A Shoeshine, A Smile, & A Beat for a Thousand Feet

Sales force automation (SFA) refers to everything from basic contact management and calendaring tools to sophisticated systems that pull in data from core transaction, production, and financial systems and range across the Internet for data on current and prospective customers. The SFA system may include advanced analytics that help salespeople and managers prioritize opportunities. Other SFA tools are geared more for managers, helping them track and assess the performance of individual sales reps.

Driving the need for SFA is the new sales environment that has emerged in the past few years. The lone sales rep pounding the pavement with a sample case and price list has been replaced by a team-oriented sales approach, particularly for complex products and in certain industries. Solution-selling and a team-oriented approach demand information-sharing. Sales reps need to know not just the name and specifics of their customer but also the details of any previous encounters the prospect may have had with the company. The rep also needs to know more about the prospect's company, market, and situation if he is going to pull off a solution-sell.

For example, the sales rep should know if the customer has a complaint concerning the invoice or has been trying to get tech support to respond to a problem. The sales rep also should know the state of inventory or the production pipeline before he or she can promise delivery. All this calls for SFA systems that tie into the call center, help desk, inventory and shipping systems, and more. Through the SFA system, the rep may also need to search the Web for the prospect's latest company announcements and industry and market trends.

Increasingly, SFA is considered part of CRM, a three-part process of finding potential customers (prospecting), capturing new customers (sales), and taking care of customers (service). Where SFA focuses primarily on the second part, CRM encompasses all three, notes Rich Bohn, president, Denali Group, Issaquah, WA. The Denali Group reviews a wide range of CRM and SFA tools.

According to International Data Corp. (IDC), Framingham, MA, the global CRM application market grew 84 percent last year, reaching $6.2 billion. By 2005, IDC projects the CRM segment to hit $14 billion. SFA constitutes the largest segment of the CRM market, representing over 40 percent of CRM sales.

Among large enterprises, Siebel Systems dominates the segment by far, although the other large enterprise application vendors — particularly PeopleSoft and Oracle — are hoping to cut into Siebel's share by leveraging their installed customer base. "A lot of companies find it easier to use their existing ERP application for SFA," notes Bohn. PeopleSoft, for example, bought Vantive, an SFA system, in 1999. This past summer, it relaunched a totally revamped version as part of PeopleSoft.

At the large consulting firms, SFA typically resides within the CRM practice. "In the early 1990s, CRM was SFA, but the practice has evolved. Now it is more than automating the sales process. It's about customer service, phone agents, and a lot more," says Ana Chao, senior vice president/CRM at KPMG Consulting.

Similarly at Cap Gemini Ernst & Young (CGEY), "Sales force automation is included within the CRM practice," notes Izzy Franco, vice president/CRM. The CGEY CRM practice addresses strategy, customer service, marketing, and the user experience as well as SFA, but SFA still plays a big role. In the U.S., SFA represents about 40 percent of the firm's CRM practice; in Europe, SFA represents as much as 70 percent of the practice.

Despite the emphasis on information automation, the consulting firms are steering away from the term "sales force automation." CGEY prefers the term "sales force effectiveness." "It is more than just technology," says Franco. PricewaterhouseCoopers (PwC) prefers the term "opportunity management," notes Adam Klaber, managing partner/CRM practice. Opportunity management, he believes, shifts the focus from technology to behavior.

The fear among all consulting firms is that the use of a term like "automation" emphasizes the technology aspect of SFA. But the technology in many cases is the simplest part, the part that least requires the services of a consulting firm. The packaged CRM/SFA applications can almost be implemented out of the package. Sure, they require back-office integration if the organization wants to give the sales force access to a wide range of data and capabilities through the SFA system, such as the ability to check shipping or billing and payment data, but even system integration is becoming routine. Among large enterprises, there is just a handful of packaged applications usually involved, and proven connectors are widely available to reduce integration hassles.

"On the technology level, it has really come down to a game of configuring Siebel. The software has become so robust that you can almost run it right out of the box," notes Franco. He estimates that only about one-third of a typical SFA engagement is involved in rolling out the software and connecting it to the back-end systems.

Rather than technology implementation, the big SFA roles for consulting firms revolve around organizational change and sales force acceptance. Without serious change management and behavioral change on the parts of sales representatives and management, SFA will assuredly fail. "The tools are only an enabler. To get business value requires process changes," says Klaber.

At the core of the SFA challenge is the individual sales rep. Organizations turn to SFA because it seems to promise a fast, obvious way to boost revenue by increasing the productivity of the sales rep. Managers, however, quickly become enamored of capabilities that allow them to see better into the sales pipeline, closely manage (micromanage) individual sales reps, and capture all kinds of knowledge that previously resided in the heads of the sales reps. Worthy goals, but they fail to answer one fundamental question: What's in it for the individual sales rep?

