Improving performance measures that matter -- Platinum integrates sales and marketing enterprisewide

Platinum Technology (www.platinum.com) proves that its knowledge management efforts improve performance. The company uses no fancy measurement concepts, no elaborate schemes for divining quantified benefits, just a consistent focus on delivering value. Its straightforward approach to developing ROI justifications earns Platinum KMWorld’s Best Practice Award.

An aggressive acquisition strategy turned Platinum Technology, based in Oak Brook Terrace, IL, into one of the largest computer companies in the United States. Through a buying spree of 74 small companies over three years, Platinum assembled a portfolio of tools to help clients optimize their investment in their IT infrastructure, including databases, PCs and personal productivity software, mainframes and ERP packages.

With each company came different products, dissimilar marketing collateral and distinct methods of distributing the information. Members of Platinum’s sales force, any company’s most expensive resource, found themselves spending too much time in the office searching for product information. In the end, they sold only the products that they felt most comfortable explaining.

Given the lack of cohesion across product marketing and sales, the goal of selling solutions, not products, became more difficult to reach. Failure to show clients how the portfolio of tools could meet their business needs meant failure too of the goals of the acquisition strategy. The need to successfully integrate its different units and, most importantly, to raise sales productivity fueled Platinum’s knowledge management efforts.

Jaguar: a sales and marketing intranet application

Beginning in 1994, Platinum began developing Jaguar, an intranet application geared toward integrating the sales force and marketing groups across all units. Led by Glenn Shimkus, director of worldwide sales enablement, the application has evolved in three separate stages to date. A thoughtful analysis of how each version would cut costs or generate revenue preceded each stage, followed by a thorough review of results.

The first phase rationalized the marketing collateral development and publishing processes. By providing one access point for retrieving collateral, Platinum eliminated the need for multiple content delivery mechanisms and expensive overnight shipping. That freed time within product marketing to provide more strategic and less tactical information.

The second phase incorporated more marketing intelligence, including an events calendar and competitive intelligence. It mapped Platinum products’ strengths compared to those of competitors.

In the third phase, those materials became available in an off-line format, enabling access irrespective of network connectivity. Called Jaguar Anywhere, the CD-ROM-based application provides the Cliff Notes version of Platinum’s product positioning.

Building the business case

Decisions about what features to incorporate in the next release were based on analyses of how they would improve business results. Shimkus built a believable set of assumptions on how the application would change the way sales operated. For measures, he stayed focused on how actions would increase productivity, market share or time to market.

Both hard and soft measures comprised phase one’s ROI. Hard or irrefutable measures made up two-thirds of the overall composition; those included reductions in printing bills, FedEx shipments and number of sites being managed. The final one-third included soft measures like sales force productivity. Although the salespeople saved a minimum of two hours per week, it was impossible to prove they had used the time to go out and sell more. Management appreciated the de-emphasis on values that could easily be contested.

The first cut at a final ROI yielded $20 million in benefits. Realizing that many senior executives would see that number as implausible, Shimkus scaled back the benefit reducing the number by 75%. "I got it to point where no one had to be sold," said Shimkus. By focusing on numbers that would be difficult to refute, the project gained enthusiastic backing as well as the needed funding.

Reviewing the results

Projected benefits are just one part of the efforts. Shimkus’ team also keeps careful track of what happens once Jaguar makes its way into the hands of salespeople.

"If you don’t measure, how do you know if you’ve accomplished anything?" he asked.

Tracking usage provides an even greater sense of where and how value is being delivered. For instance, the team tracks which documents are most often downloaded and publishes the information. That provides recognition to product marketing people whose work is often unrecognized. It also lets marketing personnel know when their efforts are misguided. If the collateral goes unused, those numbers suggest that a different approach needs to be taken.

If the numbers show that Europe uses collateral less, the company questions the approach: Is it the wrong message, wrong product or wrong education? Those numbers help both marketing and sales understand where tactics need to change. By analyzing the use of the marketing events calendar and subsequent turnout, Platinum can target its future marketing campaigns. Employing usage data to influence marketing decisions sets Platinum’s approach apart.

The company has noticed a correlation between utilization rates and productivity. It has witnessed a 10% to 25% growth rate per month in overall utilization. By the end of Jaguar’s first year in full implementation, there was a 6% increase in sales per person.

"I feel comfortable crediting 4% of that increase to Jaguar," said Shimkus, recognizing that changes in training affected sales as well. He based that figure on usage rates and conversations with the sales force and company executives.

Shimkus’ background in sales makes him quite familiar with its specialized needs. His team also stays in close contact with users and managers, soliciting continuous feedback. Ninety percent of enhancements come from user suggestions.

Lessons learned

In developing Jaguar, Shimkus learned that a business case wasn’t actually necessary. Although the CIO appreciated the analysis, he realized that the Jaguar initiative was a critical component of merging acquired companies. Nonetheless, Shimkus has continued to forecast potential benefits in order to guide investment decisions.

Focusing on issues of importance to the organization made selling the project easier. "I’m not going to try to sell someone on a new measure, such as return on time, and then try to convince them on funding a knowledge management approach," said Shimkus. Complex intellectual sales are much harder to make than are ones that promise to generate revenue. His approach is to improve measures that matter: market share, time to market, revenues and costs.

Although increasing productivity of the sales force was the primary objective, Jaguar has been built while the company faced increasing financial pressure to meet revenue targets. Platinum missed its fourth quarter revenue projections in 1998 despite significant revenue growth. Its subsequent depressed stock price made the company a prime acquisition target. At the end of March, its main rival, Computer Associates (www.cai.com), formalized its bid to acquire Platinum. Bought for $3.4 billion in a stock swap, the deal represents one of the largest ever in the computer industry.

A look into the future

Many companies complain that building a business case inhibits accomplishing good work, a notion completely counter to Platinum’s position. Its emphasis on improving performance guides its investment decisions. Cool technologies that provide questionable value to the sales force are eschewed.

"We investigated Yahoo Pager and Communicator, but had difficulty seeing how the sales force would really use these tools," said Joe Wiacek, project manager for Jaguar.

Nonetheless, with the fourth phase comes a more complex challenge. Having fully mastered its ability to disseminate explicit knowledge, the company wants to tackle the tacit side by fostering communities of practice. Encouraging informal collaboration among people with strict revenue and productivity goals eludes most companies. Although they intuitively recognize the benefits (effective gathering of competitive intelligence, better coaching of junior people, developing competencies in new fields), they are difficult to quantify. Unable to provide precise numbers, Platinum plans to provide incremental support and see how usage patterns develop.

With a proven track record, the company has leeway. Phase one delivered enough benefits to pay for itself, phase two and part of three. It is also aware of the lower returns that investments in the system will bring and therefore is making much smaller investments at this point.

Many companies embark on knowledge management efforts because they seem logical, but they don’t really assess why that is. Platinum focuses on improving performance measures that matter significantly to the company. And Jaguar should not be viewed as merely a document library. It has become a means of intelligence sharing between sales and marketing. Its before-and-after performance assessments provoke thoughtful and considered decisions about how to make business run better, a lesson that would benefit many knowledge managers.