Solution-driven enterprises quickly recognize an opportunity in the form of a problem or a pain-point in the market, then design and deliver a solution. Every small company typically starts as a solution-driven enterprise. It starts with the promoter(s) having this innovative ability to recognize problems and design solutions.

Business Processs

The processes of a solution-driven enterprise can be represented in the following simple model:

Processes of Solution-driven enterprises

When the company is small, the promoter(s) carry out the needs analysis and solution design, while other employees take care of execution, delivery and support. With increasing number of success stories with early customers, the company grows by increasing resources required for execution, delivery and support. If the product involves manufacturing, then manufacturing capacity is increased. If it is a service, then more manpower is hired. However, the functions of needs analysis and solution design are not easy to scale up.

Conventionally, the function of needs analysis has been a part of sales. The terminology is borrowed from a product-driven enterprise model, in which marketing, sales, exectution and support can be almost independant functions. In solution-driven enterprises, the sales person does far more than converting leads into orders. The sales person is a partner, helping the customer figure out the needs, and design a solution to meet those needs.

In a small company, the sales is typically restricted to either the promoter(s) or some sales heroes. These solution-sellers are able to pick up the skills required for needs analysis and solution design. As long as the heroes are able to handle the demand in the market, the company continues to grow successfully. If all goes well, the demand grows too large to handle. Increasing the sales force with fresh talent is of limited value. The skills for needs analysis and solution design are not easy to learn. New sales persons add overheads without significantly increasing volumes and reduce profitability. This creates the sales bottleneck in a solution-driven enterprise.

The Sales Bottleneck

Bottleneck in solution-driven enterprises

To tackle the sales bottleneck problem, the enterprise usually goes through its first big strategic transformation. The analysis goes something like this:

  • The bottleneck to growth is the needs analysis and solution design
  • How can we eliminate this bottleneck?
  • Why not eliminate the needs analysis and solution design altogether?
  • *Answer: Productize the solution!
    *

The easiest way to remove the bottleneck is to eliminate the constrained processes. Productizing the solution involves standardizing the product or service, thereby eliminating the functions of needs analysis and solution design. Commonly occurring requirements are served by standard solutions, with a bit of customization. Only high-value customers are given the luxury or personal attention, by the scarce solution designers in the company. There is obviously some amount of compromise in the match of the actual needs of the normal customer and the standard solution. However, if the demand in the market is higher than the supply, companies grow successfully by standardizing the product. The enterprise slowly transform from a solution-driven enterprise to a product-driven enterprise.

If the company gets totally involved in this phase of growth and does not give enough attention to the growing gap between the problem and the solution, this gap leads to a new pain point that some new entreprenuer recognizes and uses to start a new cycle. This phenomenon of the downfall of large companies due to a lack of disrtuptive innovation is explored beautifully by Clayton Christensen in his best-seller The Innovator’s Dilemma:

Finding new applications and markets for these new products seems to be a capability that each of these firms exhibited once, upon entry, and then apparently lost. It was as if the leading firms were held captive by their customers, enabling attacking entrant firms to topple the incumbent industry leaders each time a disruptive technology emerged.

So how does a solution-driven enterprise scale up while retaining the solution-driven approach? How does one remove the bottleneck in sales?

Sales Activities

Let us look at the solution-designer’s problem. If we measure the actual amount of time spent by a solution-designer-sales-person in utilizing the scarce skills of needs analysis and solution design, it usually adds up to a small fraction of the total available time. We did a brief survey of solution-driven companies, and asked sales persons to list out the activities they did. Here is a sample of those activities:

  1. Customer contact activities- Lead generation & capture
  2. Handle Customer enquiries
  3. Prospects for new Customers
  4. Customer Visits
  5. Phone Calls
  6. Correspondence
  7. Customer entertainment
  8. Outstation travel
  9. Arrange customer visits to reference sites or execution units
  10. Conduct demonstrations
  11. Negotiations
  12. Preparation of proposals and quotations
  13. Cost benefit analysis
  14. Comparison with competitors
  15. Solution design activities- Requirements capture
  16. Preparation of case studies
  17. Configuration/design of solution
  18. Preparation of Layouts/ Drawings/ Sketches
  19. Cost estimation
  20. Co-ordination and follow-up activities- Purchase Order follow-ups with customers
  21. Order Booking
  22. Co-ordination with distributors & agents
  23. Co-ordination with execution/manufacturing unit
  24. Order/Project Tracking
  25. Quality Checking
  26. Oversee Installation
  27. Installation Bugs / Damage / Short Supply Handling
  28. Payment follow-ups and reporting
  29. Complaint Handling
  30. Administrative activities- Weekly sales activity plan
  31. Attendance reporting
  32. Collection reporting
  33. Order documentation
  34. Expenses reporting
  35. Daily/ weekly/ monthly reporting
  36. Sales forecast
  37. Post sales analysis (Profit & Loss)
  38. Self-education activities- Keeping track of market know-how
  39. Attending seminars, presentations and meetings
  40. Attending exhibitions & road-shows
  41. Monitoring competitor activity

As this list shows, there are several activities carried out by sales persons in a solution-driven enterprise that are not related to the scarce skill of needs analysis and solution design. However, all these activities are highly inter-dependant, and are therefore typically carried out by the same sales person.

Sales Activity Management

One outcome of the observation of solution-sales sales activities is to divide the activities into separate roles, with customer contact activities being handled by field sales persons, and solution-design activities being carried out by a sales support team that can interact with the field sales force as and when required.

That is where technology plays a part. A Sales Activity Management System (SAMS) can provide a platform for structured interaction between various sales functions carried out by different persons at multiple locations.

Sales Activity Management System

A Sales Activity Management System also has other benefits such as:

  • reduce the overhead of administrative activities by reducing manual data entry,
  • provide a common communication platform, where sales persons, sales support, order execution and support personnel can interact seamlessly
  • provide a single view of all customer interactions to all concerned persons within and outside the company
  • co-ordinate tasks between various persons working on a customer project
  • provide automatic reports and analysis of sales activities so as to highlight inefficiencies in the system as pointers to process improvement

Smart Customization

The first part of the solution is to manage sales activities by dividing the activities into separate roles, and co-ordinating the activities by using a Sales Activitiy Management System. This will surely open the sales bottleneck significantly. The next level of systematization is to provide a way to automate the solution-design process itself.

There are several strategies than may work in different situations:

  1. Rule-Based Solution Design
    In many cases, it is possible to create a rule-based solution-design system. Such a system represents the solution-design logic into a set of rules that are applied to a series of questions that are asked at each stage of the solution-design process, which breaks down the needs or requirements into a set of parameters. These parameters are then used to suggest parameteric solutions.
  2. Experience Database
    In other cases where the solution-design process cannot be broken into a parameteric rule set, it may be possible to create an experience database. The process of solution-design is done manually, but the requirements and the solution is stored in the experience database. If the same or similar requirements are encountered again, the sales support person can look up the experience database to see the solution provided before, and merely tweak the solution as required.
  3. Modular Solution Configuration
    In some cases, the solution can be broken into a set of modular components. In such cases, a solution configuration system can be designed that helps the solution designer to quickly pick up modules from the component database and create a solution to match the requirements.

Conclusion

Using systems such as the Sales Activity Management System and various strategies for smart customization, a solution-driven enterprise can grow without losing its agility, and retain its innovative edge as the market gets crowded with competitive solutions and products.