CASE: M-311

DATE: 11/5/05

IMPLEMENTING SALES FORCE AUTOMATION

AT QUANTIUM TECHNOLOGY1

It was April 2004, and Anne Rothman, the new Executive Vice President of Global Sales at
Quantium Technology, pondered all that she had learned in her first month on the job. Although
she had come into this top-tier technology firm from the outside, she had already identified what
she felt was one of the organization’s biggest challenges: sales force automation (SFA).
Quantium had purchased and implemented Siebel Sales, an SFA software solution, in 2002, two
years prior to Rothman’s arrival at the company. However, there were numerous problems with
the implementation of the SFA program, and now the system was creating more problems than it
was solving. Sales representatives were abandoning the system, sales managers were
complaining that the sales pipeline data in the system were not accurate, and the system did not
appear to be increasing win rates or shortening the sales cycle as expected. Rothman knew that a
key first step in her tenure was to decide how to resolve the problems with the SFA
implementation, which meant either fixing the system or deserting the project altogether.

QUANTIUM TECHNOLOGY

Quantium Technology was an innovative technology company that provided computer hardware
and software for large enterprises. The company was founded in 1989, and had grown to
become a leading provider of enterprise servers and specialized workstations. These servers and
workstations were large-scale computers used to run web sites and business applications. The
servers were known for their reliability and security, and were designed for sophisticated users to
build networks.

1
Quantium Technology is a completely fictional company, and all Quantium employees are fictional people,
created to illustrate a business situation. Any resemblance to an existing company is completely coincidental.

Dana Nunn prepared this case under the supervision of Professors James Lattin and Mark Leslie as the basis for
class discussion rather than to illustrate either effective or ineffective handling of an administrative situation.

Copyright © 2005 by the Board of Trustees of the Leland Stanford Junior University. All rights reserved. To order
copies or request permission to reproduce materials, e-mail the Case Writing Office at: cwo@gsb.stanford.edu or
write: Case Writing Office, Stanford Graduate School of Business, 518 Memorial Way, Stanford University,
Stanford, CA 94305-5015. No part of this publication may be reproduced, stored in a retrieval system, used in a
spreadsheet, or transmitted in any form or by any means –– electronic, mechanical, photocopying, recording, or
otherwise –– without the permission of the Stanford Graduate School of Business.
Sales Force Automation at Quantium Technology M-311 p.2

The server market as a whole had prospered during the Internet boom years of the mid- to late-
1990s, when customers bought servers to build websites and roll out enterprise software
applications. But by the late 1990s and early 2000s, the server market was suffering, as the
Internet bust and the dawning recession curtailed customers’ appetites for servers. Quantium
faced strong competition from large industry players such as Dell Computer, IBM, Hewlett-
Packard and Sun Microsystems. In particular, several of these competitors were highly
successful at “solution selling,” a consultative selling process that focused on solving a
customer’s business problems and selling a total solution, including hardware, software and
services.

Quantium’s historical revenues and profits illustrated how closely the company was historically
tied to the success and decline of the Internet and “dot-com” companies. In 2000, at the height
of the Internet boom, Quantium had revenues of more than $3.6 billion and 9,600 employees. In
2003, Quantum's revenues had fallen to $2.25 billion, and the company employed about 7,000
(see Exhibit 1). Quantium was an enormous beneficiary of the dot-com boom, but struggled
after the bust and the recession.

Quantium’s Sales Organization

Quantium’s global sales organization was made up of about 2,000 quota-bearing sales
representatives around the globe. The sales reps were grouped geographically, with a Vice
President managing each of four key regional markets: the United States; Europe, Middle East
and Africa (EMEA); the Americas; and Asia Pacific (APAC). Each VP operated his region as a
business unit, overseeing industry-focused reps, product-focused reps, and account-specific reps.
See Exhibit 2.

