10...118
ORG11...124
ORG12...128
ORG13...133
ORG14...138
ORG15...143
ORG16...148
ORG17...156
ORG18...161
ORG19...166
ORG20...170
ORG21...176
ORG22...180
ORG23...185
ORG24...189
ORG25...192
ORG1
Branch: Industry Person(s): Market Manager Chemicals Related interviews: ORG5
Interview Date: Friday (morning) 18th of November 2005
Organization and Product Description
ORG1 is an international company and sells several chemicals. These chemicals are the by-products of the production of artificial manure (fertilizers), which is the core business of the mother company. Examples are ammonia, nitric acid and CO2. ORG1 sells around the 20 till 25 of these products in the Benelux.
Acknowledgments None
Quantitative Information
ORG1 makes approximately 150 quotes in a year. Approximately 65% of the quotes finalizes in an order. Quotes can be divided in approximately 50% direct orders and 50% contracts. Furthermore, both groups can be divided in approximately 50% with and 50% without renting equipment.
The external sales department has 10 FTE. These employees do mainly customer visits in The Netherlands and Belgium. The internal sales department counts 4 FTE and the work preparation department has 4 FTE.
Current Software
ORG1 uses the following software:
• All departments use MS Word and MS Excel. MS Excel is used for calculating the sales price. This price is based on the variables like the transport cost, oil and dollar rate. Documents, like price lists, calculations, and quotes, are stored on a central file-server. External sales employees have a laptop and are able to login on the fileserver from external locations.
Documents are stored for at least three years.
• The external sales employees have a customer directory. The software is
called Approach. Besides the customer contact information, existing
equipment and visits are stored in this system. This system is also used to send mailings. Furthermore, the system is easy to use, like the MS Office applications. It can be said that this software is user-friendly.
• ORG1 uses an ERP system of the vendor SAP. The internal sales department only uses this ERP system. This department does the order entry so production can see what the planning will be. Product prices, defined by the mother company, are stored in SAP. These prices can be seen as the purchase price.
The ERP system is seen as complex. It is not easy to get the information and data that is needed.
Description sales process
The sales process has two types of quotes. The first one is for a single order and the second type is for a contract with a period of one or more years. Both types can contain the service of renting product related equipment. For example a special container, which can be used for a certain kind of chemical. Because special activities and documents are needed in this case, the sales process becomes more complex. The basics are the same for both types of sales.
An external sales employee contacts the customer and qualifies the lead first. This means checking if the customer orders the right amount. Thus too small orders are not accepted because ORG1 is producing high quantities. If this is positive the external sales employee checks at production if this product is or will be available. If this is also positive, the customer is visited. Important subject of the conversation are the products of ORG1 as well end product of the customer. Also the safety of the customer’s site is an issue, which is checked by the external sales employee.
The external sales employee makes a quote after the visit. A normal quote costs 30 till 60 minutes. If the quote is for a contract it will cost approximately three hours. Both quote types can be extended with special equipment to store chemicals. Making the quote for this part costs another two hours.
Important part of the quote is the price calculation. The price is based on the dollar rate and the oil price of the Benelux. A standard template (price sheet) in MS Excel is used for this calculation. For contracts a price formula is arranged. The runtime is around one week before the customer receives the quote.
If a customer agrees with the quote, an e-mail or fax with an order is sent to ORG1.
Both parties sign a contract. After this these kinds of customers send normal orders.
Thus, signed contracts also result in orders and are processed in the same way.
Before the new order of new customers is forwarded from the external to the internal sales department a creditworthy check is done. This is an advise from the financial department and has a run time of two days. If this check turns out to be positive the order and billing address is send to the internal sales department by the external sales employee.
For both contracts and orders an order is entered in the ERP system. In case of renting
equipment a special form is delivered to work preparation department. This
department arranges the delivery with suppliers and the customer. The internal sales
department manages the delivery of the ordered products.
The internal sales department can be seen as the spider in the web. Most problems arise at this department. For example, the delivered size of packing is wrong.
Documents
New customers receive the following documents:
• Price information
• Product specification
• Safety data sheet and related information
• Common conditions
For renting equipment manuals are provided. These instructions are product (chemicals) specific. Furthermore, a contract is made.
