The global Spend Analysis industry had experienced relatively rapid growth
over the last few years. Spend analysis was once the near-exclusive domain of
smaller, specialty solution providers like BPS. However, during the past several
years, several large software and consulting firms, including SAP and Accenture,
have entered the market, leading to consolidation among smaller firms.
BPS, a publicly traded firm with $95 in annual sales, founded in 1997 to take
advantage of the nascent popularity of spend analysis or spend management, and
analysis methods and tools, was considered an early mover in the field. BPS
helped its customers reduce their procurement costs and improve the
performance of their suppliers. The work involves firstly scrutinizing customers'
spending categories through a combination of software, data analysis, project
management, and consulting. And, then identify the sources of potential savings
through initiatives such as supplier consolidation and purchase standardization.
Finally, the implementation of procurement and change-management projects to
realize those savings.
Alternatives
Status Quo :
In the status quo, we analyzed the various
factors like Request process time, avg
request inter arrival time, capacity per year,
through put, capacity utilization, request
wait time, total process time etc. (Refer
Annexure 1). Then we realized the bottle
neck was created in the waiting time of
each request to be processed. This was
almost around 24.82 hours (Wt avg of
18.97, 18.13, 17.60, 56.85). Hence the
various alternatives were evaluated based
on Request Wait time primarily.
The various alternatives that we have got are :
1. Cross Training (Dropping industry focused approach for sale support
team)
2. Fully Industry Centric organization
3. Reorganizing proposal support by type of sales
request wait time, which was almost 6.44 hours in the proposal support stage
(Refer Annexure 2). The cost incurred to do the cross training will be $6058
approx (=(105000/52)*3)
Limitations:
Team members need to remain in each role for 3 months at the least to
stay effective
USP of BPS by offering individual expertise in every industry is lost. Team
members become generalists from being
experts in one particular sector.
Proposed Solution:
Based on the 3 options listed above, we are proposing that BPS should go for
Option 1 of Cross training the sales support team and dissolve the industry focus
structure as it results in the maximum reduction of the request wait time. The
cost of cross training is also less. Even though the firm might lose out on the USP
of individual expertise in each industry, the revenues and turnaround time for
each project will reduce. This will result in the firm remaining competitive. One
major constraint that the firm needs to watch out for is that since people working
in each industry of the proposal team hail from different firms, the team
dynamics need to be cultivated with care. Further Steps
Hire 3 more heads for further reduction in the request wait time from 6.44
hours to 3.61 hours.
Streamline the solution selling process by training and coming up with
generic frameworks for faster turnaround time. It will also reduce the
standard deviation for processing requests