Sales reps called Client Executives were the account owners for large global customers who
warranted dedicated account teams. The Client Executives would manage all client needs,
pulling in product and industry specialists as needed. Other sales reps owned specific product
lines, such as high-speed servers or stand-alone workstations, and sold these technologies to a
broad range of customers. Lastly, industry-focused sales reps were experts in particular industry
verticals, such as financial services or health care, and sold the entire Quantium product line into
these industries. The product and industry reps were assigned geographic territories, and were
expected to work together as a sales team when necessary to maximize sales revenue. On
average, each sales rep had a $2 million annual sales goal, although there were wide differences
among representatives

Sales reps relied on other Quantium resources throughout the sales cycle. Sales Engineers
provided technical product support during the sales process, helping to educate the customer and
understand their technology needs in more detail. Quantium Sales also interacted with the
company’s large professional services organization, which was responsible for implementing the
projects after completion of the product sale. Professional services were increasingly part of the
solutions that Quantium reps were trying to sell.

Eric Mather, Rothman’s predecessor, ran the Quantium sales organization from 1993 to 2004,
and built it from a small sales team to a large global organization. Mather had spent his entire
career in technology sales, starting as an inside sales rep for a software company in the 1980s.
Sales Force Automation at Quantium Technology M-311 p.3

Mather was widely credited with growing the Quantium sales organization and generating the
company’s success in the technology boom era from the mid-1990s through 1999. However, as
Quantium struggled during the bust, Mather’s relationships with the rest of the management team
deteriorated. His organization consistently failed to meet sales quotas, and Mather seemed to
lack the skills and the tools to get the team back on track. Mather ended up leaving Quantium at
the end of 2003, and subsequently surfaced at a competing technology firm. Rothman was
brought in from a niche player in the workstation market, where she had served as VP of Sales
for two years. Her background included senior roles in both sales and marketing for numerous
technology firms.

Sales Challenges

Quantium faced an increasingly difficult sales environment for its products after the market
slow-down. The market environment and sales approach were changing, and internal sales
processes seemed to be broken in places. Sales reps were simply not meeting quotas, and sales
managers were frustrated with their lack of insight into the organization.

The Internet bust had reduced the sizzling demand for Quantium’s products. More broadly,
competitors had commoditized the server market by offering much cheaper servers that were
closing the performance gap. Sales reps needed to increase margins by elevating deals from the
IT manager to the CIO. The new, bigger deals were focused on relationships and solving
customer’s business problems. This “solution selling” involved multiple lines of business at the
customer, and led to a longer sales cycle. One sales manager, formerly a sales rep, discussed the
new challenges:

We moved from being a product company to being a solutions company. We

needed to shift away from talking about technical features. The sales reps had to
focus on business issues and business problems, and solve some of Mr.
Customer’s pain points by bringing in the right resources. In evolving, that’s a
hard adjustment for the reps.

Quantium sales representatives were fiercely independent and tended to be a little bit on the wild
side (they were sometimes referred to as “cowboys” throughout the rest of the company). The
sales organization itself seemed to be process-averse, and one-off sales methodologies were
common. The team selling approach advocated at Quantium to keep all of the account, product,
and industry sales reps working together was not always successful. One customer, a
pharmaceutical company, reported that a product-focused Quantium rep responsible for a
specific line of workstations contacted them just a few weeks after they had begun discussions
about a workstation solution with a health care industry specialist from Quantium. The resulting
confusion had caused Quantium to lose the deal to a competitor.

Sales managers and company executives complained that they did not have reliable information
on the company’s sales pipeline. The sales organization used an internally developed,
spreadsheet-based tool for forecasting, and filled it primarily with anecdotal data from ongoing
deals gleaned through conversations with sales reps. Sales managers at Quantium were also
frustrated with the loss of valuable customer data every time a sales rep left the company.
Sales Force Automation at Quantium Technology M-311 p.4

REVIEW OF SFA PROJECT

Rothman had heard rumors and off-hand comments during her first week at Quantium that
signaled dissatisfaction with the SFA solution. She decided to meet individually with the key
people involved in the implementation to retrace the steps of the SFA project.

