Sales Management Case Analysis; A.T.

Sales Management Case Analysis; A.T. Kearney Acquired by EDS

Assessing the spectrum of sales management strategies that EDS can choose to pursue after the acquisition of A.T. Kearney illustrates how a merger can contribute significantly greater profits and growth or serve as a major distraction. EDS found in A.T. Kearney the strategic consultancy skills it lacked in their own Management Consulting Services (MCS) which were needed to scale that business out being purely technology-centric to being more capable of contributing to enterprise-wide transformation initiatives. EDS had built by 1995 a $3.4B global enterprise that was a leader in information technology outsourcing. The company's focus on systems development, systems integration, systems management and process management had led the company to a leadership position in its served market segments. Like A.T. Kearney, EDS experienced relatively high levels of customer retention with 70% of their revenues from existing customers. A.T. Kearney generated 75% of revenues from exiting customers as well.

Defining the Sales Management Strategy

EDS' acquisition of A.T. Kearney was initially seen as being able to offer a "one stop shop" for redefining and augmenting a company's IT strategies through more effective process management and business process improvement strategies. This however as a sales strategy lacks enough focus to make the most of the innate strengths and expertise of A.T. Kearney and also potentially puts its credibility at risk. Practice leaders and key contributors in A.T. Kearney feared their credibility would be potentially damaged by being politically pressured to only recommend solutions and strategies that made EDS the obvious choice for clients. A.T. Kearney realized that the credibility and trust they had with their customer base and with the broader industry was one of their most valued assets; the role of the trusted advisor was essential to their winning business (Buchen, 2001). This aspect of the sales management and broader marketing strategies, and how trust would be retained with existing A.T. Kearney and EDS customers was a critical component of the acquisition.

From the analysis of the case, the best possible marketing strategy is to seek out new enterprise-wide transformation initiatives that require both strategic insight and consultancy-based analysis that the combined MCS/A.T. Kearney can deliver, bringing in the extensive capabilities of EDS for business process re-engineering and related IT realignment. MCS / A.T. Kearney acting as the catalyst for re-defining the EDS value proposition would also be necessary. EDS in effect would have to realign itself with the value proposition of being a global leader in transformation initiatives, and this would force their IT-based culture to significantly shift over time. Yet for EDS to profitably grow they would need to use the extensive capabilities of MCS / A.T. Kearney to upsell their customer base over time and gain increasingly larger share of these accounts.

The selection of the sales strategy of having MCS/A.T. Kearney take the lead in selling into new accounts who needed transformational initiatives, which often meant a complete re-aligning of their value chains, supply chains and core competencies, complimented by process reengineering, also opened up opportunities for EDS' strongest businesses to contribute as well. This sales strategy requires a highly collaborative approach to integrating the consultancy strengths of MCS/A.T. Kearney and the IT and process execution expertise of EDS. Sales management strategies have become increasingly cross-functional in process to reflect the complexity and variation of needs within enterprise customers (Storbacka, Ryals, Davies, Nenonen, 2009). A sales management strategy that sought this level of integration between MCS/A.T. Kearney and EDS would also provide EDS' customer base with the option of also partnering with the company for transformational initiatives support. From the EDS perspective, this is an excellent upsell strategy to expand their sales and service in existing accounts. From a competitive standpoint, only IBM at the time had this breadth of expertise. The consultancy business within IBM however had been seen as promoting those solutions that would benefit the services and hardware divisions, a strategy that had potentially harmed their credibility. By keeping MCS/A.T. Kearney separate, EDS was doing its best to mitigate the appearance of their consultancy only favoring their own solutions. This decision would prove fortuitous in that the MCS/A.T. Kearney merger was better managed at the consultancy, not at the overarching strategic level in EDS. By isolating MCS/A.T. Kearney both companies were able to define organizational structures that would enable efficient execution of sales management strategies. As sales strategies increase in complexity the role of organizational structure is a strategic one that must be evaluated (Le Meunier-FitzHugh, Piercy, 2008). As the case study shows, one year after the acquisition the combined division is making significant contributions including serving as a catalyst for $1.4B in new projects for EDS. This specifically shows how the aligning of organizational structures and cultures is critical to the success of a merger, especially in an area as time- and resource-driven as enterprise and strategies sales.

In assessing and approaching new accounts that were working on transformational initiatives, MCS/A.T. Kearney needs to first focus on the industries they have the greatest expertise in. For A.T. Kearney these include manufacturing, consumer products, transportation, chemicals and pharmacy. For MCS, communications and electronics industries are the strongest industries. Targeting new opportunities in each of these segments by finding corporations who are seeking transformational initiatives to regain their value chain, supply chain, manufacturing or financial performance, and the combined team of MCS / A.T. Kearney has the depth of expertise to be trusted advisors (Buchen, 2001) to the senior management teams of these organizations. As a result of the depth of expertise and insight by each of these industries, the sales teams of MCS / A.T. Kearney could quickly earn credibility and also provide immediate value even during the sales process by offering suggestions from their analysis prior to meeting with senior executives. As transformational initiatives are outsourced only to those firms which have innate knowledge and appreciate the nuances of one company in an industry to another, bringing this industry expertise to the forefront is critical. For each individual prospect, the teams from MCS / A.T. Kearney would do a thorough analysis of their current condition, including the areas where it is clear transformational initiatives are needed. From this initial analysis the teams would meet with senior management and discuss how their longer-range plans and objectives can be met through the use of the MCS / A.T. Kearney insights and industry expertise. Throughout this sales process the objective of tailoring all deliverables to prospects and clients to provide solid evidence of the company's ability to deliver exceptional value based on industry expertise is critical. For MCS / A.T. Kearney to be successful with this strategy they must emerged as the trusted advisor to prospects and customers alike (Buchen, 2001).