Technology

Today its difficult to imagine any office and any kind of work without computer. Computers and informational technologies have penetrated into different areas of modern life, optimizing and making more effective different processes. No wonder that computers got a wide spread in business, as they make the process of data collecting, data storage and processing quicker and easier. It allows saving money on work power and at the same time it promotes business. Todays business uses different kinds of information technologies innovations starting from usual MS office applications and simple small databases and going all the way to enterprise management systems and different decision support systems. So IT technologies are used not only by big corporations but by small retail businesses as well.
Its an obvious tendency of the world market that a big share of all sales is moving to online market. There are lots of obvious reasons for that: online purchases are relatively secure, easy to be done, they allow to save a lot of time, sometimes they are also more profitable as products sold online are cheaper (the seller doesnt need to include extra fees like rent of sale place, salaries for salesmen, etc.) This kind of business is growing every day and now its not only limited to online purchase of electronics and computers, but used by customers for purchases of any sort. Its enough to mention EBAY and Amazon which are used not only as tools for the garage sale of individuals but are also successfully used by retailers and wholesale departments of different products not only used electronics. Thats why the idea of moving sales business online is very reasonable especially if its successfully run as distant one and if sales by catalogues are relatively successful.
Thats why a big number of specialists continues to insist that one of the most innovative and spreading method of retail business management as other sales businesses management is distant organization of work: top managers and top sales managers use Internet and other means of communication to regulate business, especially if it refers to international companies. The organization of a workplace for one person costs not more than 2-3 thousand dollars, and its arranged in employees house. It allows saving a lot of money on rent, property taxes, etc. Those saved finances are redistributed as a result the employees get higher salaries, plus they get more flexible and comfortable conditions of labor that plays a role of additional motivation in their work.
In order to organize successful online business and in order to move existing business online its important to take into consideration a big number of different risk factors as it will influence the future business strategy greatly. As shift of the business to online market will nevertheless mean possible loss of customers, decrease in sales, etc. At the same time it will create a negative attitude of the sales representatives who work with customers as theyll view online sales as a serious threat of their employment and good salaries.
This problem was faced by Pergault, Inc. A company which specializes in selling maintenance, repairs and other house supplies since 1954. Now Pergault, Inc. is a big company where sales are run by means of sales catalogues with more than 4000 pages. Since 1997 there was made a decision to create a sales web-site to boost sales and move online. Nevertheless the idea about e-commerce strategy was not clear until a new president of Pergault, Inc. Celia Fiorni decided to make an accent on online sales and the first thing she did was spending 20 million dollars on modernization of web-site of the company. She is a former president of a small computer company and thats why her belief in high tech and IT is very high. She thinks that online sales will increase and moreover current sales representatives have to persuade permanent customers to make online sales. Sales representatives are afraid of losing their work places and also they are afraid that online sales will cut a remarkable part of their salary-commissions from sales. The point of sales representatives is clear as they argue that sales on internet contribute only for 20% of all sales, why life sales contribute for the rest 80%, besides, those 80% of sales are done by permanent wholesale customers which represent only one fifth of the total number of customers. So its clear that to lose such a big number of customers is very risky and unreasonable.
In order to change current situation faced by sales employees of Pergault, Inc. new HR management strategy has to be taken. There are several reasons for that: first of all company has to save its permanent wholesale customers, who contribute 80% of all sales; company has to save its employees who guarantee stable sales to permanent wholesale customers. In order to realize this plan Fiorni has to reorganize the work of sales departments and revise the compensation options to the sales representatives. Obviously the problem is not in the case that permanent customers are not willing to use online system for purchases, its more about employees who are afraid of losing their job. Thats why Fiorni has to revise the custom relation management in the company and train sales representatives to work in online business effectively. There is a number of arguments for such decision: even though employees say that their sales are very effective and form a major part of companys sales there still exist a lot of weak points in their work:
A recent customer satisfaction survey revealed that mistakes are made in about 1 out of every 20 orders that come in through sales people. He feels that this error rate is much too high. Further, he believes that his sales reps are not even close to reaching the full potential for his market in and around Milwaukee. The reps spend too much time taking orders, and not enough time explaining to customers how our other products can meet their needs .
So it becomes obvious that sales strategy has to be changed. And it has to be an urgent decision as it effects companys business not just in Milwaukee area but country wide as well. The process of taking orders has to be definitely changed. It has to be informatized and a special sales processing online system has to be designed which will connect sales representatives and the main sales office as accepting orders by fax is very slow process which takes much more time than online operations. Besides, access to online catalogues will be beneficial both for customer and sales representative as sales representative will be able to navigate catalogue easily and suggest customer other products which will meet his need. Its a well known fact that computer systems of sales processing unite big databases and often have relative categories for any kind of product so that a missing one can be easily substituted by another one. Such method of sales will minimize order proceeding time and will guarantee that exact order will be sent, which is very important, as current error rate of 5% is very high for such kind of business. The main reason of that is lack of automatization in order proceeding schemes. Understandably the safety of orders will be the most beneficial for permanent customers, so if sales representatives will advice customers to go online for making orders saying that this way theyll ensure their order the number of online customers will grow, especially if refer to the survey results where customers reported frequent error rate in sales. Understandably, it will have to take time to retrain sales representatives and gain over customers to online purchases but in future it will compensate all expenses.