Project Origin

Rothman started by interviewing the two key sales managers who had initiated the drive for SFA
at Quantium, Geena Silver and Nick Rosseter. Silver told Rothman:

We wanted a lot of things, and we thought SFA could help. Our internal
forecasting tool was worthless to managers, as it never seemed to have accurate
information about the current pipeline. We needed a better way to track what the
sales reps were doing every day. We were also tired of losing all of our customer
data every time we lost a sales rep to turnover. The miscommunication between
different types of sales reps on the same accounts was escalating, and we needed a
way to fix the selling process. Some of our competitors already had SFA tools.
At the time, Mather was not convinced that we needed sophisticated tools, but he
worried that we would start to lose ground on tough accounts. We finally
convinced him to give SFA a shot.

Silver and Rosseter were responsible for identifying the best SFA solution. They quickly zeroed
honed in on Siebel, based on its reputation as the clear leader in CRM software.

SIEBEL

Siebel Systems, Inc. was founded in 1993 and had grown to become the leader in Customer
Relationship Management (CRM) enterprise software. For the fiscal year ending December 31,
2003, Siebel had revenues of more than $1.35 billion and an operating loss of $33.7 million.
Siebel forecast that by 2004 there would be more than 2.8 million employees at 4,000
organizations using Siebel software products. Siebel customers included Bank of America,
British Telecom, Deutsche Bank, DHL, HP, IBM, and Microsoft, each with thousands of
licensed users. Industry analysts reported that Siebel was “positioned as the best-of-breed CRM
provider to large enterprises.”2

CRM and SFA

CRM solutions provided tools for companies to automate and integrate business processes in
marketing, sales, and service. SFA was the origin and core of many CRM applications, which
provided sales representatives and sales managers with tools to automate their workflow across
the entire sales process. SFA tools included everything from scripts for prospecting and tools for
collaboration, to contact management systems and centralized customer databases, to analytical
tools for sales forecasting and pipeline management (see Exhibit 3).

2
Seth Fineberg. Accounting Technology. “Going Downscale: Siebel pushes its CRM product into the SMB
market.” Boston: Spring 2004. p. 12, 2 pgs.
Sales Force Automation at Quantium Technology M-311 p.5

Two key elements of SFA were opportunity management and sales forecasting. Opportunity
management tools provided a single location for sales representatives to enter all deal-related
information, which centralized customer information across the company. Sales forecasting
tools were another important feature of SFA applications. These tools gave sales managers and
executives insight and visibility into the sales pipeline, and helped eliminate revenue surprises.
SFA solutions also gave global sales organizations a common language, and standardized sales
processes.

For example, when a sales representative at a company used an SFA program to manage a deal,
he began by entering all contact data on the prospect into the centralized SFA contact database.
He would then track the deal using an opportunity management tool by entering information
such as the source of the lead, the competitors involved, and the products of interest. He could
use templates from the application to build quotes and proposals. Throughout the deal, he would
track the probability of deal success in the forecasting tool, allowing his manager to see the
likely impact of the deal on revenue targets. When he closed the deal, he would record the final
deal statistics in the SFA tool, contributing to the win rates and other analytics in the manager’s
view. Along the way, the tool would provide various levels of process help and sales
methodology.

Product Capabilities

Siebel’s flagship product, Siebel Enterprise, was a client-server application that was very robust
and highly customizable. Siebel categorized its CRM products into four core areas: Sales,
Marketing, Service, and Partner Management. Siebel Sales provided a rich set of tools and
methodologies for structuring the sales process, and included strong analytics package for sales
managers. The application supported the sales process with built-in, proprietary sales
methodologies that helped reps structure their selling process, identify business needs and
manage target accounts.