Internal knowledge about sales process
ORG1 possesses an ISO 9001:2000 certificate. This means all processes, including the sales department, are described. The certificate has been achieved recently.
Issues for improvement
No information is missing (except product prices of competitors) and there are no wishes for process improvement at the moment.
Other interesting issues
ORG1 has an ISO9001: 2000 certificate. This has cost a lot of effort, but since two
years this investment gives a higher efficiency.
ORG2
Branch: Communication Infrastructure Person(s): Director Sales
Related interviews: ORG3, ORG21 and partially ORG20 Interview Date: Monday (morning) 28th of November 2005
Organization Description
ORG2 sells a (very) broad product and services range. The company calls itself an architect for network solutions. ORG2 has solutions for carriers/operators and enterprises. This is including surveillance, data communication solutions, videoconferencing, and so on.
ORG2 is a matrix organization. This has influence on the way the sales process is organized. The sales process is vertically divided in four main segments: Finance, Operations, Government and Industry. As result of this organization design, sales consultants have more knowledge about specific customer solutions. This affects the horizontal rows.
Acknowledgments
ORG2 also serves government organizations. Because a sales process for government organizations (tender trajectory) is fundamentally different, this type of sales is left out of the interview.
Flexibility
ORG2 has two types of quotes and orders. The first type is complex, which is good for approximately 30% of all quotes. The second part is non-complex, which is the other 70% of all quotes. The process of generating complex quotes is maximum flexible. This part of the sales process is as good as 100% customer driven.
The non-complex quote process is a simplification of the complex process. This part of the sales process is selling simple products and services. Quotes are standard or simple to generate documents.
The difference between these two types is described in detail in description of the
sales process and the two diagrams (see Figure 1 and Figure 2).
Quantitative Information
Approximately (2160 = 30% of 600 OR) 960 till 1200 complex quotes in a year. 37%
finalizes in an order. Approximately 5000 non-complex quotes pro year. 80%
finalizes in an order.
The run time for complex quotes is approximately three weeks. One week is possible, but this is the bear minimum and very unusual. The average work time is three weeks with 5 FTE. However, with larger RFP’s this can be a multiple amount of time. For non-complex quotes the run time is mostly four days. A sales consultant is spending approximately four hours on a quote.
External Sales Department has 18 FTE, also called sales executives. This is including management (sales director and sales managers). The internal sales department has 6 FTE. There are 14 (FTE) Sales Consultants. The sales executives sell to the vertical market segments.
Current Software
Besides MS Word and MS Excel ORG2 uses three information systems. Namely;
• Customer Relation Management (CRM) System, called Visual Elk;
• Document Flow Management (DFM) System, called SANT;
• Enterprise Resources Planning (ERP) System, called “… SYS_ORG2 …”
3.
• Visual Basic (VB) for Applications Script in MS Excel
The CRM system is used for both complex and non-complex quotes. From the ERP package a Project identification number (PID) is generated which will be used for every sales trajectory. All documents that are made are stored in the CRM system attached to the PID. This way of working has characteristics of a file server, in other words, documents are stored centrally. Through the trajectory mutations can be made, instead of making (hard) copies of the several documents.
The CRM system is also used as a forecast tool. Furthermore, the CRM system supports e-mail import, but this function is not used.
Disadvantage of the CRM system is that it does not have an automated flow. This means users have to switch from (too) many screens, called tabs. The system misses automatic routing between the used screens. This is costing time and effort.
The DFM system contains a database with all kind of product (or service) possibilities. By checking the right options a MS Word document can be generate with a proper layout. This document is built in such way that it feels naturally for the customer; in other words, the hierarchy is logical to the customer. For example the final document start with a customer description. ORG2 is not satisfied with the DFM system.
The ERP system is mainly developed internally. For the sales department it calculates automatically the amount of resources used for every quote. The ERP System is used
3 This name is altered to guarantee ORG2 identity stays anonymous.
in 14 countries. This has costs enormous effort concerning different languages, laws and tax issues. The ERP system is used for the e-procurement tool is based on SAP and integrated with SYS_ORG2. Integration with suppliers is a complex job.
