1. Solution Selling in Telecommunications Infrastructure Business: Case Study S-38.3310 Tietoverkkotekniikan diplomityöseminaari Joakim Knutar Valvoja: Heikki Hämmäinen

2. Agenda Background – Research Problem – Objective Solution Selling Case Study Results Conclusions 15-05-20092Joakim Knutar - Master Thesis presentation

3. Background Solution Selling has been implemented at the case company since 2005 At least 6 different programs since 2005 that deal with transforming the organization into a solution-centric organization Beginning of 2008 top management started asking about proof of the improvements gained so far 15-05-20093Joakim Knutar - Master Thesis presentation

4. Background Research problem – Have the case company been able to produce higher margin in solution selling deals? Objective – Case study about the profitability for solution selling deals – Identify possible profitability drivers for solution selling at the case company 15-05-20094Joakim Knutar - Master Thesis presentation

5. Solution Selling – Consultative engagement – Proactiveness – Customer business problem Solution – “a custom-made offering made out of products (HW/SW), services, and 3 rd party components combined to solve the customer’s business issues and give value to both the customer and the supplier” 15-05-20095Joakim Knutar - Master Thesis presentation

6. Solution Selling Proactive prospecting Opportunity management Stimulating interest Relationship Power people Value creation Account management Knowledge management (repeatability) 15-05-20096Joakim Knutar - Master Thesis presentation

7. Case study Profitability information about solution selling deals not retrievable from financial systems Only way to get to the profitability is by conducting a case study – Interviews with sales people – “let’s investigate a statistically good number of deals” 15-05-20097Joakim Knutar - Master Thesis presentation

8. Case study Sales funnel to provide information about deals Deal identification Opportunity is identified without RFX-process (latency criteria) Opportunity is scoped consultatively around customer commercial obstacle to be removed. Scoping is done in stream of workshops together with customer’s empowered delegation (scope criteria) Scoped opportunity is quantified to contain high value in customer’s commercial performance improvement (high value impact criteria) Opportunity is identified without RFX-process (latency criteria) Opportunity is scoped consultatively around customer commercial obstacle to be removed. Scoping is done in stream of workshops together with customer’s empowered delegation (scope criteria) Scoped opportunity is quantified to contain high value in customer’s commercial performance improvement (high value impact criteria) 15-05-20098Joakim Knutar - Master Thesis presentation

9. Case study Interviews – July 2008 – December 2008 (data still received in February 2009) – 30 minutes per deal – 223 deals investigated – Needed information retrieved from 166 deals (161 meetings held) Focus on – Solution selling or not?- Uniqueness of solution – Scope- Match to customer need – SW/Service content- Latency – Pain point- Reusability – Value creation- Financials – Consultative engagement 15-05-20099Joakim Knutar - Master Thesis presentation

10. Results Ordinary sales vs. Solution selling Retrieved financials compared against regional and global reported profitability July 2007 - July 2008 15-05-200910Joakim Knutar - Master Thesis presentation

11. Results Ordinary sales vs. Solution selling Retrieved financials compared against regional and global reported profitability July 2007 - July 2008 15-05-200911Joakim Knutar - Master Thesis presentation

12. Results Deal size impact on profitability 15-05-200912Joakim Knutar - Master Thesis presentation

13. Results Truly latent deals – 22 deals – Gross margin 73% Proactiveness Scoping Commercial value Relationship Reusability Power people Standard SW components 15-05-200913Joakim Knutar - Master Thesis presentation

14. Results Profitability driver framework Gate 2Gate 3 Gate 4 Gate 5Gate 6 Go / No go Bid / no bid ApprovalsWin / LossStart delivery Value Engagement (power persons) Architecture, design, and build The scope of the deal Uniqueness of innovation Match to customer need Excellence in execution Project/contract/chang e mgmt Services Reusability 3 rd party share Software (standard/customized) External drivers Internal drivers 15-05-200914Joakim Knutar - Master Thesis presentation

15. Conclusions Results indicate that solution selling gives better gross margin Financial system need to provide this info in the future Knowledge management utilization Need for change 15-05-200915Joakim Knutar - Master Thesis presentation