The Siebel Sales application had functionality to advance five key objectives. To enable
Pipeline Visibility, the application provided sales reps and managers with a picture of each sales
opportunity, as well as forecasting and pipeline analysis capabilities. Sales Effectiveness was
supported through a contact management system for customer profiles, and applications to
generate quotes, proposals and presentations. To achieve Motivation and Focus, Siebel Sales
had tools to help design quota plans, incentive plans, and compensation plans, as well as tools to
assign opportunities to the right sales reps. An Analytics engine provided a dashboard for
managers and executives to view data on the sales process. Lastly, the system provided Best
Practices by supporting several popular and proprietary sales methodologies, such as Siebel
Target Account Selling, and Siebel Enterprise Selling Process. Exhibit 4 lists more detailed
examples of these features.

Silver and Rosseter were persuaded. Quantium purchased 2,000 licenses for Siebel Sales at a
cost of about $3.5 million, and began implementation in March 2002.
Sales Force Automation at Quantium Technology M-311 p.6

Information Technology

Rothman learned that Mather tasked Jacob Tate, Director for IT Special Projects at Quantium,
with managing the Siebel Sales implementation. Tate built a project team of IT specialists who
would interact with Siebel consultants as they scoped out business processes, built the IT
infrastructure to support the software, and delivered the product to the sales force. Tate was
able to assign two Quantium IT team members to the project full time, but he also enlisted the
help of Tactical Consulting, a prominent IT consulting firm and systems integrator, to provide
additional resources and expertise. Tactical Consulting provided three full-time consultants,
who had previous experience implementing Siebel Sales solutions. The team’s plan was to
have the SFA solution ready to introduce to the field by July.

Tate discussed the initial rollout plan with Rothman:

The IT project team debated internally over whether to roll out Siebel Sales to the
field sales reps all at once or one region at a time. Some members of the team,
including the Siebel consultants, felt that a regional pilot of the core functionality
would provide an opportunity to test the system, and build expertise in its use.
However, I wanted us to have a chance to meet our summer deadline, and I was
reluctant to tie up significant IT resources for a long, phased rollout while other
important IT projects waited on the sidelines. We also had sales managers in
every region screaming for the SFA pipeline tools, and it would have been
politically very difficult to prioritize a rollout schedule. I decided that the best
solution was to implement the system as quickly as possible, rolling it out to the
entire sales force at once.

Tate initially planned to rely on the robust out-of-the box Siebel functionality, and to “stay
vanilla” rather than customizing the product extensively. However, Tate reported to Rothman,
the Tactical consultants conducted an extensive product evaluation and identified a list of 25
features that should be customized to better meet Quantium’s needs. He gave Rothman some
examples:

They felt that the analytics dashboard through which managers viewed pipeline
and forecast data could be improved with a look and feel customized to
Quantium. They also wanted to make changes to the standard pricing and
configuration modules to represent the complexities of our product line.

The Siebel consultants resisted these customizations, as they believed that the standard Siebel
product could implement the desired functionality, but Tate felt pressured to deliver the best
possible solution to the field.

As the project progressed, Tactical approached Tate again and recommended more extensive
integration between the SFA database and existing back office databases. The product
customizations and back office integration cost Quantium nearly $1 million, as Tate increased
his commitment to Tactical from about $2 million to about $3 million. To support the growing
project, Tate also assigned additional internal IT resources to the SFA implementation team as
they became available, until eventually there were five Quantium IT staff supporting the project.
Sales Force Automation at Quantium Technology M-311 p.7

With the increased project scope, the summer deadline came and went. Finally, in January 2003,
the SFA solution was in place and ready to roll out to the field.

Tactical Consulting

Rory Farrell was the lead consultant from Tactical on the Quantium SFA project. He described
to Rothman the SFA Kick-Off at the Quantium Global Sales Conference in January of 2003:

We planned a big SFA kick-off for the company sales conference in Las Vegas.
Most of the Quantium sales reps had heard rumors of new sales tools in the
works, but they did not know much about the SFA project. Tate and I developed
an in-depth presentation for the entire sales force that focused on the system’s
long list of features and functionality. We also showed a quick demo of the
product itself. The presentation session was shorter than we would have liked,
but it seemed to be well received by the reps.

