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Intel eSales Engagement
​The original business case for the project was based on the time saving of a sales person logging into the integrated portal vs. multiple logins to the individual tools. This time saving was estimated at 15 minutes per day per person. The value of the portal was then estimated by multiplying the time savings, times the average hourly rate of the Intel sales person, times the number of sales people, resulting in a time saving (productivity) benefit of approximately $5 million. The authors have seen this ‘transactional’ valuation methodology many times in industry, often in the context of justifying productivity enhancements. However, a natural question arises: ‘What is the 15 minute time savings per day used for?’
In-depth interviews by Mark Jeffery with the Intel sales and IT teams revealed that the duration of average sales process activities ranged from a few days to several months. Further, the portal served only to aggregate existing tools and neither the underlying business processes nor the applications themselves were modified. So despite the psychological satisfaction to the employees the time savings was insignificant relative to the scale of the Intel sales processes, so that any tangible productivity benefits were minimal. Using the prior analogy, the steam engine had effectively been swapped with the large electric motor.
So how does one enable real productivity improvements and unlock strategic value from investments such as the Intel eSales portal? The first step it to understand the underlying process.
​We interviewed 10 Intel Field Application Engineers (FAEs) and Field Sales Engineers (FSEs). We then mapped the sales process from the time when an FSE/FAE receives initial marching orders to engage a customer with a new product through post production (see the process model diagram). For Intel, their ‘customers’ are electronic or PC original equipment manufacturers (OEMs).
Intel Sales Process Model
The key steps in the process are the initial Data Mining to match Intel products with customers, the Design-Win where the customer agrees to incorporate a specific Intel product, the Design-In where the customer designs the Intel chip set into their product, and finally Prototype and Post Production where product is shipped and Intel receives revenue from the sale of the product through the OEM. The process includes a proactive phase where the FAE and FSEs drive the process and a reactive phase with customers calling with requests for information and help. The FAEs and FSEs also spend significant time engaging with customers to understand their needs and build or strengthen their relationship.
The operational value of the eSales Portal is understood by analyzing the Intel sales process holistically and then focusing on processes where the portal has the most impact, namely: Data Mining, Customer Pitch, Design-Win, and Design-In phases (the green nodes in the process model). Analysis of Intel’s operational Customer Relationship Management (CRM) data gave the respective statistical distributions of time spent by sales managers at the various nodes in the sales process. We then used process modeling software to create detailed simulations of Intel sales in action.
​The result is a dynamic process model where one can ask and answer question such as, ‘can we get to design-win faster?‘ (increasing the throughput), ‘what are the bottlenecks in the sales process?’ (understanding the constraints), ‘how much time saving is needed for a sales person to add one account?’ (adding capacity to the system), and ‘where can the eSales portal have the most impact?’ (focusing future investments).
​Interestingly, we found that the greatest impact on sales force capacity is in reducing the average operation time of the Design-Win phase as opposed to the other processes affected by the portal. This is because the Design-Win phase has the highest time variability in the sales process.
Given the net income from a specific Intel product line, and the probabilities of the product reaching production, one can extend the analysis to make a direct connection between eSales portal time savings and Intel sales revenues. “The model gave us new insight into the true value of the eSales portal, and enables us to focus our efforts for the future. The linkage of potential sales process change to revenues is incredibly important for Intel”. -Frank Ury, Intel Director of the eSales Portal.
The Intel eSales portal example illustrates two of the three ways that strategic operational value is created from IT:
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By increasing throughput, so that the process is completed quicker.
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By increasing capacity, so that the same resources can handle more work for the same throughput.
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By improving information quality, which improves flexibly and adaptability of operations significantly improving outcomes.
The third source of value, namely informational quality, emphasizes the value of information to enable more effective management decisions, significantly impacting performance and quality. How does focusing on these three value drivers lead to strategic advantage? Internal processes are often firm specific so that intelligent redesign and orchestration of these processes with IT is not easily duplicated by competitors: This is a key to unlock sustainable competitive advantage.
For the Intel eSales portal, interviews revealed that the portal can potentially address many informational issues, such as increasing accuracy of Intel product documentation and providing up-to-date inventory status. However, as in many IT deployments this had largely been neglected in the original project.