Global Key Account management at

Siemens

GROUP ASSIGNMENT
A. BENINI; M. CUSIMANO; R.
DOXANDABARAT; D. FABRIZI; O.
RUTKOVSKAYA; R. STEGER

SALES FORCE MANAGEMENT

GEMBA 7

1a. Why does SIEMENS wanted to provide a KAM program to its

strategic customer
To get closer to its customer need by improving relationship and

loyalty;
To rise customer satisfaction (by 20%);
To growth revenues (by 15%);
Mature programs could generate even twice or more of this growth
(page 3 on top)
To rise profit and capital efficiency;
To build a solid capital structure ;
To offer complete, made-to-measure product, solutions, and services
portfolio;

Sustainable value creation

1b. What have you been according to you the main

benefits of the KAM approach?

Creation of a long term strategic partnership

Tend to lock in the customer
Build difficult barriers to enter in the business for existing competitors
Improvement of Net Promoting Score (NPS)
Cross selling/upselling opportunities
Increasing financial performance; profits, revenues;
Better customer understanding which could lead to more market share for both
supply/customer
Focus on Sell out through value creation fro both supply and customer
Coordinate pricing strategy ate international level
Innovation about business and customers
Customer involvement and buy-in
Sharing of information
Formulation of strategy and plans
Guidance for implementation
Learning (both managers and customers)
Better management overview / customer portfolio management

1c. What have you been according to you the main

risks of the KAM approach?

It is an approach that need time to growth and gives optimal results

It need an integration wit strategic market analysis & panning as well organization, so
lack of cultural fit might be an issue
Excess of customer knowledge of supplys processes
Support from IT in terms of CRM is key
Lack of internal sponsorship
Complexity and flexibility to be managed at the same time
Definition of Kam Metrics more related to bottom line than top line
Right balance between sales people and KAM
Skip some part of the KAM implementation process
Of not integrating KAM Plan with functional plan
Presence of conflicting objective both internally and eternally
Not to invest in change management and training to generate the strategic transformation

2. How has Siemens KAM program evolved over time? How long
has it taken to realize benefit ?
ONE KEY PROGRAM EVOLUTION

Mid 1990
-

Started
independently in 3
BU of information
and communication,
automation and
controls, automotive
electronic unit

2005
-

Starting
decentralization

Creation of 16 MDB

Develop of Siemens
ONE

2008

2011

Reorganization
into 3 large
sectors with still
companywide
KAM

Further drive
implementation of the
KAM approach
company wide and use
of more KAM

Concept of lead
business units

Focus on execution
excellence

Reduction to 12
(than 13) MDB
dropping some
highly cyclical
market

MDBs based on market

dynamics/opportunities
and cross business unit
synergies (14MDB)

Centralized approach

IT TOOK ALMOST 15 YEARS TO REACH THE OPTIMIZATION

PHASE OF ONE KEY SIEMENS PROGRAM

3a. Why

does Siemens has chosen Eurobric to be a key account?

Eurobric was the largest producer of Stanmet and represented about 8% of the world
output ( post merge )
HQ in West Europe focus on operation and purchasing mainly
Production site in 60 countries covering all of key Stanmet market from emerging to
mature
Employed 300.000 people
Any investment above US$2 million had to gain approval from a central investment
committee that met once a month in the HQ
3 digit million euro client per year for Siemens who supplied worldwide a variety of
projects and solutions
Expectation of doubling this revenue if Eurobric would invest in more large projects
(there was also a conservative view in Siemens about this client)
Good knowledge of the client, GFA in place
Reliability of client uncertain
75% of Siemens BI Metal Technology sales came from Eurobric

3b. What

do you think of their identification approach?

Normally the criteria to identify the account are based on:

Historical performance (expected sales growth; customer

profitability; sales conditions; market share; existence of a
relationship with that client; M&A plans )
Customer profile (turnover; size/organization; image;
spending for selected product; financial stability/reliability;
sensitivity to price; fit )

The identification approach was correctly pursued

(refer to precedent slide for criteria)

4a. What type of organization has Siemens used for Eurobric?

Siemens Eurobric account team:

Mr. Maldini, Corporate Account Manager

Full time assistant also RAM for Europe and North Africa
Part time sales people from other region
80% of Siemens Tamestan offices workload
700km away from customer site
1 head regional rep + 1 logistic manager+ 2 engineers

4b. What have been, according to you, the main advantages and disadvantages of Siemens current
structure for Eurobric?

Advantages

Developing business in emerging local sites (as Tamestan)

Maximize and optimize Eurobrics mature markets
Flexibility on local customers need s

Disadvantages

Conflicting internal structure, too many reporting and confusion in the

evaluation system
No clear accountability + Local specifics (Size of business in Tamestan)
Different level of authority and process purchasing
Eurobric Tamerstan - strategic for EB not for Siemens in terms of revenues
No discount from GFA agreement
Small order (Siemens handling costs increase)
Price discrepancy issue
Parallel Market (from Germany)

5. If you were Maldini, would you adopt the HQs view and enforce global integration on the Tamerstan sales
team? Or would you adopt the local view and convince HQ to make adjustments? Any suggestions?

implement GFA and reduce Local revenues stream

Mustafin angry
Market preserved

pricing policy of GFA to be revised for this new region

Mustafin happy
Change in transferring price
100% KAM on eurobric

??????????? Guys we should discuss on this