Following the kick-off, the project team began rolling out a training program tasked with getting
every one of the 2,000 sales managers and sales reps up to speed on the new SFA tool.
Consultants from Tactical were leading the training effort, and Farrell scheduled a series of
workshops worldwide that provided each sales rep an opportunity to spend half a day in hands-
on training with the Siebel Sales tool. All sales managers were trained first, followed by the
sales reps, and by the spring, Farrell reported, nearly 90 percent of managers and 75 percent of
reps had completed this training.

Farrell had hoped that Tate could keep one or two IT project team members on the SFA project
longer-term in order to provide ongoing support and answer questions from the sales
representatives. However, other project priorities in the IT organization forced the experienced
resources to be reassigned. The breadth of the rollout was also a challenge for Farrell and his
team, as they tried to keep up with the endless questions and minor crises that arose in sales
offices around the globe.

Farrell also addressed Rothman’s questions about the system’s speed and performance, which
was rumored to be a problem. He confirmed that performance problems emerged after reps
began using the tool. However, he said that much of the blame lay with Quantium’s existing
technology infrastructure, particularly the outdated systems supporting the smaller sales offices
around the globe. He also conceded that some of the product customizations had diverted
resources from focusing on system performance.

The Field

Lastly, Rothman interviewed several sales managers and sales reps to take the field’s pulse on
SFA. Jose Sandoval was a Regional Director in the EMEA region who provided his feedback:

The data in the new SFA pipeline and forecasting tools was useless, even after we
spent all of that time and money. Garbage in, garbage out. Everyone at corporate
preached patience during the rollout, but even six months later the data did not
accurately reflect the sales situation on the ground. I was seeing win rates in the
Sales Force Automation at Quantium Technology M-311 p.8

system as high as 80 to 90 percent, where 25 to 30 percent would be normal. At

the end of each quarter, my team still brought in a flood of new deals that were
not in the system, which ate up valuable resources to close.

Most frustrating to Sandoval, old pain points continued to plague the organization: reps were
still tripping over each other as they navigated team selling and solution selling. Rothman also
queried Sandoval about the impact of the expensive product customizations, such as the look and
feel of the dashboard, but Sandoval was unaware of any special product features.

The sales reps did not hesitate to share their opinions with Rothman. She learned that
independent-minded reps hesitated to enter deals into an SFA system because they felt that “Big
Brother” would be watching them. One rep noted:

I already knew all the details of my deals in my head. I kept a detailed Excel
spreadsheet with all of my customers’ contact information, product details, and
deal history. Plus, there was a fair amount of pressure from my manager. “Okay,
a fifty percent probability on this deal, how do we get it to seventy? How do we
close it?” So I might as well not even put the deal in the system, because I didn’t
want to attract attention. I also didn’t like structured rules of the pipeline tools—
every rep is different, a deal that I think is at 80 percent probability, another rep
may only give a 30 percent probability.

Some reps were dubious about taking on new tools, as another rep described:

Our daytime jobs don’t go away when there are new tools to utilize, so learning the
system was a tax on our time. We were a driving organization, so most of the time
this stuff got done on the weekend and on our own time.”

TAKING STOCK

At the close of her first month on the job, Rothman went back over the history of the SFA
implementation, and the current status of the sales organization. Sales managers complained that
they still did not have accurate pipeline visibility, even with a new, expensive tool. The sales
reps believed that the system was a waste of their time. Customers continued to suffer from
miscommunication within the sales organization. Rothman recognized the breadth and depth of
the implementation mistakes that had been made. However, her new job was not to criticize the
past, but to find a solution to make SFA work at Quantium for the future.
Sales Force Automation at Quantium Technology M-311 p.9

