In 2007 and 2008, BSP acquired 3 firms, which served government sector, manufacturing companies and retail sector respectively, However, BSP allowed the acquired firms to operate semi-autonomously, which resulted in incompatibility mongo different departments, along with seasonal workload issue, both factors contributed to the decreased efficiencies, thus lowered the of overall performance.
As for customer categorization, BSP categorized its customers into four different sorts—new sale, renewal, expansion, and pilot. However, although the direct sales force Of BSP served customers globally, its primary target market is North America. The North American Sales organization was structured into three groups – Sales, Sales Operation, and Sales Support. Chuck Dee, Jane Albright and Christy Connors are corresponding directors of he above three groups.
Employees in Sales Group were the front line force of the organization and they were split into four major industry sectors. Their primary job for Sales group was to make deals with customers and act as a bridge between Sales Support group and its clients, The Sales Operation group was responsible for competitive intelligence, win-loss analysis, sales training, staffing and managing the sales force compensation plan, Below sis list of four main responsibilities of Sales Support group.
First, collecting data from prospects and transform’ data into a standard Fortran, Second, processing data wrought Boss’s own spend analysis software and identify’ opportunities tort cost reductions and supplier performance environment, Third, assisting salesperson in developing and pitching proposal after the second step. Fourth, developing ultimate pricing proposal in accordance with sales strategy _ president of BSP got direct report and feedback from directors of sales, sales operation, and sales support department respectively.
Unlike other firms, which organized their sales support teams entirely by geography, BSP organized its sales support teams by industry focus. This unique structure provided BSP with advantage over its peer monitors by deeper understanding of industry-centric issues. SOOT ANALYSIS STRENGTHS BSP occupied 18% market share in 2010, which is not a small amount when compared With Other firms. Although it faced the issue Of delayed proposals, the majority customers from different industries had provided positive feedback about its professional expertise and know.
Because of its outstanding professional ethics, BSP consistently gained a renewal rate of around and 92% in consecutive years before 2008. Through a series of acquisitions of small firms in various industries, the company lowered its overall risk. Besides, BSP initiated a new selling process, which was very appealing to both existing and potential targeted customers. Moreover, a highly collaborative team and a detailed, execution-ready proposal would result in a timely service delivery with prominent project.
If the performance Of final proposal was lower than the clients’ original expectation, part of the loss would count in Boss’s check. This was the core strength Of BSP because customers got risk sharing pricing or performance guarantees from BSP. WEAKNESSES The recent dismal performance caused most customers felt disappointed ND dissatisfactory with BSP, The direct consequence was that the company not only lost its existing clients, but also potential customers. Cease of consistent renewal rate in 2010 was a warning sign. To make things even worse, the established reputation and goodwill would decrease in the long run.
Moreover, though new solution-selling process was an excellent point to attract customers, it placed BSP in a dangerous position since it had to share the risk with its customers’ poor performance, There is no doubt that it was a selling point to both attract potential customers and maintain existing clients, but it those rapports did not work out, it would definitely soar the cost burden of BSP and increase the risk of operation of the company. OPPORTUNITIES First Of all, BSP could gain a higher market share by properly fixing the delay problem.
Compared with its competitors, BSP had a relative higher quality proposal, Which helped it to establish a good reputation among customers and satisfies most clients they served. Secondly, BSP can accomplish economies of scales by acquiring firms in different industries With good reputation, Which boosts its market share in the short run. In the long run, when these acquired impasses get compatible with each other, the overall efficiencies will increase while the unit cost Will decrease, thus achieve economies of scale.
By virtue of this, the company will not only attain its existing customers but also gain more potential clients, which further boosts its market share. The increased market share will result in a better reputation for the company, which makes it possible for the company to exert more potential in the future market, THREATS Since BSP was a consulting service company, it was a cyclical industry. One of the main threats it may encounter could be economic recession, Even though t was a general threat that could influence most industries, BSP still suffered greatly from economic recession.
To make things worse, many competitors entered the industry when the economies were getting worse. Although BSP had its first mover advantages in the industry, competitions were getting more intense since more and more emerging consulting companies and large software companies had tried to enter this market These multi-national conglomerates also consolidated with small companies to gain more local advantages, taking away some market share by attracting both existing and potential customers.
