Setting strategy is a bit like being a fortune-teller, you're putting forth a plan based on a vision of the future that isn't guaranteed to come true. But that doesn't stop people from making predictions, projections, and estimates every day. Detailed, high-confidence sales forecasts are essential for planning business strategies and responding to ever-changing market conditions. At a company such as Cisco, in fact, at almost any enterpriseĀstrategic insight comes from our salespeople (and we have 12,000 salespeople in 300 offices around the world). But for salespeople to be able to collect information and derive these insights, they need information: information about their customers, their customers, market and industry issues, and Cisco competitor activity.
Cisco depends on the accuracy of these forecasts to be able to keep costs low and customer satisfaction high by maintaining slim inventory margins (preventing over- and underbuying) while meeting accurately forecast customer needs. Accurate forecasts also allow Cisco to respond to sudden or unexpected market changes or new opportunities quickly. Even more important, they need almost painless access to information. A company makes money when salespeople sell, not when they're crunching numbers. To help us complete a strategic view of sales, we needed a technological solution to handle some of the heavy lifting. To fill that need, we embarked on creating our e-Sales portal.
Our impetus was the downturn back in 2000. To combat the resulting revenue decline, we launched a company-wide effort to increase productivity by 15 percent. At the time, according to our statistics, Cisco salespeople were spending an average of 25 percent of their time with customers. The rest of the time, they were tracking orders, resolving credit issues, searching the Internet for customer and competitor information, and generating those all-important weekly sales forecasts.
Based on national averages, our salespeople were already excelling in this area. According to a 2004 study by Proudfoot Consulting, most salespeople spend only 10 percent of their time actually selling. Still, we felt we could improve on our current numbers.
The question was, How? To answer it, we had to consider several key areas:
- How could we increase the productivity of our field sales force and help it better serve customers?
- How could we increase our confidence in the numbers developed for the weekly, monthly, and quarterly sales forecasts?
- How could we eliminate overlapping and often incongruent reports produced by multiple information systems?
- How could we create common sales information and forecasting applications that would serve the varied needs of different organizations within the company (while we maintained a single repository for the underlying data; that is, a single version of the truth)?
In our planning sessions, we realized that any tool we developed had to deliver three drivers for increasing the productivity of the salespeople: efficiency, effectiveness, and customer intimacy. Not surprisingly, these were all interrelated. A better tool for sales management would provide more time with customers. Ideally, the same tool would minimize the effort they were expending to track the high volumes of product and service orders for each customer. At the same time, it would create a more accurate and personalized view of order histories that would enable salespeople to be more knowledgeable about their customers.
With this in mind, we looked at what then existed. We found that salespeople were being deluged daily by e-mail containing spreadsheets and reports drawn from databases as well as internal Web sites. Disappointingly, the traffic on these sales-focused Web sites was decreasing while the number of sales personnel was increasing. That indicated that the sites were not fulfilling the purpose for which they were intended and that they were simply too hard to use.
Digging deeper, we tallied a list of problems:
- A lack of standard processes, information, and interfaces, which forced salespeople to access too many Web pages for information
- A lack of real-time information about orders, changes, returns, and customer credit status
- An overwhelming number of data points about customers, who may have had both active orders and order opportunities, which made it difficult to store data and transmit it to a salesperson's laptop
While this was going on, we still expected salespeople to file weekly forecasts of future sales, the keystone of our strategy efforts. This process was broken as well. Salespeople entered data into spreadsheets and then sent them to sales managers, who consolidated them for delivery to executives. It didn't help that different sales organizations used different forecasting systems and processes as well as different vocabulary and rules for defining prospects.
The result: a low level of confidence in the numbers we needed for building sales forecasts and thus, our strategic vision.
Part II discusses what we learned from creating a sales portal.
Related Links:
Cisco IT E-Sales Portal Case Study
E-Sales Video
