Baria Planning Solutions, Inc.: Fixing the Sales Process

Baria Planning Solutions, Inc.: Fixing the Sales Process

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1. What are the organizational and operational issues that underlie the problems facing BPS?

• The issues concern the North American sales of Baria Planning Solutions, a consultancy firm. The company is facing a slump in its win rate in converting new sales opportunities (from 17.5% to 15.5%) even though the volume of these opportunities has increased year-on-year. Decline is also seen in renewals which have come down from around 92% to 84% and Pilots which have dropped from 25% to 22%.

This is due to delays incurred within the sales support group which led to company missing out on many sales opportunities. Sales support group is made up of 4 teams – data engineering, data analysis, proposal support and pricing. Proposal support is the only group which is organized on the lines of the industry segments viz. energy, government, manufacturing and retail.

In 2010, capacity utilization for three out of four industry segments went over 100% in at least one quarter indicating a clear shortfall in staff number. At the same time there are cases which have below par utilization. The ideal range which balances high risk of shortfall with acceptable levels of capacity utilization lies between 70% and 85% (medium risk). This can be achieved either through new hires or by training existing employees in different functions so that their reallocation solves the utilization problem.

1. What alternates are available for dealing with the problem in the sales support group? What actions should Christy Connor propose to Brandon Ali?

• Three alternates exist for dealing with this problem:

1. Maintain the existing structure of proposal support.
2. Reorganize to a fully industry-centric sales support team.
3. Removing the industry focus of the proposal support group

The 3 options were analyzed with the following evaluation criteria:

• The capacity utilization has to be below 85% (medium risk) and above 70% (to avoid severe underutilization). Due to the varied nature of the work, the process time at each stage has a high standard deviation. The capacity utilization is thus kept at medium risk to over utilization in any quarter.
• The addition costs incurred due to hiring and training have to be kept minimum

The details of 3 options have been discussed in Annexure 1, 2 and 3 respectively.

Option 1: Maintain the existing structure of proposal support

To maintain the utilization at the desired level:

• Hire one resource trained to work in retail (Q1,Q2,Q4) and government sector (Q3)
• Provide training to resource in retail (Q1,Q2,Q3) to work in manufacturing (Q4)
• Provide training to resource in retail (Q1,Q3,Q4) to work in energy (Q2)
• Provide training to resource in government (Q1,Q2,Q3) to work in manufacturing (Q4)
• Provide training to resource in government (Q2,Q3,Q4) to work in retail (Q1)

The utilization is below 85% across all industries in all quarters except manufacturing in Q4 (86.23%). This deviation is acceptable in comparison with the alternative of hiring an additional resource which incurs an additional cost of $105,000 per year and causes utilization in rest of the quarters to fall significantly below 70%.

The additional cost incurred in this option is that of hiring 1 resource and cross-training 5.

Total additional cost = $ 135,290 [see Annexure 1]

Advantages:

• No major changes in the structure, retaining the competitive advantage.

Option 2: Reorganize to a fully industry-centric sales support team

To maintain the utilization at the desired level:

• Hire 1 resource in Data Engineering, allocate 3 resources to manufacturing and 2 resources each in rest of the sectors
• Transfer a resource from Government (Q2,Q3,Q4) to Retail (Q1) – no training required
• Transfer a resource from Retail (Q1,Q2,Q4) to Government (Q3) – no training required
• Transfer a resource from Retail (Q1,Q2,Q3) to Manufacturing (Q4) – no training required
• Transfer a resource from Government (Q1,Q2,Q3) to Manufacturing (Q4) – no training required
• Hire 2 resources in Data Analysis, allocate 3 resources to manufacturing and 2 resources each in rest of the sectors
• Transfer a resource from Retail (Q1,Q2,Q4) to Government (Q3) – no training required
• Transfer a resource from Retail (Q1,Q2,Q3) to Manufacturing (Q4) – no training required
• For the Proposal Support stage the hiring and training mentioned in Option 1 remain the same

The utilization is below 85% across all industries in all Quarters except manufacturing in Q4 (86.23%). This deviation is acceptable in comparison with the alternative of hiring an additional resource which incurs an additional cost of $105,000 per year and causes utilization in rest of the quarters to fall significantly below 70%. However, in the Data Engineering Stage it is underutilized (below 70%) for 3 Quarters and Data Analysis stage it is underutilized for 3 Quarters.

The additional cost incurred in this option is that of hiring 1 resource in Data Engineering, 2 Data Analysis and 1 in Proposal Support and cross-training 5 in Proposal Support.

Additional cost for data engineering = $ 70,000 [see Annexure 2A]        

Additional cost for data analysis       = $ 75,000 [see Annexure 2B]

Additional cost for proposal support = $ 135,290 [see Annexure 2C]        

Total additional cost = $ 280,290

Advantages

• It is a scalable model for future expansion, since scheduling and analyzing the operations would be easier

Disadvantages

• Leads to unutilized capacity in Data Engineering and Analysis stages without adding much value as a trade off

Option 3: Removing the industry focus of the proposal support group