Exhibit 1
Selected Financials for Quantium Technology

1999 2000 2001 2002 2003

Products Net Revenue 2,034 3,003 2,684 1,819 1,559
Services Net Revenue 327 647 460 681 728
Total Net Revenues 2,361 3,650 3,144 2,499 2,287
Cost of Sales 1,134 2,008 1,508 1,516 1,298
Operating Expenses 920 1,380 1,156 1,233 1,533
Other Income (Loss)3 (98) (77) (108) (132) (141)
Net Income 210 185 373 (117) (686)

Source: Company records

3
Includes gain (loss) on equity investments, other income, settlement income, benefit (provision) for income taxes,
cumulative effect of changes in accounting principles.
Sales Force Automation at Quantium Technology M-311 p.10

Exhibit 2
Quantium Technology Sales Organization

EVP Global
Sales

VP VP VP VP
U.S. EMEA Americas APAC

Sales Sales Sales Sales

managers managers managers managers
Account reps Account reps Account reps Account reps
Product- Product- Product- Product-
focused reps focused reps focused reps focused reps
Industry- Industry- Industry- Industry-
focused reps focused reps focused reps focused reps
Sales Force Automation at Quantium Technology M-311 p.11

Exhibit 3
Siebel Sales Product Description

Siebel Sales enables field sales organizations to sell collaboratively across geographies, time zones, and currencies,
and scales to meet the needs of even the largest global deployments. With Siebel Sales, field professionals can
accurately forecast future business, generate customized presentations and proposals, and easily produce customer
communications such as personalized invitations, thank you notes, letters, and other correspondence.

Sales organizations can use Siebel Sales to seamlessly share information across sales teams, manage sales
pipelines, rapidly create customer quotes and proposals, easily configure products and services to meet the unique
needs of each customer, and provide superior after-sales service and support.

Source: Siebel website. Product description for Siebel Sales.

http://www.siebel.com/sales-force-automation/solutions-description.shtm
Sales Force Automation at Quantium Technology M-311 p.12

Exhibit 4
Siebel Sales Functionality

Pipeline Visibility
▪ Opportunity Management: Picture of each opportunity, including source, products of
interest, competitors, key decision-makers, deal history.
▪ Forecasting: Ability to create a forecast at any level by rolling up pipeline data;
provides charts and reports; includes customer-configurable business rules.
▪ Pipeline Analysis: Charts pipeline data to track and analyze trends; monitor key
business indicators.
Sales Effectiveness
▪ Contact Management: Complete profile of customer, including all interactions.
▪ Activity Management: Schedule items, develop activity plans, and manage tasks.
▪ Quote Generator: Easily build customized quotes.
▪ ePricer: Develop, manage, and deploy complex pricing rules.
▪ eConfigurator: Configure the ideal solution; facilitate cross selling.
▪ Proposals and Presentations: Build uniform, customized sales proposals and
presentations.
▪ References: Profile each customer reference, track it use.
▪ Expense Reporting: Prepares expense reports, tracks reimbursement.
▪ Encyclopedia: Library of sales information.
Motivation and Focus
▪ Quotas and Incentives: Tools for managers to design quota plans and incentive plans.
▪ Assignment Manager: Routes opportunities to the right sales team members
▪ Reports: Graphical analysis tools.
▪ Incentive Compensation: Create and analyze incentive plans; track, report, and
estimate compensation.
Sales Analytics
▪ Dashboard for executives and sales managers.
▪ Data warehousing solution with advanced analytics.
▪ Self-service access provides real-time answers.
Best Practices
▪ Supports popular sales methodologies, such as Siebel Target Account Selling, Siebel
Enterprise Selling Process, and Siebel Strategic Selling from Miller Heiman.
▪ Siebel Sales Assistant provides sales coaching.
▪ Configurable for any sales process.
▪ Workflow to automate specific business processes.

Source: Adapted from Siebel eBusiness Architecture: A Comprehensive Guide to Siebel eBusiness Applications,
Services, and Architecture.