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Insights To Action - New Operating Model Often Needed...

As companies grow, often times there is a need to change its operating model to reduce process complexity, maximize focus and maintain future growth.

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Wilson Perumal & Company
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4K views

Insights To Action - New Operating Model Often Needed...

As companies grow, often times there is a need to change its operating model to reduce process complexity, maximize focus and maintain future growth.

Uploaded by

Wilson Perumal & Company
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Success Stories from

Leading Companies

An engineering firm chose a new operating model over continous


improvement to maintain growth

A successful engineered-product company with three product


divisions was seeking to invest in a new phase of growth.
Understanding where and how best to do so required a full
understanding of true profitability; a challenging question, given
significant shared sales, various service & support organizations,
national coverage, and products ranging from commodity construction
materials to more complex engineered solutions. After an in-depth
analysis of its front office, overhead, and channel performance, the
company determined that, despite significant success over the last
five years, the way it was organized to go-to-market would not let
it maintain growth and earnings in the longer term.

The current, single sales force was no longer


an efficient solution
The company had shifted to a generalist sales force to slash costs
during an economic downturn. However, it had since acquired a
number of new companies and product lines, expanding its offering
and market reach. Going from two to twenty product lines in six
years dramatically increased the required breadth of knowledge and
competency in Sales and Service. While the overall business had
performed well, the performance and profit contribution of each
segment, product line, and sales person was much less clear. After
studying the historical sales transactions, it was determined that
only 1% of its customers actually purchased from all three of the
companys segments (see below). This was contrary to what the
company had believed, and the key driver for why they determnind
change was necessary.
A, B, C
1% Customers

A&B
4% Customers

61% Customers

13% Customers

A, C
6% Customers

14% Customers

B, C
1% Customers

A New Front Office


1. Move from a functional-based to a product-based alignment for
the front office
The customer value proposition and buying processes were
found to be different across product segments
While there was some cross-selling, the vast majority of
customers bought products from a single product division
2. Split the back-office support to increase focus and remove
complexity
Split Service in two with one group supporting two (of three)
Sales divisions given their highly complementary processes
and required competencies
Decouple certain order management and customer
service activities to better align and organize skill sets while
simplifying processes
3. Create a new Inside Sales group
Many customers did not need, nor did they prefer, a hightouch sales force
Given a significant amount of small quotes provided, many
opportunities never were followed up with calls
4. Refine and improve use of distribution channel
A next tranche of customers either were small, buying single
unit quantities, or substituting with other brands found more
conveniently at distributors

Results
By reorganizing the front office sales and support
organizations, the company was able to reduce
process complexity as well as maximize focus
and accountability. Further, it was able to reduce
its cost-to-serve while expanding capabilities
and reach. Not only will costs to sell be reduced,
but more aggressive revenue plans have been
targeted. The expected three year benefit for the
company is in the tens of millions of dollars.

Customer sales across Segments A, B, C

www.wilsonperumal.com
[email protected]

Wilson Perumal & Company, Inc.

Wilson Perumal & Company, Ltd.

One Galleria Tower, 13355 Noel Road


Suite 1100 Dallas, TX 75240

Longcroft House, 2/8 Victoria Avenue


London EC2M 4NS, United Kingdom

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