solution selling in telecommunications infrastructure business: case study s-38.3310...

Solution Selling in Telecommunications Infrastructure

Business: Case StudyS-38.3310 Tietoverkkotekniikan diplomityöseminaari

Joakim Knutar

Valvoja: Heikki Hämmäinen

Agenda

• Background– Research Problem– Objective

• Solution Selling• Case Study• Results• Conclusions

15-05-2009 2Joakim Knutar - Master Thesis presentation

Background

• Solution Selling has been implemented at the case company since 2005

• At least 6 different programs since 2005 that deal with transforming the organization into a solution-centric organization

• Beginning of 2008 top management started asking about proof of the improvements gained so far


Background

• Research problem– Have the case company been able to produce

higher margin in solution selling deals?

• Objective– Case study about the profitability for solution

selling deals– Identify possible profitability drivers for solution

selling at the case company


Solution Selling

• Solution Selling– Consultative engagement– Proactiveness– Customer business problem

• Solution– “a custom-made offering made out of products

(HW/SW), services, and 3rd party components combined to solve the customer’s business issues and give value to both the customer and the supplier”


Solution Selling

• Proactive prospecting• Opportunity management• Stimulating interest• Relationship• Power people• Value creation• Account management• Knowledge management (repeatability)


Case study

• Profitability information about solution selling deals not retrievable from financial systems

• Only way to get to the profitability is by conducting a case study– Interviews with sales people– “let’s investigate a statistically good number of

deals”


Case study

• Sales funnel to provide information about deals• Deal identification

• Opportunity is identified without RFX-process (latency criteria)

• Opportunity is scoped consultatively around customer commercial obstacle to be removed. Scoping is done in stream of workshops together with customer’s empowered delegation (scope criteria)

• Scoped opportunity is quantified to contain high value in customer’s commercial performance improvement (high value impact criteria)

• Opportunity is identified without RFX-process (latency criteria)

• Opportunity is scoped consultatively around customer commercial obstacle to be removed. Scoping is done in stream of workshops together with customer’s empowered delegation (scope criteria)

• Scoped opportunity is quantified to contain high value in customer’s commercial performance improvement (high value impact criteria)


Case study

• Interviews– July 2008 – December 2008 (data still received in February 2009)– 30 minutes per deal– 223 deals investigated– Needed information retrieved from 166 deals (161 meetings held)

• Focus on– Solution selling or not? - Uniqueness of solution– Scope - Match to customer need– SW/Service content - Latency– Pain point - Reusability– Value creation - Financials– Consultative engagement


Results

• Ordinary sales vs. Solution selling• Retrieved financials compared against regional

and global reported profitability July 2007 - July 2008


Results

• Deal size impact on profitability


Results• Truly latent deals– 22 deals– Gross margin 73%

• Proactiveness• Scoping• Commercial value• Relationship• Reusability• Power people• Standard SW components


Results

• Profitability driver framework

Gate 2 Gate 3 Gate 4 Gate 5 Gate 6

Go / No go Bid / no bid Approvals Win / Loss Start delivery

ValueValue

Engagement (power persons)Engagement (power persons)

Architecture, design, and buildArchitecture, design, and build

The scope of the dealThe scope of the deal

Uniqueness of innovationUniqueness of innovation

Match to customer needMatch to customer need

Excellence in executionExcellence in execution

Project/contract/change mgmt

Project/contract/change mgmt

ServicesServices

ReusabilityReusability

3rd party share3rd party share

Software (standard/customized)Software (standard/customized)

External drivers

External drivers

Internal driversInternal drivers


Conclusions

• Results indicate that solution selling gives better gross margin

• Financial system need to provide this info in the future

• Knowledge management utilization• Need for change


solution selling in telecommunications infrastructure business: case study s-38.3310...

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