In order to change the attitude of existing employees towards new initiative of moving business online, HR manager has to provide them with objective information about their performance so that theyll get convinced in relatively modest performance of their work: it has to include the rate of sales errors on the hand with time spent for taking an order compared to work of online sales system. Second the sales people have to be retrained in order to be able to work both online and life accepting orders ad providing custom support by phone. It will change the range of their responsibilities but at the same time it will increase their performance. Plus, it will motivate customers to go online and buy products from online shop as such approach will not change anything. If the customers complain that the web-site is too loaded with useless graphics and animation on the hand with other useless tools, its concept has to be changed to meet the expectations of customers. But the words of sales representatives: I'm sorry, but I refuse to tell my best customers, Im too busy to take your order. Go surf the Internet.' are not frank at all and are very subjective. Besides, if sales representatives will help to move business online they will be in advance as customers will anyway contact them and as the number of sales increases, so will increase their commissions according to the location of Pergault, Inc. local office ad location of customers. As the analysis conducted early shows the delivery time of the purchase made online takes one day less than a purchase made from the sales representative as it needs to run through a very low and inconvenient process:
sales rep personally meets with a purchasing agent from the customer firm. The sales rep writes up the order by hand as the purchasing agent makes his requests. After the meeting, the rep submits the order to G. W. Pergaultusually by fax. A member of G. W. Per gault's data-entry clerical staff receives the form, and enters the information into the system for delivery. The order is packaged and shipped, usually within three business days from when it was made.
The use of online system will reduce delivery process on 30% as the purchase will be made online and it will take just several minutes. Still if the similar system will be installed in the sales offices countrywide it will ease the work of sales reps and theyll advise customers to use online purchase system as well. If the sales representatives adopt new changes sales performance will increase in very short period of time. Understandably it will require additional effort from them as theyll have to develop new skills of working on computer ad will change the way they manage sales. Besides, the words of the companys president Fiorni: G. W. Pergault needs morenot fewerpeople selling. We simply need a shift of focus toward selling new products to our best customers. We also need sales to focus on opening new accounts.
So these words only prove that companys HR managers have to do their best to increase motivation of sales people and moreover, big emphasis has to be done on customer relation management. As a new strategy of the company is not only to save existing customers but also to attract new ones. Development of unique CRM is essential for any kind of business and its essential especially for a developed business which has a big number of permanent customers. The importance of good CRM is well understood by the sales reps of the Pergault, Inc. as they say that a big number of permanent customers continues to purchase items because they are very satisfied with service and price policy: thats why if sales reps are able to forecast customers behavior during making a purchase and after purchase, if theyll know preferences of customers and are able to give valuable consultations, the number of sales will increase and its obvious that existing customers will advise to use this particular company to others. Its generally agreed that to attract new customers is more complicated process than to increase existing sales as it requires good promotional campaign and excellent customers service. So here the major work will have to be done from he side of sales reps as they are the face of the company and their performance influences the interest in the company from he side of customers. If the error rate in sales will decrease, plus if company will offer special discount programs to wholesale customers and if it will be contributed by fair compensation in salaries of sales reps the number of new customers will grow and it will open new horizons for sales business. On the had with development of a reasonable CRM strategy which has to be a strategic priority for Pergault, Inc. as it will ensure their sales in future; top managers have to conduct a research about the CRM strategies and sales business concepts of Pergault, Inc. competitors.
The penetration of IT into the sphere of sales is inevitable and its only a matter of time when the major part of sales will move to online market. The only thing and the most important thing companies specializing in wholesale and retail business can do is modernize their sale strategies and promote the use of Internet technologies on the work place as it will greatly reduce the order processing time and will make the whole process more secure. In such case, any company which specializes in selling a great variety of products has to develop an excellent navigation system which will not only allow to make purchases but will also assist in making purchases, choosing similar products. Still these system will require custom support decisions and of course will require the assistance of sales people in making big online purchases. According to Introduction to Sale force management:
In the United States, over 60 percent of salespeople are "connected". The internet, company intranets and extranets, desktop conferences and other internet technology all enable salespeople and sales managers to improve their productivity. To compete effectively, salespeople and managers alike will have to adopt new technologies. However it will make sales efficient but will never substitute face-to-face contact in complex selling.(Introduction to Sale force management 24).
It shows that the use of information technologies in sales business is very important for successful business management. In the case of Pergault, Inc. it means that sales reps will have to develop new skills of online sales management and will also have to increase their performance and job quality in order to attract new customers.