Sales Force Automation: Advantages and Disadvantages - Essay Example

SALES FORCE AUTOMATION: ADVANTAGES AND DISADVANTAGES goes here of goes here goes here September 14, Sales Force Automation Before going into the discussion regarding advantages and disadvantages of Sales Force Automation, let us get a better understanding of what Sales Force Automation actually is. Kietzman (2010) asserts, “Sales force automation, frequently abbreviated as SFA, is a method implemented by a business to help automate the components involved with sales”. It is a process of automating the sales related activities by using special software. The software automates almost all activities involved in the process of sales management such as order processing, order tracking, inventory management, and information sharing. Sales force automation not only involves automation of various activities related to sales department of a company but also assists the management in carrying out sales analysis, market analysis, and employee performance analysis. Implementation of sales forces automation system in any company or organization is considered an important managerial decision but where it brings various advantages for the companies, it also leads to some disadvantages. Advantages of Sales Force Automation Sales Force Automation brings many significant advantages to the sales departments of the companies. Let us discuss some of the key advantages of implementing Sales Force Automation system. 1. Effective Sales Management Processes Sales Force Automation helps the management of a company update the sales management processes in order to enjoy sheer sales success (Anderson 1996). The key activities carried out by the Sales Force Automation system include lead management, opportunity management, account management, contact management, activity management, and sales forecast analysis (Wilkinson 2010). Sales Force automation helps the companies automate different sales activities, which results in making the sales related processes more accurate and reliable as compared to traditional sales management. 2. Competitive Advantage Sales Force Automation also helps the companies achieve market domination in any competitive market by increasing the productivity through automated sales processes. Some of the key advantages of implementing Sales Force Automation system in a company include identification of risks, elimination of wastes, decreased administrative costs, improved contract management, better order tracking system, and increased profits for the company. 3. Effective Staff and Automation of Processes SFA system automates various sales processes such as order placement system, order processing system, and order tracking system. These automated systems result in making the sales department staff of a company more efficient. De Sousa (2010) asserts, “Sales management software enables sales teams to concentrate more on their sales activities as opposed to administrative tasks”. Companies should implement appropriate techniques such as supervisory feedback and role modeling in order to build a competitive sales force (Rich 1998). As the SFA software reduces the amount of work that the sales representatives must complete, it makes the sales staff more productive and well organized. Due to Sales Force Automation, the sales management staff becomes able to send the sales related information regularly to their sales supervisors. The sales team always accesses the current information, which makes it easier to track leads more accurately (Wilkinson 2010). Whereas in traditional sales management style, the process of information delivery takes a long time as all sales calls are first collected and then the information regarding the orders is sent to the management. The timely information helps managers perform accurate sales forecast analysis. The companies also become more productive and responsive due to reduced response time of the management. 4. Improved Productivity SFA influences some important sales factors, which result in increasing the productivity of the company. These factors include reduction in the cost of sales due to automation of processes, proper inventory management, increase in the market share, and increase in the sales revenue of a company. These factors not only result in increasing the productivity of the companies but also help those companies get competitive advantage over other competing firms. Banks (2006) asserts, “The increase in productivity further creates a competitive advantage by reducing costs, increasing sales revenue and market share”. 5. Increased Customer Satisfaction One of the most important advantages of automating the sales processes of a company is increased customer satisfaction. Customer satisfaction plays an integral role in the success of a company in a competitive market because success of a company depends on the number of satisfied and potential customers that a company has. SFA speeds up the order placement, tracking, and delivery processes that result in making the customers satisfied with the speedy and reliable services provided by the company (Erffmeyer and Johnson 2001). When a company manufactures a product according to the demands and expectations of the customers and delivers the manufactured products to them within the specified time, the customers begin to feel honored by the company and, as a result, they become permanent customers of the company. Many companies implement SFA systems to increase sales and achieve domination in the market. Customer satisfaction and effective sales representation results in increasing the number of potential customers and orders for the company. Therefore, we can say that automation of sales related processes increases the profit margins and sales revenue of a company. 6. Business Cost Reduction Implementation of SFA system also helps the businesses in reducing the labor costs. As sales force automation software is capable of completing so many tasks at a time, businesses become able to reduce the number of employees on their payroll (Kietzman 2010). Sales force automation system also saves extra space that is needed for the employees and equipment of the company. The SFA software carries out various sales processes in a single computer which results in ending up the need for office space and additional equipment. 