Insights From CIP: Creating A Digital Supply Chain Sales Playbook

Each semester, the Mack Institute’s Collaborative Innovation Program (CIP) brings Wharton and Penn students into some of the world’s top companies to solve organizational challenges. This past semester (Spring 2022), students consulted on a diverse lineup of live business challenges in industries ranging from hospitality to crypto.

The projects offer a window into the biggest trends, opportunities, and potential pitfalls in business strategy and innovation management. In this series, we’re excerpting some of the most interesting insights and key takeaways from our student consultants’ projects.

by Jessica Chen WG’22, Masud Haq WG’23, Will Meyer WG’23, Victoria Partenope WG’22, and Ranjit Vadlamannati WG’22

Background 

Our client, Company C, is a multinational software company serving more than 437,000 customers in over 180 countries. It is a market leader in enterprise application software, providing the intelligence to bring together operational and experience data. By leveraging innovative technologies in machine learning, IoT, and advanced analytics, Company C aims to help the world run better and improve people’s lives (1).

Challenge 

Within the spectrum of digital supply chain offerings, Company C deservedly takes great pride in its Integrated Business Planning solution. Specifically, Company C has a best-of-suite digital supply chain offering. Gartner, a trusted third-party industry resource, ranks Company C as the number one firm in supply chain management (2). Gartner points out that nine out of the top twenty-five supply chains use Company C’s Integrated Business Planning solution (3). Moreover, Company C’s Integrated Business Planning Solution assists over 1,000 customers across thirty industries in planning approximately $3 billion of spend (4). However, Company C’s Integrated Business Planning competitors (e.g., Blue Yonder, E2 Open, Kinaxis, Logility, and o9 Solutions) have recently taken market share and client mindshare with custom solutions and well-produced software demos. As a result, our scope focused on Company C’s Integrated Business Planning solution. 

While Company C’s competitors hold long-term risks such as integration, scaling, product value, and total cost of ownership, client decision-makers remain increasingly partial to these bespoke Integrated Business Planning solutions. The open-mindedness of Company C to partner with the Mack Institute’s Collaborative Innovation Program to deliver an Integrated Business Planning sales playbook that will win higher conversion rates demonstrates Company C is evolving and leading for innovation. Within the sales playbook, we also provided a SWOT competitor analysis and proposed an analytical roadmap to evaluate implementation success. 

Before developing an Integrated Business Planning sales playbook to lead Company C to higher conversion rates, we needed to understand the industry, specifically macro trends and competitors, and Competitor C’s sales operations. 

“74% of IT and procurement decision-makers still use non-digital supply chain methods, and 66% are not currently assessing their global supply chain continuously. However, 88% say visibility into their supply chain is more important than two years ago.”

Industry Landscape 

Company C’s Integrated Business Planning competitors have aligned their external positioning with macro trends. The COVID-19 pandemic highlighted the need for businesses to digitalize operations and build supply chains for speed and flexibility. Interos, a specialist in supply chain research, interviewed over 900 information technology and procurement decision-makers last year. Of the survey respondents, 74% still use manual supply chain methods, and 66% are not currently assessing their global supply chain continuously (5). However, 88% say visibility into their supply chain is more important than two years ago (6). For these represented firms to transition to digital and fully observable automated supply chains, Integrated Business Planning solutions will need to deliver across three criteria:

1. Agility: Proactively and profitability sense and respond to market dynamics. 

2. Productivity: Deliver products faster. 

3. Connectivity: Unify internal relationships. 

Company C’s Integrated Business Planning competitors appear to differentiate themselves from Company C on these three criteria (see Exhibit 1 for individual competitor details): 

1. Agility: Incorporation of artificial intelligence and machine learning capabilities. 

2. Productivity: Customized features and functions based on industry. 

3. Connectivity: Faster implementation timelines. 

This external positioning resonates with Gartner, which classified all five Company C Integrated Business Planning competitors as “Leaders” or “Visionaries.” In contrast, Company C finds itself in the “Challenger” category despite its impressive customer statistics. 

Exhibit 1 

Based on client interviews, Gartner remains the first data point for established organizations (i.e., public companies or well-funded start-ups/private companies) searching for an Integrated Business Planning solution. Therefore, Company C’s Integrated Business Planning competitors receive an early advantage in the sales process. 

