InformationWeek
Defining The Business Value Of Technology
November 17, 1997
Easy Automation
More affordable products have made it easier than ever for companies of all sizes to automate their sales and business processesBy Anne Fischer Lent
These companies, which previously couldn't afford the price tags of sales-force automation systems of $3,000 and more per user, now find an abundance of products in the $1,000-per-user range. They are using automated solutions for sales quotes, call reports, and order entry, as well as to automate other parts of the business such as human resources, accounting, and executive reporting.
When, for example, Vulcan Materials, an Atlanta stone producer, wanted to upgrade its costly implementation of Brock International Inc.'s Take Control, market analyst Andrea Black knew it was time for a change. The company chose PowerCerv, and in the past six months rolled it out to 12 out
side salespeople, "including one office that hadn't been computerized at all," Black says.
PowerCerv has given Vulcan Materials' salespeople an "alternative to doing quotes on napkins and Post-It notes," says Black. Now the mobile sales force heads into the field with sales-order information loaded on their notebook computers, making accessing information much easier than calling headquarters or lugging around big binders," Black says.
InstallShield Corp., a Schaumburg, Ill., software maker, is another midsize company that has turned to sales-force automation. Database administrator Greg Dunlap found sales- people spinning their wheels, doing too many follow-ups in the same way. A year ago, the company implemented Pivotal Relationship, a sales-force automation so- lution from Pivotal Software Inc. in North Vancouver, British Columbia.
Pivotal lets Dunlap create custom systems so the sales force can work proactively. The company now uses Pivotal Relationship for order processing, sales data access, tr
aining, and marketing.
Pivotal, Onyx Software, MEI, SalesLogix, Borealis, and PowerCerv are among the sales-force automation vendors targeting this middle market. They're doing "phenomenally well," says Wendy Close, a research director with Gartner Group Inc. in Stamford, Conn. Though most have been selling these solutions for only a year or two, they're already generating tens of millions of dollars in annual revenue, Close adds.
Onyx is the perfect example. Founded three years ago, the Bellevue, Wash., company saw $150,000 in revenue its first year. Today, it has grown to 200 employees and revenue of $10 million.
According to a recent Gartner report, sales-force automation is the largest component of the $3.9 billion technology-enabled selling market, which also includes call-center selling, extended enterprise selling, retail selling systems, and technology-enabled buying. The sales-force automation market will grow at 35% per year through the year 2000, Gartner predicts.
Close declined to estim
ate how much of that growth was attributed to the midsize market. But Barton Goldenberg, president of Information Systems Marketing (ISM), a Washington research and consulting firm, estimates the midsize sales-force automation market is growing by about 30% a year.
Conditions Are Right
These companies also tend to be full of adventurous people who are not averse to taking on new technology. They've already embraced various back-office solutions such as SQL Server and other NT standards. The new sales-force automation solutions are designed with these companies in mind.
Automation tools also appeal to midsize companies because the tools can automate several business functions. According t
o Eben Frankenberg, Onyx's VP of sales, the task of automating the entire business process is manageable in a midsize company. At larger companies, the corporate culture is far more difficult to infiltrate. But at smaller enterprises, it's possible to see from one end of the process to the other-sometimes encompassing everything from the sales order in the front office all the way to accounts receivable in the back. The process, and the return on investment, are simply more obvious.
At Williams Scotsman Inc., a Baltimore mobile-office lessor, Linda Roselle rolled out PowerCerv in both the front and back office. Roselle, the company's sales-force automation project director, says she hopes to "improve on the quoting process, the order process, and right on through to the general ledger."
While PowerCerv is used by the mobile sales force and some inside salespeople, Roselle foresees a time when accounting, inventory, and human resources will all be linked. That way, when an order is generated, everyone in
volved will be able to track its status from the initial quote right through follow-up and support.
Roselle saw immediate results. Salespeople were able to finish quotes in a minute or less, and to take quotes to order in three minutes or less. Sales activity increased by 20%, she adds. The jump was due in part to "being able to put the hottest, most opportunity-rich lead in front of them on the screen," says Roselle.
Integrating the main processes from front office to back is not unusual, but many go about it in different ways. Optika Imaging Systems Inc., an imaging software company in Colorado Springs, Colo., installed Onyx Customer Center and Customer Center-Unplugged all at once. Optika wanted a customer-management solution that would integrate the inside and remote sales forces, tech support, marketing, accounting, customer service, order entry, quality assurance, and more.
According to Mark Cowles, assistant database administrator, "Instead of rolling it out to individual departments one at a t
ime, we rolled it out to all, all at once."
While this may appear risky for a company that previously had no automation in place, the only downside, according to Cowles and Optika's market development analyst, Jim Hardeman, has been that some departments are up and running faster than others. The advantage they see in rolling the process out one small step at a time would be to take time with each individual team of users to ensure that the process is fully understood and applied before moving on to the next group.
ISM's Goldenberg advises that proper training is imperative for a successful sales-force automation implementation. He estimates that companies should expect to spend $3 to $15 on training for every $1 spent on computer hardware and software.
Goldenberg lists five other impediments to successful sales-force automation implementation: lack of a sales and marketing strategy, lack of corporate commitment, in-company politics, lack of know- how, and resistance by sales and marketing profession
als.
Meeting Demand
Answering this demand are several recent alliances. For example, Pivotal's recent partnership with DataWorks lets the two vendors supply an integrated system with Pivotal's software running the front office and DataWorks, a supplier of open systems, client-server-based enterprise resource planning (ERP) software for midsize, discrete manufacturing companies, in the back.
While enterprises want fully developed tools designed for specific industries, the ability to customize the tools remains paramount. InstallShield's Dunlap, for example, has customized Pivotal's order-entry process. Pivotal Relationship offers much for InstallShield's sales force, "but order entry is an area that's highly specialized for any company
," he says. While Pivotal uses a proprietary programming language, Dunlap says, "if you know one, you know them all." He has found customizing Relationship to be straightforward.
At Vulcan Materials, Black is overseeing the installation of PowerCerv for about 20 users in two offices. Customization, he says, was a chief concern. PowerCerv was selected specifically because it was written in PowerBuilder. "While PowerCerv came with a lot, we rewrote and changed a lot of things to fit Vulcan Materials," says Black, adding that Vulcan's quoting capabilities are now customized for their needs.
Sales-force automation vendors are increasingly responding to customers' requirements for enter- prisewide solutions, customizability coupled with ease of use, and increasing sophistication.
Only a few years ago, the choice for midsize companies was to go with high-end tools such as Aurum, Vantive, or Siebel, and possibly never see a return on investment. But a flurry of tools has filled that gap. Even some of the con
tact-management tools have scaled up to meet increasingly sophisticated needs.
ISM's Goldenberg likens the growth in sales-force automation solutions to a stampede launched by large corporate users. Now, he says, midsize companies are "joining the herd and will continue to mass well into the future."
ales-force automation isn't just for big companies anymore. Only a few years ago, options were expensive and difficult to implement. But today, automating sales and other business processes is easily within the reach of many midsize companies.
There are several reasons for this spurt of interest in sales-force automation at midsize companies. One is that smaller companies already use client-server technology and have Windows NT in place. Unlike larger companies, many midsize enterprises aren't worried about converting or connecting to legacy data.
Midsize companies seek very industry-specific sales-force automation tools because they lack large IT departments to roll out their own. Industry-specific tools come with reporting modules, quoting tools, and other components designed for a particular industry.
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