The fourth system is a program written in Visual Basic for Applications (VBA). It runs in MS Excel and is used for calculating prices, currency corrections (dollar) and profit margins. Besides this it also calculates the transport costs and import tax.
Description sales process
An unique PID number is made in the CRM system at the begin over every sales lead.
ORG2 sales process is in alignment with the customers buying process. This means a pre-track is done before a customer requests a quote. Internally at ORG2 the following steps are made:
Qualify the sales lead (reject if the project will lead to an unprofitable or impossible order).
Define a customer specific strategy for the (sales) opportunity.
Find a project sponsor at the customer organisation. If necessary, find an extra sponsor, mostly this is the DMU (See Appendix IV).
Discuss an evaluation plan. At this moment no documents are made. If both sides are positive the customer makes a quote request.
All documents are stored in the CRM system from start of the quote request. The sales consultant (not sales employee) starts with the quote. Initial the sales consultant manages the documents and steering the involved employees. But in case the sales consultant is to busy with other tasks a bid manager takes the managing part over. The sales consultant and the project manager invent together a solution. An employee of engineering or support gives additional advice to create added value. After this several persons make several documents (see Figure 1). After an average of three weeks the customer receives the quote.
Quote requests for non-complex products and services go directly to the internal sales department (See Figure 2). This request will be stored in the CRM system. With the MS Excel sheet and the VBA program prices and profit margins are calculated.
Furthermore, several documents are generated:
• General Delivery Terms
• Service Contract
• Installation and project management documents
• Order form
Customers receive this quote in two days. ORG2 is building an e-procurement portal
for orders that return often.
Documents
Quotes will be delivered in MS Word format. A complex quote contains a project plan, installation and configuration issues, Service Level Agreement and a legal part.
A non-complex quote contains product (or service) and price. Furthermore, it contains common delivering conditions, a service contract (standard), information about installation and project management and an order form.
Internal knowledge about sales process
ORG2 has deep knowledge about its own sales process. A detailed poster (a3) with all activities and main processes was shown. The customer buy process was also included in this scheme. Furthermore, the scheme contained departments and key- figures at certain sub-processes and activities.
ORG2 has an ISO 9001 certification.
Most important issues for improvement
The first and most important issue for improvement is activity of making follow-up quotes. Because the interface of the DFM system is to complex, advantages of saving rework for follow-up quotes is lost. This issue is also a matter of time and discipline.
The first parameter could be dependent of the second. Because end-users do not see added value of the system, they have not the incentive and discipline of using it. This makes them scheduling this activity to low priority. Because approximately 80% of the quote parts are standard and only the other 20% unique, a significant effort can be saved here.
According the sales director the biggest problem is the resources. This problem can be divided in two parts: Human and knowledge problems. Finding the right people for the job
From a sales perspective, the most important step is qualification: Concrete examples of these problems are bad qualification of sales leads and not finding a power sponsor (or Decision Making Unit).
Information about certain changes in the sales funnel is missing in the management
reports. This has a technical origin and will be changed (or made) soon. Furthermore,
the CRM system should be more sales person friendly. Sales men should see the value
of the system. This is a wish for improvement
Other interesting issues
ORG2 has different people for sales and monitoring SLA. Sales consultants focus on the sales process. Other people monitor customer happiness and wishes. This is also done in the sales process itself.
A BID manager manages the coordination between the several employees and the
resulting documents from their activities.
ORG3
Branch: Communication Infrastructure Person(s): Director Marketing & Business Development
Related interviews: ORG2, ORG21 and partially ORG20
Interview Date: Wednesday (morning) 30th of November 2005
Organization Description
ORG3 can be categorized in the same segment as ORG2. ORG3 provides solutions for all kind of communication networks. Most are build on the IP protocol
4. Examples are several kinds of data and/or voice networks like telecom, mobile and internet infrastructures. ORG3 delivers also satellites networks and fibre through the oceans.
But also parts of the network like the billing system of a telecom network.
Customers are often telecom operators or Internet Service Providers (ISP). Large companies order solutions as IP telephony and internal data networks (LANs).
