Business enthusiasts often find themselves navigating through a sea of how-tos, success and failure stories, and case studies, each offering valuable insights for growth and innovation. Understanding this continual search for knowledge and practical wisdom, CLARITY is set to introduce a series of case study articles.
These pieces are crafted not just to tell stories, but to serve as comprehensive guides for growth-minded professionals. With an approach that balances informative content with engaging narratives, these articles promise to be a valuable asset for anyone looking to wisely expand their business horizons.
Content
Introducing Manufacturing Giant
By launching this series of case studies, we aim to delve into and shed light on the complex factors driving business growth and success. It’s essential to focus on organizations that haven’t just survived but have also set standards and led the way in their industries. One such exemplary tale is that of an international giant, a notable player in steel manufacturing. Standing tall in Ukraine and extending its influence across the globe, this company embodies the power of strategic foresight and relentless pursuit of excellence. For confidentiality reasons, we won’t disclose the name of the manufacturer, but their story illustrates the importance of strong leadership and dedication to quality.
This multi-billion revenue company, with offices spanning across 17 locations, including the UK, Italy, Bulgaria, Turkey, and Lebanon, has secured a position among the top five steel producers worldwide. Its reach and annual revenue of $18 billion in 2021 reflect its robust market presence. As a giant working with 7,000 B2B customers, the company’s story is one of immense growth and influence in the steel industry.
Challenges and Need for Transformation
Despite its significant achievements and international reach, the company faced several critical challenges within its sales department that necessitated a comprehensive transformation:
- Complexity of Product Offerings: The company’s products, with over 15 million variables each, created a highly complex sales environment. The lack of a unified product catalog led to a disjointed and inefficient process, slowing down response times and affecting customer service.
- Lengthy Employee Onboarding: The technical nature of the existing systems resulted in a steep learning curve for new employees. Often requiring more than six months to become fully productive, this lengthy onboarding process delayed the effective contribution of new staff to the company.
- Uncontrolled Discounting Practices: The absence of standardized pricing and discounting guidelines allowed for arbitrary discount decisions by sales representatives. This lack of control not only resulted in potential revenue losses but also threatened to undermine the company’s market position and profitability.
Recognizing these multifaceted issues, there was an acknowledgment of the urgent need for transformation. The company understood the complexities involved in streamlining heavy industry sales processes, especially given the challenging statistics around CRM implementations (more than 70% of CRM implementations fail because of non-technology factors). They were mindful of the subtle yet significant factors that often lead to less than successful deployments, focusing on ensuring robust people management, strategic alignment, and well-designed business processes to avoid common pitfalls and enhance efficiency. With this in mind, a journey was embarked upon to redefine sales strategy, revamp technological infrastructure, and align the workforce with the new direction.
This was not just about adopting new technology but about a comprehensive overhaul of their sales approach, systems, and culture. The manufacturing giant understood that to maintain its competitive edge and market leadership, it needed to streamline its operations, enhance its sales productivity, and create a more intuitive, efficient, and integrated environment for its employees and customers. The need for transformation was clear, and the path forward, though challenging, was set with a strategic vision to guide the way.
Strategy for Digital Transformation
In response to the intricate challenges it faced, a strategic blueprint for digital transformation, known as the “Stable Island” approach, was crafted. This strategy was not a rush towards indiscriminate innovation but a methodical, phased implementation of digital solutions.
Instead of overhauling their entire system at once, which could lead to significant disruption and potential failure, they opted for a step-by-step transformation. This approach allowed them to focus on creating stable, functional components or ‘islands’ before expanding to the next set of challenges. Each phase was meticulously planned and executed, ensuring that the company could adapt, learn, and refine its strategies in real-time, significantly reducing the risks associated with large-scale digital transformations.
The manufacturer’s approach included a thorough analysis and reevaluation of its existing operations, recognizing that the key to overcoming its challenges lay in business process optimization. The company acknowledged that while technology was a crucial component, a simultaneous shift in mindset and culture was essential for true transformation. They embarked on a journey to not only upgrade their technological tools but also to enhance the skills and approaches of their workforce. This holistic approach aimed to align the company’s people, processes, and technology towards a common goal of increased efficiency and productivity.
Central to this strategy was the selection of the right technologies and partners. The company was acutely aware of the need for robust, scalable, and flexible solutions that could adapt to their complex and evolving needs. They also recognized the importance of partnering with vendors and consultants who understood their vision and could guide them through this transformation journey. The choice of SAP and other leading technologies was a testament to their commitment to quality, reliability, and innovation.
Furthermore, the “Stable Island” strategy was not just about implementing new systems but also about preparing the organization for the change. The manufacturer invested in training and development, ensuring that their employees were not just aware of the new tools but were also equipped to use them effectively. They understood that employee buy-in was crucial for the success of any digital transformation initiative.
Implementation and Solutions
The journey towards a sweeping digital transformation began with the strategic adoption of SAP solutions, underscoring its commitment to utilizing leading technology to advance its business. The implementation process, characterized by meticulous planning and execution, was pivotal in ensuring a smooth and efficient transition.
To ensure the success of SAP’s solutions, the manufacturing giant partnered with CLARITY, recognized for their expertise in the quote-to-cash domain. This collaboration was essential in the effective implementation of various SAP tools.