7. Reduced Contract Approval De Sousa (2010) asserts, “Contract approval cycles can be reduced dramatically with a robust sales force CRM solution”. It is because SFA systems help the companies renew their contracts by tracking the contractual information while reducing the administrative costs of the companies. SFA system allows companies to manage their contracts’ lifespan by shortening approval cycles, renewing contracts, and reducing administrative costs (Dutta 2006). 8. Evaluation of Past Performances Another advantage is that a company can improve its performance by analyzing the past performance reports generated by the SFA software. Dutta (2006) asserts, “Users can access information to evaluate their companys past performance and point out its strengths and weaknesses with the intent to repair those deficiencies”. Disadvantages of Sales Force Automation Along with many advantages of Sales Force Automation, there are also some disadvantages associated with the implementation of Sales Force Automation. The main disadvantages include unsatisfied employees, insufficient data, less human involvement in dealings, difficulty in the implementation, requires continuous system’s maintenance, and continuous information updating requirement. Let us discuss some of the drawbacks of implementing Sales Force Automation system. 1. Employees’ Dissatisfaction Those companies, which implement Sales Force Automation systems in their sales departments, may face the problem of unsatisfied employees. It is because some of the sales staff may not be very proficient in using computers, so it becomes a difficult task for them to operate computers and they start showing feelings of exhaustion and fatigue while working. 2. Added Administrative Cost Another disadvantage of implementing SFA system in a company includes added administrative cost. SFA system requires computers to make a computer network. The network, which is used to carry out different sales activities, increases the administrative cost of the sales department. 3. Less Human Involvement Less human involvement in sales activities is also a big disadvantage of Sales Force Automation. Increased sales and increased profits revolve heavily around the level of human involvement in dealing with the customers (Doyle and Roth 1992). Customers want to interact with the sales representatives in order to get required information related to any specific product or service. It is because interaction with humans is always more productive for the customers as compared to interaction with the computers. Computers can only provide specific information to the users whereas a sales representative can provide knowledge about a product or a service from different aspects. 4. Less Information Information is the basic element of Sales Force Automation system’s success. Companies need to enter adequate and correct information into the computer systems in order to make use of it for various sales activities. Adequacy of data is very important for the correct order processing. Field sales staff needs to be proficient in the use of computers because if they input incorrect data into the database, the output of the order processing will be unexpected and the company may begin to loose its potential customers due to improper order processing. Automating a weak sales force or inefficient sales management process cannot improve productivity (Calvin 1991, 225). Therefore, in order to overcome this disadvantage, the companies should hire proficient and skillful staff for the tasks of data entry, continuous maintenance of the system, and continuous information updating. Conclusion Summing it up, Sales Force Automation is a process of automating the sales related activities such as order processing, order tracking, inventory management, and information sharing. Sales force automation also assists the management of a company in other important activities which include sales forecast analysis, employee performance analysis, and sales contacts management. Sales Force Automation brings many advantages to the sales-oriented companies. Along with the advantages, there also exist some disadvantages of implementing Sales Force Automation in a company but those disadvantages can be avoided through proper implementation and supervision of the SFA software. References Anderson, Rolph. 1996. Personal Selling and Sales Management in the New Millennium. Journal of Personal Selling & Sales Management 16 (4): 17-32. Banks, John. 2006. Benefits of Sales Force Automation. ArticlesBase.com. http://www.articlesbase.com/customer-service-articles/benefits-of-sales-force-automation-48904.html (accessed September 14, 2008). Calvin, Robert. 2001. Sales Management. New York: The McGraw-Hill Companies, Inc. De Sousa, Manny. 2010. The Main Advantages Involved in Sales Force Automation. EnzineArticles.com. http://ezinearticles.com/?The-Main-Advantages-Involved-in-Salesforce-Automation&id=4564860 (accessed September 14, 2008). Doyle, Stephen, and George Roth. 1992. Selling and Sales Management in Action: The Use of Insight Coaching to Improve Relationship. Journal of Personal Selling & Sales Management 12 (1): 59-64. Dutta, Kausik. 2006. Top Ten Benefits of Sales Force Automation (SFA). EnzineArticles.com. http://ezinearticles.com/?Top-Ten-Benefits-of-Sales-Force-Automation-(SFA)&id=339798 (accessed September 14, 2008). Erffmeyer, R., and D. Johnson. 2001. An Exploratory Study of Sales Force Automation Practices: Expectations and Realities. Journal of Personal Selling & Sales Management 21 (2): 167-175. Kietzman, Shannon. 2010. What is Sales Force Automation. Wise Geek.com. http://www.wisegeek.com/what-is-sales-force-automation.htm (accessed September 14, 2008). Rich, Gregory. 1998. The Constructs of Sales Coaching: Supervisory Feedback, Role Modeling and Trust. Journal of Personal Selling & Sales Management 18 (1): 53-63. Wilkinson, Gardner. 2006. Top Advantages of Sales Force Automation. 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