Sales Operations 

Company C has developed a state-of-the-art Integrated Business Planning solution on the public cloud. When implemented into a client’s operations, Company C’s Integrated Business Planning solution drives significant value, as observed through industry-leading retention rates (90%+) and easier integration into Company C’s broader digital supply chain offerings (7). However, Company C’s sales operations experience notable headwinds in the sales funnel between initial lead generation and implementation. These headwinds allow Company C’s Integrated Business Planning competitors to step in with their value propositions and convert their initial advantage into an executed contract. 

We classified these headwinds into internal and external factors. Internally, Company C Account Executives do not consistently understand the client’s problem statement and demonstrate thought leadership specific to the Integrated Business Planning solution. In addition, Company C Account Executives have trouble consistently communicating the business and financial needs to client decision-makers. 4 

Externally, clients perceive Company C as a technological laggard. Furthermore, Company C’s Integrated Business Planning solution is often the second Company C offering a client implements. In other words, Company C must overcome brand association with another Company C offering when selling a client its Integrated Business Planning solution. 

Sales Playbook 

We concluded that Company C’s Integrated Business Planning competitors have carved out a niche within Company C’s sales operations gaps. While this competitive position appears to be profitable in the short term, we focused on Company C’s opportunity to build a defensible long-term advantage. As a result, our sales playbook identified what new forms of organization and business models would be enabled by advances in technology. 

For a long time, companies have optimized their scale and scope through greater focus and specialization with “best-in-breed” solutions (i.e., Company C’s Integrated Business Planning competitors), which led to the siloed structures that comprise most enterprises today. However, silos constrain growth. When each silo in a firm has its own data and code, internal development is fragmented; it is nearly impossible for that company to build connections across the silos or with external business networks or ecosystems (8).

As society emerges from the COVID-19 pandemic, these siloed firms will compete with new digital rivals leveraging enterprise software to build companywide data pipelines that feed into algorithms meant to enhance products and services (9). As the Interos findings suggest, many traditional firms will need to adapt quickly, requiring rearchitecting the entire organization and operating model. As traditional firms look to evolve post-COVID-19 pandemic, they should avoid continuing to turn to “best-in-breed” solutions, which create deep organizational divisions within it. Instead, Company C will enable new forms of organization and business models through its one source of truth end-to-end digital supply chain offering that starts with the Integrated Business Planning solution’s user-friendly and Excel-based front-end, which clients love, and sophisticated artificial intelligence and machine learning on the back-end. 

“Silos constrain growth. When each silo in a firm has its own data and code, internal development is fragmented; it is nearly impossible for that company to build connections across the silos or with external business networks or ecosystems.”

With this opportunity in mind, we then synthesized best practices into a sales playbook for Company’s Integrated Business Planning sales organization to act on before competitors. Our sales playbook identifies Company C’s Integrated Business Planning’s ideal customer and consists of actionable recommendations across three areas (external positioning, value proposition, and scalable Account Executive best practices), which will lead to higher conversion rates (see Exhibit 2 for an overview and Final Presentation for details). 

Exhibit 2 

To continue evolving and leading for innovation, firms must constantly evaluate their competitive positions. Part of that evaluation process includes identifying weak links in the innovation process, so we included a proposed analytical roadmap as Company C adopts our sales playbook. Beyond just the sales funnel, we urge Company C to consider conversion rate differences between industry-aligned Account Executives compared to generalists. Furthermore, Account Executives can demonstrate understanding of a client’s problem statement through revenue growth per year and lifetime value metrics. Lastly, Company C’s Integrated Business Planning solution value proposition most closely aligns with established enterprises’ needs. Therefore, Company C’s Integrated Business Planning solution wallet share of a client’s supply chain spend will help Company C understand what upside exists to cross-sell and up-sell Company C’s suite of digital supply chain offerings and build out the one source of truth end-to-end solution traditional firms need to compete with digital rivals. 

Conclusion 

Given Company C’s Integrated Business Planning competitors continue to scale, Company C must channel its open-mindedness into implementation. A successful transition to a client-centric positioning paired with a unified cloud-first partner value proposition and educating Account Executives will unleash Company C and client growth. Moreover, Company C will add another chapter to its history of evolving and leading for innovation.

References