Hewlett Packard-Computer Systems Organization:

Selling to Enterprise Customers

Submitted by

Team 2
Bharat Arava(13pgp010)
Monika Sakkarwal(13pgp031)
Piyush Mohit(13pgp042)
Rajendra Shahane(13pgp050)
Shreesti Rastogi(13pgp054)
Aniruddh Mukerji(13pgp063)

Kunal Kumar(13pgp088)
Sumit Ranjan(13pgp113)
Ashish Mehta(13pgp126)
Samkit Jain(12pgp112)
Rajakumar r b (11pgp032)

Introduction
Founded in 1939 by Bill Hewlett and Dave Packard
Engineering Driven Firm
Competing on the basis of technological features
No savvy marketing.
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Indian Institute of Management Raipur

05-12-2014

Timelines
Robust Sales and Long life
cycles. Higher prices on the
basis of strong product
features and superior
reliability

1980

1992
HP was stuck in the down
and middle stream business
segment. Diaz look for new
ways to reduce costs in sales
and support

While HP had an enormous

success with RISC-based
products, Manuel Diaz was
working on a new sales
approach

1996

Latest

Diaz undertakes Robert

Dudley from Leap
Consulting to solve the
problem

Case Facts
HP selling costs are higher than the industry average.

The compensation plan is short term

Increasing pressure on the Representative who are not effectively

monitoring the process.
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HP sellers are not business developers but just order takers.

There is a severe need for cost reduction.

The amendments that the company intends to make for cost

reduction, should not erode the brand equity.
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Sales Process Audit Stages

Customer-in perspective on the purchasing process and buying
values of HPs enterprise.
Accurate documentation of the sales processes currently executed by
HPs sales force and analysis of the productivity
Identification of potential breakthrough paths at the field and
headquarters levels
Initiation of both fast-start and long term productivity improvement
actions by the sales teams involved in the study
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Indian Institute of Management Raipur

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Findings
Doing well in capturing downstream business and increasing
midstream business.

Migration strategy causing trouble.

Modification in requisite critical success factors in moving from

managing downstream to upstream.
Need to prioritize opportunities and choose Projects based on their
potential and Competency
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Q1)Is this the time for

HP-CSO to institute
more changes?
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HPs current sales strategy and sales process did not optimize the
total sales opportunity from the customer
Sales regions were measured as cost centres. Sales force
concentrated on achieving sales target without worrying about
making profits and spending time in non-core activities
Selling efforts in the enterprise customer segment specially selling
costs was very high as 30 cents to every order dollar in 1990

HP Employees spent more time trying to sell inside HP than to its

customers

80% of the customer sales were initiated by the customer

themselves
Indian Institute of Management Raipur

05-12-2014

Although HP was a preferred vendor, customers doubted its ability

to deliver in case of Innovation projects
Customers were moving towards consolidating their supplier base
increasing pricing pressure on HP
The sales process (specially the qualifying and post-sales servicing
steps) had enormous time drains

Sales force was having difficulty in converting sales opportunities in

replacement and expansion projects
Sales team was spending less time in the early stages of the sales
cycle for Innovation projects
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Sales team lacked prioritization of opportunities for Innovative

projects
HP was not good at transferring knowledge from one opportunity to
another
Much emphasis was on how to run faster and just sell boxes than to
move up the relationship curve
replacement sales were often extremely expensive, involving
significant price concessions up front
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Q2) Would benefits

outweigh the cost of
Implementation?
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Based on customer portfolio management and alignment with

resources.
Greater sales volumes due to specialised sales force.
Optimised returns to sales efforts.
Superior value delivered at every stage
Greater insight into customer buying behaviour.
Creation of platform for long standing relationships.
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Indian Institute of Management Raipur

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Training cost of sales force

Loss of Enterprise customers and time to get them back

Overburdening of sales force and hence loss of motivation

Cost of researching into the requirements of the customer

organisations
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Q3) Why does HP treat

Sales force as cost center
and
what
are
its
implications?
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Sales force as cost center

Regrouping of divisions within HP with each group having its own
sales force

Sales force- responsible for revenues, field marketing and customer

service

HP focused on additional profits, making sales force strive hard to

increase number of orders
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Indian Institute of Management Raipur

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Implication
Sales force can concentrate on the achieving sales target without
thinking about making profits for itself
Need not spend time in non-core activities

Pressure on sales force to cut cost, bring down its numbers

Added pressure on individuals to perform & deliver

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Q4)

What

were

the

advantages and disadvantages

of the new structure?
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Advantages
Improved segmentation - facilitates better targeting

Competition among divisions improve performance

Better control as each division can act as separate profit centre .

This decentralizes decision making and provides accountability.
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Indian Institute of Management Raipur

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Disadvantages
Duplication of functions would add redundancy and drop efficiency

Too much competition can blur long term vision for overall
profitability
Decentralization can loosen the grip of higher management on
different aspects of the companies decision making
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Recommendations
Standardized process for downstream purchases

Automated ordering systems to reduce unproductive time

Collaboration with customers to implement online ordering portals

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Educate & encourage customers to use tech support executives

instead of sales reps for problem solving

CRM application will facilitate knowledge and information transfer

about the customer within the various departments of HP

Train the tech support executives to leverage CRM for cross selling
of the products

Form collaborative partnerships with tech consulting firms to

capture innovation opportunities
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Thank You

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Indian Institute of Management Raipur

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