The national telecom operator is ORG3’s biggest customer. This customer generates around 60% of the total turnover. The solutions ORG3 delivers are mainly capital expenditures (CAPEX) for its customers. Orders are often over the one million Euros.
But orders of several hundreds of millions Euros are not unusual. Average orders are somewhere in the region of ten to one hundred million Euros.
Product Information
ORG3 delivers many different and often relative complex solutions. A few examples;
ORG3 is strong in building ADSL
5networks. These networks cover a certain geographic region and have many so called local loops. Building these kinds of networks means delivering half hardware products and half software and configuration services.
These are just examples of the ORG3’s business. 90% of the turnover is generated by these kinds of solutions. The other 10% is generated by Service Level Agreements (SLA).
4 More info at: http://en.wikipedia.org/wiki/Internet_Protocol (This page was last modified 14:22, 19 December 2005)
5 More info at: http://en.wikipedia.org/wiki/Adsl (This page was last modified 16:24, 22 December 2005)
Acknowledgments
ORG3 is a multinational company. It is very usual to have employees from different countries (this are other subdivisions) in one project. General spoken the Dutch part of the organization has customers in The Netherlands and has own employees on these projects. The focus of the interview was on the Dutch part of ORG3.
Like ORG2, ORG3 also serves government organizations. This tender process is fundamentally different with the normal sales process. For this reason this sales track is left out the interview. 80 to 90% of the total turnover is generated by business to business (B2B) sales.
The interview was focused on the B2B sales. Quotes for small orders were left out.
Flexibility
ORG3 has no clear borders between internal or external sales department. Either there are no clear borders with other departments during the sales process. Until a sales lead is a definitive order, the sales process of ORG3 is maximal flexible. It is an iterative process, which is finished when the customer receives a satisfying proposal. The sales department of ORG3 wishes to be more flexible between the moment of definitive order till delivery, but this is not possible due the ERP system and planning the production of equipment.
Quantitative Information
ORG3 has approximately two big customer (above 50 million Euros order) quotes pro year. Approximately four till five medium customer (approximately 50 million Euros order) quotes pro year. Approximately 50 till 100 relative small customers (less than 50 million Euros order) pro year. Of all quotes around the 50% finalizes in an order.
All employees of the (Dutch) sales department(s) together are good for 50 FTE. But, as mentioned earlier, for projects this can vary because the international cooperation between geographic units.
Current Software
ORG3 uses the following software:
• The full MS Office suite for doing calculations and storing data. The employees are very happy with this software. Only the standardization or support of video objects is very poor, according the interviewed person.
• MS Outlook. This is also a part of the MS Office suite. It can be named apart
because the Dutch employees use this software very intensively. All
appointments that employees make, are stored in Outlook. This makes it very
easy to make appointments for several people. This system works because
every user is very accurate with entering appointments in Outlook. This means
that storing all not available hours in Outlook. Disadvantage is that employees in other geographic units (countries) do not use outlook consistent or they cannot use it because they use Lotus Notes. Therefore this way of using Outlook can only be used in the Netherlands.
• A CRM system of the vendor Siebel. All sales leads and projects are stored in the CRM system. Besides generating data about the sales-funnel it is used to make the planning in overseas production facilities, for example in China. The CRM system provides a good indication of content of the coming orders. In total around the hundred customers are stored in the CRM system.
Biggest disadvantage of the CRM system is the rigid (mandatory) structure of working the system. This bumps up against the (free) mentality of the sales employees. But structured orders (and forecast) are essential for the production department. This issue cannot be easy solved.
Furthermore, ORG3 is willingly to have more essential information about the customer. For example, who is the DMU or what is their installed base? This information should be stored in the CRM system but this investment is structural ignored. This results in a cycle of not using the possibilities of CRM.
First information is not structural stored because it does not give quick wins.
Therefore the information in the CRM system is not up to date and the cycle starts again.
• An ERP system of the vendor SAP. The ERP system is used for order entry.
This data is used for resource planning. For example solving the problem of when and where are which employees needed. This is an issue of the Human Resources (HR) department.
The ERP is a “moloch” for the sales department. The mandatory structure of the ERP system is not in alignment with the processes of the sales department.
