- Benchmarks for Best Practices -

Information Technology

Objective:

To build a competitive advantage by managing and/or "mining" information.

A common thread that weaves through World Class sales organizations is that of efficient design, effective implementation, and continuous management of information technology systems. These systems are engines that drive their companies. Through the collection and communication of information such as customer data, product/service specifications, and purchasing data, sales organizations are able to more effectively manage change, appropriately segment the market, and focus on the customer. Using technology at even the most basic level of facilitating transactions and administrative duties allows increased and higher quality face-to-face time between buyer and seller. Information technology has simplified multiple aspects of client relationships and has become a popular training vehicle. Effective use of technology can positively impact many facets of the sales process. One of these facets is creating a competitive advantage by tailoring technology to the organizations' and customers' specific needs.

Method:

Build state-of-the-art Information Systems (IS) capability focused primarily (if not solely) on information technology that directly assists the customer and/or sales force.

Critical Component:

Identify the core competitive advantages that differentiate the seller in the marketplace, track and measure advantages with customized IS technology.

One of the focal points of World Class sales organizations is being "total solutions" providers. Such positioning requires adding value to the sales offering. No longer do companies sell strictly products and services for revenue. Information that helps to define solutions and uncover added value is not always apparent from simply monitoring transactions and probing customers. However, internal and external information that is properly organized can be "mined," thus facilitating the development of sound strategic and tactical action plans. GE ICS "mined" its database to identify customers in a given market that were operating motors 15 years or older. They then devised a plan to assist customers in analyzing the inefficiencies and associated costs with the old motors as compared to operating with new. This created a model the entire sales force could utilize.

Boise Cascade Office Products uses a number of software programs that enables it to store, sort, and analyze data efficiently. The Activity Based Cost Management (ABCM), Data Warehouse, and SAVE programs were significant examples of using technology to create competitive advantages.

ABCM measures cost by activity, customer, and product and enables Boise to directly assign over 90% of actual costs to specific customer related activities. Thus, opportunities such as cost savings possibilities can be explored and presented to customers. The end result is usually improved financial results for both the buyer and the seller. ABCM also allows for the sharing of business knowledge and flow chart processes with Boise's customers.

The Data Warehouse program provides a detailed, chronological view of a customer's transactions and purchasing patterns. This account information is the cornerstone for effective account planning. The sales representative is now able to identify sales opportunities by product line and lost business, as well as make suggestions that will improve the customer's purchasing efficiencies. Data Warehouse identifies prospects for new products on the basis of historical purchasing activity, and in some cases helps to formulate marketing strategies.

SAVE is a software program developed to educate end-users and drive attitude/behavioral changes relevant to an organization's office supply management. It was a key component in the selling strategy to a major hospital buying group. Using SAVE, the group was able to determine the costs of various buying options they planned to offer. This led to the conclusion that BCOP understood the buying group's challenges and could assist in the development and implementation of new and cost efficient purchasing processes.

Critical Component:

Sales force automation geared toward increasing efficient and effective communication with the customer.

These days it is rare for publications aimed at sales and marketing managers and salespeople to fail to mention sales force automation (SFA). This extensive press coverage suggests that organizations are diving headfirst into SFA. While it is true many companies have rushed to automate their sales forces (and experienced unintended consequences such as automating already weak processes), World Class organizations have taken a very deliberate path in their approach to SFA. Chally's World Class sales excellence research revealed that only 33% of the best-in-class companies were in some operating stage of SFA. The remaining two-thirds were still in the developmental stages. Similarly, the best-in-class companies of the most recent study have exercised caution in implementing SFA. Before SFA "rollout," concise plans were developed to define end-state objectives, remove barriers, identify processes, and budget investments. While companies are now beginning to develop methods to measure the return on investment of SFA, it has become quite clear that an automated sales force is necessary to reach World Class status. Allegiance, AT&T, BCOP, and GE ICS all focus and customize their SFA efforts to facilitate more effective communication with their customers.

The desire to target solutions that would improve its customers' business results led IBM to develop an "Opportunity Management System." The Client Representative can input new opportunities into the system, which will automatically identify the resources necessary to successfully sell, implement, and service these opportunities. The system has the capacity to review the availability of skills, knowledge, industry experience, and proficiencies to support the customer and the representative, and can ultimately pull together a team that will develop the most responsive and cost-effective solution for the customer.

Critical Component:

Sell the customer and salespeople on the use of information technology by focusing on its "user friendliness."

The rapid advancement of technology has caused many executives to recognize that it is outpacing their companies' ability to harness it. Technology plays a vital role in virtually all functions within an organization, impacting almost every employee. Consequently, to realize the full potential of efficiencies possible through technology, the human factors must also be addressed. The World Class organizations are developing a wide array of tools to support customer interface with a careful eye toward "user friendliness." Customers and employees find it much easier to embrace the benefits of technology if it is easy and fun.

Multiple, voluminous binders were historically the method of delivery for AT&T's complex product/service offering training. Due to the sheer volume of material, this method proved to be inefficient, therefore ineffective. AT&T now provides its account executives (and others) with multimedia, interactive CD-ROM product training. The account executives can access product information as well as take periodic "bar exams" to ensure assimilation and understanding of the information. The multimedia, interactive CD-ROM helps to alleviate boredom, and also allows access to training at anytime . . . without necessitating an absence from territory and customers.