Methodical Approach and Phased Execution. Throughout the implementation, it was ensured that each phase was manageable and aligned with the company’s broader strategic vision. This approach minimized disruption and facilitated a seamless transition for all involved. The implementation was conducted in multiple phases, with some occurring concurrently. This method allowed for prioritizing business requests, helping the teams understand the holistic picture and shape the overall solution.
Collaborative Efforts and Communication. At peak times, up to 40 individuals from each side – CLARITY and the manufacturer – worked collaboratively, addressing technical and business requirements and overseeing development orchestration. Regular daily and weekly meetings ensured ongoing dialogue about current tasks and strategic planning. Governance calls with company leaders, including SAP, guaranteed alignment at all project levels.
Major Achievements and Process Overhauls. This careful planning and execution were crucial in minimizing disruption during the implementation process. As a result, the project was completed in less than 2 years, achieving significant milestones such as fully automated calculation of quote prices, quick and transparent quote approval flows, generation of personalized proposals, and the creation of a unified product catalog. This development streamlined over 15 million product variables, enhancing the efficiency and accuracy of the sales process. A crucial focus was the overhaul of the cumbersome and unintuitive sales system. The manufacturer redefined the sales workflow and integrated more intuitive tools, significantly improving the sales team’s productivity and the customer experience.
Throughout the implementation, the company ensured that each phase was manageable and aligned with the broader strategic vision of the company. This careful planning and execution were crucial in minimizing disruption and ensuring a smooth transition for all stakeholders involved.
Software Solutions
The transformation process was powered by a comprehensive suite of SAP tools, each playing a vital role in reshaping the company’s operations. The selection included robust solutions like SAP Sales Cloud and SAP Service Cloud, SAP Configure Price Quote, SAP Cloud Platform Integration, and SAP S/4HANA. These advanced systems were the backbone of the transformation, driving efficiency and user-friendliness while catering to the intricate requirements of the company’s operations.
The integration of these tools facilitated a more unified and streamlined workflow, enhancing the overall functionality and responsiveness of the system. By leveraging this powerful technology stack, the manufacturer was able to address its operational complexities with sophisticated solutions, setting a new standard for efficiency and integration in its processes.
Results and Impact
The digital transformation in the company has catalyzed a series of significant changes, leading to enhanced operational efficiency and a transformative shift in the steel production industry:
- Unified Product Catalog: The creation of a unified product catalog marked a fundamental change in the sales, production, and delivery chain. This crucial development not only simplified internal workflows but also contributed to revenue growth in manufacturing by offering customers a more coherent and dependable service.
- Optimized Sales Processes: By digitizing and optimizing its sales processes, the company drastically cut response times and simplified offer preparation. Moving from non-intuitive systems to a centralized, user-friendly approach has significantly reduced errors throughout the process, enhancing the overall efficiency and reliability of operations.
- Seamless System Integration: The integration of cloud-based CRM and CPQ systems with the overarching ERP framework was a critical milestone in the transformation. This integration facilitated seamless information flow across various departments, significantly boosting efficiency and reducing the margin for error. Departments that previously operated in isolation now benefit from a synchronized system, enhancing the company’s ability to respond swiftly and accurately to both internal and external demands.
- Enhanced Sales Productivity: The transformation’s most visible outcome was evident within the sales team. The introduction of a more intuitive system significantly facilitated sales productivity improvement. Employees found it easier to navigate, comprehend, and sell products, which translated into a higher adoption rate of the new systems. Consequently, there was a noticeable rise in order placements and opportunity wins. Although specific figures on revenue increases cannot be disclosed, the substantial multi-digit growth coupled with high adoption rates and improved operations, clearly demonstrates the positive impact of the transformation on the company’s performance.
Future Plans and Strategic Goals
The roadmap for the future is deeply rooted in a commitment to continuous digitalization and innovation in steel production. The company is actively seeking to broaden its digital strategy in manufacturing, moving beyond its current successes. A central component of its upcoming initiatives is the creation of a customer portal, poised to transform order placements into a fully digital, seamless experience.
This portal is designed to be intuitive and user-friendly, enabling customers to place orders with ease. Once an order is placed, it automatically triggers a series of internal processes, ensuring that every necessary action within the manufacturer’s sales solutions is activated promptly. This automated system is designed to significantly reduce response times and expedite the sale process, allowing for products to be sold as swiftly as possible after a request is placed. While this innovative solution has been implemented in select locations, the company plans to extend the platform’s reach to other territories and market units, further streamlining the order process and enhancing customer satisfaction across the board.
Moreover, the manufacturing giant is dedicated to integrating cutting-edge technologies like AI and automation into its operational framework. The adoption of these advanced technologies is set to drive even higher efficiencies, minimize the need for manual input, and speed up various aspects of the manufacturing process, reinforcing the company’s position at the forefront of innovation in the industry.
The Bottom Line
The above-mentioned experience stands as a compelling illustration of the steel industry’s digital transformation. By acknowledging their unique challenges and methodically tackling them with a blend of technological and process improvements, they’ve established a standard for others in the sector. Their narrative goes beyond mere technology adoption; it’s about a holistic approach to change, considering people, processes, and technology to create a more efficient, responsive, and successful organization.