For example, the sales department does not yet have a full Bill of Material (BOM) when the order is received. During product design it is possible to add own features like a company logo. This is not supported by the ERP system and costs therefore a lot of effort.
Description sales process
Like ORG2 a quote request is after a relative long initial pre-sales track. The reason for this is that ORG3 does not want to risk the possibility of giving the wrong answer (read solution) to the customer’s question (read demand). ORG3 calls this positioning.
Often this process starts with a non-disclosure letter.
In the beginning a customer has an idea and wants advice about the possibilities. At this moment the account manager creates a new network share at the fileserver of ORG3. The account manager and the solution architect are together the leaders of the bid team. The first is the commercial person and the latter the technical person.
The bid team can contain employees of several departments. Namely some examples:
• Logistics
• Product Design (for example own brand logo at products)
• Project Management
• Integration
• Installation and Commissioning (installs for example internal billing).
• Care: Maintenance and repair (this is the part where 10% of the turnover is generated).
• Legal
• And more…
The bid team may contain 50 till 60 people. Where 10 are fulltime project employees and the rest is 50% active, good for approximately 20 FTE. Together they create the content of one final document. The account manager is the spokes person to the customer. It is not unusual that at the customer’s side also approximately 50 people are involved. These are mostly technical employees and architects.
A quote request is mostly done by e-mail.
The complete process can be seen as a spiral, which has repeating parts (see figure below). At last the middle is reached, in this case the final quote. This is also agreement, which can be seen as the contract.
Documents
As named earlier the final quote is one document. ORG3 is very flexible because this
Quote
Idea
Discussion Proposal Meeting
New Insights
Turns and modifications
Figure 1. Repeating Activities
movies, digital and password protected, in MS Word format or just printed on hard copy. It is all possible and customer driven.
The quote contains several parts. The main structure is build from out to inside.
Namely:
• The view of the end-user, also called marketing view.
• The view of the customer, consequences for the ordering organization.
• Integration issues.
• What kind of products are needed, also called the technical view.
A quote usually consists of 50 – 1000 A4 pages, although up to 10 binders may be requested by customers.
On a lower level the quote can be divided in all kind of parts matching with the several departments (see previous page). These parts are called:
• Service Level Agreement (SLA)
• Project Plan
• Marketing
• Management summary
• Integration
• Product specifications
• Manuals, installation plans
• Building plans (architecture in detail)
• Regulations (relation and impact of the local laws)
Above list does not have to be complete but gives a clear indication of the complexity of the quote track.
Internal knowledge about sales process
Although making quotes is a unique process, the activities are well known. This makes the quote part of the sales process an “oiled machine” according the interviewed person.
Most important issues for improvement
Biggest challenge is the internal translation from data of the unstructured and very flexible sales process to the relative structured process of operations, once the order has been received. Because the low number (50 orders) and uniqueness of every sale lead, it is not interesting to perform this translation automatically (or computerized).
Due complexity, variety and fast chancing environment this is not realistic (or profitable). Therefore this is issue of good organizational design and management.
ORG3 is missing insight in the costs of selling. These are men hours and certain
money investments (for example, a product demo). In the beginning of a sales track
this is clear. But more costs are made during time. ORG3 would like to improve this
insight. This information is passed to the resource management department. The information is giving insight in the profit and loss of a customer.
Other interesting issues
Planning and structural shifts in customer demand are used to plan what and which employees will get extra trainings or re-education.
Effectiveness of sales-supporting software could be improved if the advantages of use
are obvious to all sales persons. Siebel would be widely used if there would be a
short-term advantage to sales people. One of the reasons for this aspect is the non-
repeating character of the business.
ORG4
Branch: Energy Person(s): Head Direct Sales Related interviews: ORG22 and ORG24
Interview Date: Wednesday (afternoon) 30th of November 2005
Organization Description
ORG4 provides energy. They sell mainly electricity and natural gas. They see this product as a commodity. Other products are cold air (less than one percent of the yearly turnover) and co2 (warm air, but also used for horticulture). The latter is good for approximately 10% of the yearly turnover. Additional ORG4 consults customers about energy savings. The sales department delivers leads for energy saving projects.
