Current scenario

The global Spend Analysis industry had experienced relatively rapid growth
over the last few years. Spend analysis was once the near-exclusive domain of
smaller, specialty solution providers like BPS. However, during the past several
years, several large software and consulting firms, including SAP and Accenture,
have entered the market, leading to consolidation among smaller firms.

BPS, a publicly traded firm with $95 in annual sales, founded in 1997 to take
advantage of the nascent popularity of spend analysis or spend management, and
analysis methods and tools, was considered an early mover in the field. BPS
helped its customers reduce their procurement costs and improve the
performance of their suppliers. The work involves firstly scrutinizing customers'
spending categories through a combination of software, data analysis, project
management, and consulting. And, then identify the sources of potential savings
through initiatives such as supplier consolidation and purchase standardization.
Finally, the implementation of procurement and change-management projects to
realize those savings.

At present, the Sales Support group's difficulties were having a direct

negative impact on the performance of the entire company. Though the company
is maintaining constant revenue but its market share and conversion rate are
falling, probably because of the disappointing performance of the sales team in
attaining new clients and renewing existing ones. The Sales directors feel they do
not get the help they need from Sales Support to close new deals, while the Sales
Support directors believe they could provide better support by organizing into
industry-specific divisions. The increasing competition in the consulting industry
and inefficiencies in the sales process at BPS may undermine the company's
ability to win new business. The recently hired director of North American Sales
Support has to analyze the current process flow for Sales Support and identify the
problems facing the sales organization.
Problems faced by BPS solutions:
BPS project win rate for new sales, renewal, and pilot projects has reduced by 2%,
6.25% and 3% respectively when compared to the projected win rates. This
negative impact on the performance of the company is been attributed to the
delays incurred by the sales support group of the company. The underlying
reasons behind this problem could be grouped in to organizational and
operational as below.
1. Organizational issues:
1.1 Sales team and proposal deadlines:
BPS provides procurement optimization solutions for four different industry
sectors Energy, Government, Manufacturing and Retail. This has made the
organization to divide the proposal support team of the sales support division into
above four industry specific units. The sales people were not able to get the
timely assistance from this proposal support team and because of this the sales
people were failing to meet the proposal deadlines. This made the customers to
switch to other competitors. This will have a negative impact on the organization
revenue for the next 2 years.
1.2 Cross training difficulty:
The sales support team has four functions Data analysis, Data engineering,
Proposal support and Pricing. The man power from the Data analysis and data
engineering team of the support group cannot be trained to work in the proposal
support team. This difficulty in cross training has created difficulties in sharing
the work load with in the sales support group. Experts were needed to work for
the sales support group; this has also made it impossible for other units (data
analysis, data engineering, pricing) to share its work load incase if the number of
requests are very high.
1.3 Absence of synergy across the sales and sales support:
Head of sales has repeatedly emphasized the need to shift the sales support
division to a more industry centric structure. These inconveniences had led to lack
of synergy between sales and sales support team
2. Operational Issues:
Variable input of works from various sectors in different time
periods.
The projects arise randomly in different quarters. It is not possible to predict the
number of projects in advance. This has led to inter arrival variability among the
projects (Refer table). This table as calculated shows the standard
deviation in the arrival of projects for various functions. This shows
that there is an inter arrival variability
The order processing times for various processes are different. This
has led to uneven Order wait time (Refer table in hrs.) for various
processes. This calculated table tells that the waiting time for Proposal support is
very high whereas for pricing is too low. So processes are not stream lined.

Alternatives
Status Quo :
In the status quo, we analyzed the various
factors like Request process time, avg
request inter arrival time, capacity per year,
through put, capacity utilization, request
wait time, total process time etc. (Refer
Annexure 1). Then we realized the bottle
neck was created in the waiting time of
each request to be processed. This was
almost around 24.82 hours (Wt avg of
18.97, 18.13, 17.60, 56.85). Hence the
various alternatives were evaluated based
on Request Wait time primarily.
The various alternatives that we have got are :
 1. Cross Training (Dropping industry focused approach for sale support
team)
2. Fully Industry Centric organization
3. Reorganizing proposal support by type of sales

Option 1: Cross Training

In this option, all the employees in proposal support are cross trained so that any
employee can be given any project and the entire team becomes a consolidated
one. The biggest advantage of this option is the substantial decrease in the

request wait time, which was almost 6.44 hours in the proposal support stage
(Refer Annexure 2). The cost incurred to do the cross training will be $6058
approx (=(105000/52)*3)
Limitations:
Team members need to remain in each role for 3 months at the least to
stay effective
USP of BPS by offering individual expertise in every industry is lost. Team
members become generalists from being
experts in one particular sector.

Option 2: Industry Centric Organization

The various functions of the sales flow including
data engineering and data analysis get divided
on basis of the industry so that the sense of
ownership will increase inside a single industry.
Dedicated resources are expected to focus on
the priority issues and expedite them. But from
the Annexure 3 we can see that the request
wait time for each industry while drawing sales proposals will still remain high at
18.97 hours for Energy sector and it reaches a maximum of 56 hours for the retail
sector. Significant reduction is seen in the request wait time for the Data
engineering, analysis and pricing phases.
Limitations:
Significant increase in manpower is required adding to costs
It does not address the constraint in the organization which is faster sales
proposal

Option 3: Reorganizing proposal support by

type of sales
This option explores the opportunity of dividing
the proposal team based on the kind of project
they receive as shown in the figure. This
mandates that the team has to be cross trained
across industries and akin to option 1 the
industry expertise gets diluted here too. We will
have to hire more people for the new sales team
as their workload becomes 169% (refer annexure
4). This option does result in significant reduction
in the request wait time as shown in the annexure 4.
Limitations:
USP of BPS by offering individual expertise in every industry is lost. Team
members become generalists from being experts in one particular sector.
Need to mandatorily hire manpower for new sales team.

Proposed Solution:
Based on the 3 options listed above, we are proposing that BPS should go for
Option 1 of Cross training the sales support team and dissolve the industry focus
structure as it results in the maximum reduction of the request wait time. The
cost of cross training is also less. Even though the firm might lose out on the USP
of individual expertise in each industry, the revenues and turnaround time for
each project will reduce. This will result in the firm remaining competitive. One
major constraint that the firm needs to watch out for is that since people working
in each industry of the proposal team hail from different firms, the team
dynamics need to be cultivated with care. Further Steps
Hire 3 more heads for further reduction in the request wait time from 6.44
hours to 3.61 hours.
Streamline the solution selling process by training and coming up with
generic frameworks for faster turnaround time. It will also reduce the
standard deviation for processing requests