Without its benefits being made abundantly clear to the sales force from the start, the SFA effort is doomed. Why should any sales rep spend the time inputting details of his sales calls unless he or she is getting something of significant value in return? "Great salespeople are strongly independent. They don't like to conform. And they won't just sit at a terminal and enter data because management wants them to," says Barbara Tuset, project manager/CRM solutions, PeopleSoft, Inc. If they perceive the new SFA system as primarily a tool for management to play Big Brother and watch their every move, they will resist.

SFA systems can reduce the paperwork the sales force must complete by making it simpler and faster to file for things like expense reimbursement, but even the promise of reducing paperwork isn't enough to drive acceptance of an SFA project. "If all you want to do is relieve some administrative burden, you need to rethink the project," advises Klaber. The PwC approach is to make the SFA system the sales rep's single portal not only into everything within the company but also into the rest of the world as well.

CGEY uses a rule of thumb for weighing SFA benefits that calls for three substantive benefits for the sales force for every management benefit if the organization intends to win the support of the sales force. And not all benefits are particularly compelling. The most sought-after ones, Franco notes, are lead distribution, compensation status, and proposal generation and pricing. Just think about it from the sales rep's standpoint: Everybody wants to be fed sales leads, everybody likes to know where they stand at any point in terms of meeting quotas and earning bonuses, and no sales rep likes to produce detailed proposals. Give the sales reps these three benefits and they will gladly share information that provides management a view into the sales pipeline.

When SFA works, the payoff can be substantial. "At a minimum, the organization should be able to get a 30 percent improvement in productivity from the sales force," Tuset reports. A more comprehensive program tying in marketing automation and the call center could generate 50 percent productivity gains, adds Chao.

Not every industry, however, has jumped equally on the SFA bandwagon. For example, the pharmaceutical, telecommunications, and technology industries have been early adopters of SFA. Increasingly, the SFA vendors and the consulting firms are providing industry-specific versions of the core SFA product.

The days of Willie Loman and the soloist sales rep are coming to a close. Global business has become too competitive; products themselves are increasingly complex and must be understood and purchased as part of a broader solution. The sales rep must now become part of a team that includes technical support, customer service, marketing, finance, and production. And if the economic downturn following the dot-com collapse didn't already increase pressure on the sales organization, the deepening recession following the September 11 attacks will certainly ratchet up the pressure now.

Willie needs all the help he can get.

Sidebar: SFA Heavyweight Touts Forecasting

As the heavyweight contender of the SFA arena, Siebel Systems Inc. says enhanced analytic and forecasting capabilities are putting teeth in the latest version of its software, System 7.

"There's quite a bit more sophistication in the way forecasting works in relation to the core opportunity management system," says Jeffrey Scheel, vice president and general manager of Siebel sales.

"In prior releases, when you forecasted, you had to go through a much more explicit set of actions as a sales person or a sales manager to forecast," he says.

In fact, "now what you can do is you can actually drive more granular forecasts. So, for example, more granular product types, and you can also pull the forecast from the existing data in the system, based on criteria that you as a sales manager want to see," Scheel says. "So it actually streamlines the process of rolling up forecasts. And operationally, it makes it much more integral to the day-to-day management of a sales force."

Siebel also enhanced the synchronization capabilities of its solution. "We've imbued the synchronization technology with more intelligence about how it distributes opportunities and how it pulls information down to a laptop so that the synchronization times can be much more manageable," Scheel says.

In addition, System 7 includes new support for Research in Motion's Blackberry PDAs, in addition to existing support for PalmOS devices, PocketPC, and Microsoft handhelds,

"Integrating the handheld systems is another thing that people have been looking for as a way to take the operational information that's sitting in their laptop and make it available in the car or anywhere," Scheel says.

Meanwhile, in the best practices and methodologies area, Siebel has added a new sales methodology called Enterprise Sales Process, which is an account penetration sales methodology, Scheel says.

Siebel also has added "significant enhancements" to its incentive compensation application, "so that you can do things like offer up estimated compensation off of live pipeline data. So, if you choose to, you can basically provide salespeople with a real-time view of what the value of a deal is to them," he says.

Scheel says the addition of analytics offers a "huge amount of potential" in terms of delivering value to managers.

Regarding upper management, Scheel says, "we're finally at a point where we can offer them up an operational dashboard for sales or the call center or marketing that they would use to both monitor what's happening and also be able to kind of drill down on that analysis and use it as a tool to respond to situations that develop or trends that they see." — Darryl K. Taft