These advises are sold and handled by another part of the organization.
Product Description
As mentioned in above paragraph, ORG4 sells two main products 1. Electricity, of all customers…
a. 80% has a peek/low tariff structure b. 10% has a integral tariff structure
c. 8% has a Certain margin on the variable electricity price (can be clicked to non-variable) [difference with the day price] and
d. 2% has an APX price. This is the day price.
2. Natural gas
a. Sticky, this are day prices
b. Variable with the oil-index (can be clicked to non-variable) Other variables that above products have are:
• The length of the contract term
• Having green energy or not
• Billing options like
o Digital bill or by post
o Consolidated or every location apart
o Energy tax combined (approximately 20 customers have this product);
The sales management likes to have a standardized product. This reduces risks and the
probability of errors.
Acknowledgments
ORG4 also serves government organizations. This tender process is fundamentally different compared with the normal sales process. For this reason this part of the sales process is left out the interview.
Furthermore, ORG4’s market is divided in two main divisions. The first one is retail and contains consumers (total market of 6 million customers) and small business (total market of half million customers). The second division is the B2B market for medium and enterprise business. This division has three segments:
1. Corporate Accounts (CA). These are the top 500 companies of the Netherlands. The final state of the sales process can vary most with this group of customers.
2. Business Market (BM) with a market size of approximately 3.000 organizations.
3. Direct Sales with a market size of approximately 46.000 organizations. This is including 4000 market gardening organizations. This last group is a separated division.
It can be said that Direct Sales is everything between bigger than retail en smaller than large enterprises. The interview was about Direct Sales.
Band wide of natural gas cannot be moved. After the first of January 2006 some customers risk penalties like 15.000 Euros pro hour.
ORG4 also does business with intermediary or certain groups of customers. This part will not be discussed.
Flexibility
The flexibility of the sales process is relatively low. Customers have a few options in product choice. Furthermore, the sales process is very structured and has a relative low variety in the number of product attributes. This is how competitors behave and complies with market.
Quantitative Information
Number of quote request is 1500 in a year.
Number of generated quotes is 1100 in a year.
Number of quotes that finalize in an order is 400 in a year (36%).
The number of generated quotes is excluding updates. These are made after variable
changes or contract negotiations. For every of the 1100 quotes an average of 3 to 4
updates is done. Furthermore, all orders origin from a quote. There are no order
requests without a previous quote request.
External Sales Department counts 3 FTE, also called region managers. They visit existing customers and prospects. 70% of their time they are visiting prospects and are finding out certain issues. The other 30% they are selling the non-electricity and natural gas products. Furthermore, they can deliver a quote at the customer’s location.
The internal sales department of direct sales has 7 FTE. The independent internal sales departments of CA and enterprises have both 6 FTE. The shared contract administration is part of the back office and has 30 FTE.
Current Software
ORG4 uses the following software:
• The MS Office suite. The interviewee sees the package as necessary but useful. Documents are used a communication holders. “It works” and therefore it receives, on a scale from one till ten, a 7 plus from the interviewed person.
• The CRM system, called SAP (3.0) CRM. The CRM system suits well.
Advantages are the excellent support and continuity of the vendor. Biggest minor is the flexibility. This means the blue print cannot be easily changed.
For example, an extra input field cannot be easily added. Also the integration with MS Outlook is missing. ORG4 would also like to have all phone calls and faxes and emails integrated with CRM system.
• The calculation system, called Power Quote (MMT is vendor). This system contains a lot of specific knowledge about price calculations. On the scale of one to ten it gets a small six because the long run time between change request and software update.
• Software tool like above for the natural gas quotes. Accenture
6developed this software at instruction of ORG4. This software is called GPM. The excellent alignment between the software and the sales process is the biggest advantage of this software. Performance is a minor of this software. Simple tasks often need a minute or more processor time to complete.
• Software about the measurement data will not be discussed here because these belong to other processes than the sales process.
For CA and BM is this same software used, only calculations are made in MS Excel.
Also more changes are made in de MS Word document.
