IT becomes tightly integrated with process breaks in workflows often get built into systems and diminish productivity. Shining a light on these areas with an integrated view of operations and technology may well surface problems, which often involve outdated processes, manual steps, redundancies, and bottlenecks. An 80/20 approach can highlight a modest number of activities that, when corrected, deliver a disproportionate amount of value. Companies can usually apply these fixes in short order. At times, new systems may be needed, but modest enhancements or targeted work around often suffice. An additional error check in a credit application, for instance, can reduce the need to rework incorrectly entered data. Adjustments to workflow processes may also promote greater adherence to corporate sales-discounting and bidding policies.
Applied in high opportunity areas, these two levers can not only make a short-term contribution to earnings but also build a foundation for future performance. Two cases illustrate this approach.
Maximising revenues is always important, but even more so during a downturn particularly when revenues can be increased without raising prices. For many companies, especially those with complex pricing in business-to-business transactions, poor pricing discipline is endemic. Since most pricing regimes depend on IT systems for the process and the workflow these systems can play a central role by capturing lost revenues.
A telecom company has started to attack such issues by building high-value but inexpensive links between multiple silos of information. Contracts databases, sales funnels, compensation systems, CRM data warehouses, and other siloed systems formerly spanned a range of the company’s business-focused products. Just centralising this information in one accessible repository was a big step forward: it facilitated analyses that uncovered opportunities to improve revenues by controlling unnecessary discounts and by harmonizing inconsistent pricing policies across different products and regions. The value came from integrating information flows at key points, not from creating new systems.
Introducing this degree of transparency also increased the team’s credibility with the sales force. Better information flows made it clearer which practices resulted from uncontrollable market forces and which of them the sales reps could truly control, allowing the company to evaluate them on a comparable basis.
The Telco began closing the pricing gaps first by developing and testing new procedures and then by scaling up new metrics, as well as new performance-management and compensation systems. These linked the new procedures all the way from frontline salespeople up to the president of sales.
Technology played a critical role. The project team consolidated information from various product systems into a unified reporting database and developed simple pricing scorecards to make information more transparent and visible across groups. Tools linked the compensation of the sales reps to their performance on pricing by comparing their discounting and pricing records with comparable averages. Simple dashboards managed the performance of the sales force at each level, cascading up to the president of sales.
These policy and IT changes helped the Telco to reduce its price leakage and to increase its revenue on new contracts by 3 to 5 per cent, which translated into a margin expansion of 15 to 20 per cent or more.
Another critical goal during a downturn is getting more for example, by increasing a company’s operating scale, making processes more efficient to reduce rework, and stepping up efforts to automate manual procedures. IT is essential to all of these efforts.
Targeted technology investments helped one retail bank to increase the productivity of its branch office sales forces. The bank needed to adopt a more systematic approach to winning new accounts and to improve its cross-sales to existing customers. Technology helped to increase the hit rate for sales leads from marketing staffers and to create a more robust, “industrialized” way of handling referrals from tellers. These improvements allowed the company to convert such leads more quickly and to raise its revenues per employee.
The bank had relied heavily on manual, paper based processes to identify and distribute leads, customise offers, and close deals. There were islands of automation at points throughout the sales process but no end-to-end view of its workings or how technology could improve them.
A team of business and IT staffers reviewed branch operations and quickly identified areas where focused action could produce substantial gains. The distribution of leads to the sales staff was automated, and more of them were directed to the reps with the best performance in previous campaigns. The tracking of customer outreach efforts and the keeping of sales conversion histories were automated as well, which made sales efforts more efficient and helped the company to avoid hitting clients with multiple offers.
To give sales reps a full view of a client’s bank relationship at the click of a mouse, the lead-management system and the enterprise CRM platform were integrated. The system could supply “next-best offers” for each customer, as well as call scripts to help reps push new products. Data entry after each closed sale was streamlined, and vital information that could be used to model strategies for future conversions was captured more fully and efficiently.
After making these investments, the bank reported that it was on track to double the number of daily branch wide sales calls, improve its conversion rates, and significantly raise productivity. Uniform sales procedures, applied throughout the system, were expected to yield further efficiencies.