Besides, most competitors in the industry had organized the sales support teams by geographic area and they hired local managers. This niche-play Strategy was definitely helpful because the local managers were more familiar with the local environment, culture, demographic characteristics, etc. , Which helps them to access their customers easily and more efficiently control the customer services.
Therefore, BSP did not have much advantage in competing With its competitors in local clients, which could affect BOSS’S further development in the future. Problem analysis of BSP In 2010, the company had an extremely bad performance in both attracting new clients and renewing existing clients. Although the number of opportunities were more than what it was initially estimated, the company’s win rate dropped from forecasted 1 percent to 15. 5 percent, and the consistent renewal rate dropped from 91 percent to 84 percent.
The main reason that contributed to the dismal performance of the company the low efficiencies of sales support process caused by seasonal workload, which gave rise to the delaying of proposal deadlines, thus substantially influenced the forwarding step of BSP. According to the “rule of thumb” of BSP, if the utilization rate was below 70 percent of its capacity, it was considered “low/’ risk of staff shortage, “median risk” between 70 to 85 percent, “high” risk between 85 to 100 percent, “over capacity” if exceeded ICC percent.
Staff in sales support group generally complained about the unrealistic “crazy workload”, which means they were being over utilized. However, according to Some interior data generated from the company, the average risk level of sales support function was “median”, which contradicted With the real situation. The reason laid behind the contradiction was the seasonal swings of workload. Since the structure of BSP was industry-focused, in some periods Of the year, most stuff had nothing to do.
While in some “hot” seasons, even if they tried their best and even sacrificed their vacation, they still could not finish their work. The “extreme” busy and “extreme” leisure resulted in a “median” utilization, but greatly decreased the overall efficiency of the company. Besides, BSP conducted 3 acquisitions in 2009, and tried to synergies and integrates the overall performance. However, these firms had thoroughly efferent technology platforms, service delivery processes, and even different fiscal year ends.
As result, low efficiency is inevitable due to the incompatibility with each other. Recommendations and Improvements To efficiently solve the problem caused by seasonal workload variations, the company needs to identify the bottleneck of the sales support process and make some changes to improve the overall efficiency and compatibility. In the sales support department, proposal support process spends the longest cycle time among the four functions, which is 107 hours (exhibit I L The manufacturing sector has the slowest cycle time, which is 21 1 hours (exhibit 2).
The proposal support department is the most significant process of sales support department, but the incompatibility with other departments by using industry focus structure made it “looks” independent and the shared across sales divisions make the sales support teams behave slowly and they seem lack a sense of urgency or ownership, which is necessary to push proposals across the goal line. Compared to BSP, all the other competitors are using hybrid structure, which means everay ales support team member is knowledgeable across all industries. They are generalists and understand how each industry functions.
However, if we just simply discontinue industry focus Structure and use a hybrid Structure, it Will take years for each person to develop this type of knowledge and might not be the best structure. Therefore, we decided to execute the combination of both industry and hybrid structure in proposal support team. We suggest BSP to reorganize proposal support process with organizing 4 members work in hybrid structure as a “floating sales support team”; maintaining 2 members in energy, overspent and retail ; other segments respectively, and 4 members in manufacturing.
In every specific industry, generalists from ‘floating” team will cooperate with specialists, which equates the workload of each process, such as develop configuration of software, project management, and consulting to address the identified opportunities. When the season is in a full swing, the ‘floating’ team moves to the team that needs help most. Consequently, manufacturing will have 8 members instead of 5; energy and government departments will have 6 members instead of 3 to work together to decrease he possibility of delayed proposal during the peak time. Y recruiting more employees, reorganizing industry structure, and reallocating the proposal staff, seasonal variation will be eliminated, extreme values of utilization will decrease and capacity will be more consistent with expected demand. In order to accomplish continuous quality improvements among the three departments, more frequent and deeper communication should be established, especially between sales and sales support. Customer relation management software (CRM) also can be introduced to Baric to sales people for the purpose Of tracking pacific and correct process and activities that operated by sales support.