Description sales process Quote request are done by:
• Internet
• Fax
• Telephone
6 http://accenture.com/Countries/Netherlands/
The internal sales department receive almost all quote requests. First the prospect receives a standard quote request document. The prospect fills in:
• Name and address
• Connection (EAN code)
• Contract wishes
This form is sent back to the internal sales department, which qualifies the sales lead.
A credit check is done and if the result is negative or the request costs to much effort, the reaction is no (quote). Otherwise the customer is registered in the CRM system as prospect. Besides this, ORG4 checks the type of quote request. ORG4 defines three groups:
• Prospects that want the lowest price.
• Prospects who want quality and a company that they can trust.
• Prospects who want a good service versus price combination.
With this information and information about usage (if available), a calculation is done is Power Quote or GPM. The price goes automatically to the CRM system from both programs. The CRM system has a standard template for quotes. From the CRM system a MS Word document is generated which goes by e-mail or fax to the customer. Small details are removed and where possible the quote is personalized. In a few situations the quote is send by mail. After this the final quote is saved in the CRM system. This activity costs one employee between the 20 minutes and 1 hour.
Depending on the kind of request, but the variation is gradually distributed. An update costs 10 minutes. The quote is delivered between the two hours and two weeks. This is the runtime and the two weeks is the maximum.
If the customer reaction is negative, feedback is asked. For example which competitor won the order. Otherwise the customer usage information goes to the purchase department. This is to plan future purchase of energy.
The customer is set on agreed in the CRM system. After this a contract is made. This costs approximately one hour and is done by the back office (BO) with the same CRM system. The quote information is reused and a standard template of the CRM system is used. The sales department makes the special contracts self. This is approximately 20% of all contracts.
The basic electricity tariff is always in the region of 6 to 8 cent (for 2007 it is 10 cent /kWh). For this part of the quote a standard template is used.
Different authorizations are used for several prices categories.
Biggest problem during the sales problem is estimating the consumed volume too low. Furthermore, it happens that the numbers of peek and low tariff are switched.
This costs approximately a half-hour rework.
Documents
A standard quote request form is used.
Complex knowledge in the sales process
The internal sales department owns the most knowledge which is complex because of continue variety.
Most important issues for improvement
Contact history of customers should be stored automatically. ORG4 is not missing information. However, information about the sales funnel is not implemented in the CRM system.
Other interesting issues
• Sometimes an existing customer appears. ORG4 was not aware of the delivery of electricity and gas to this customer for several months or years. This problem does not belong to the sales department from organizational view.
• ORG4’s market faces heavy (price) competition and small margins.
• The prospects usage is called a profile. This is known for ORG4’s existing
customers. Other organizations can request this profile at the energy net
administrator.
ORG5
Branch: Industry
Spoken Person: Internal Sales Department Employee Related interviews: ORG1
Interview Date: Thursday (morning) 1st of December 2005
Organization Description
ORG5 is a multinational. They make several products like optical fibre, sail (for boats), composite, ballistics and different kind of fibres for rubber products. For example transmission belts and hoses for cars. Hoses are also sold for industry in general. For the interview the focus was on the rubber products. This sales department is also called the “car-department”. The sales department serves worldwide, depending on demand from the market.
Product Description
The described sales department sells approximately one hundred products. These are all fibres from origin. Products can vary in:
• Quality: Some customers have a low price strategy, others a high quality strategy.
• Thickness of the fibre.
• Spindle size and weight.
• Length of the spindle.
• 1000 or 2000 filaments
• Size (one or three millimetre) of dipped chopped fibre (fibre in peaces).
Acknowledgements
ORG5 is word-leading company; they have around the 60% of the market. Another American company has the other 40% of the market. In the future a new company from Asia will enter the market. At least till that time there is a shortage on the market. From economic perspective this means that demand is higher than the supply.
During time prices will increase and suppliers (like ORG5) have more power
7. To illustrate; it can be said that the full production capacity of 2006 has already been sold. This shift in power from buyer to seller has impact on the number of quotes.
Approximately five or six quote requests where accepted in the year 2005. For the sales process this means that the workload is shifted from delivering quotes to making price settlements. This happens often by e-mail.
7 M.E. Porter, How competitive forces shape strategy?, The McKinsey Quarterly, Spring 1980
