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Global Account Management

In the last couple of decades, our world has become increasingly globalized and most of today’s Fortune 500 companies by default have multi-national operations. For an enterprise having a worldwide presence and acting as a global company while doing business with their customers are entirely two different things.  A Global company is always a multi-national one but the reverse may not be true.

For a multi-national enterprise to be truly a Global company its core processes need to be harmonized (standardized with acceptable deviations) across the globe. In addition, the enterprise has to present a single face to its customer agnostic to the region or country where the interaction with the customers occurs. In other words, for a multi-national company to be truly global it needs to have “Global Account Management” capabilities.  Global Account Management is a process by which one multi-national company can manage and coordinate its relationship with its customers (who in turn could be multi-national) globally.

In the Hi-Tech Industry (especially in OEM segment), maintaining relationships with contract manufacturers (to keep production costs a variable) and core set of component suppliers (to achieve synergies through volume procurement) are considered best practices and is often driven by a customer need for “order anywhere and ship anywhere”. Global Account Management supported by a global contract is very critical to enable this capability. Simultaneously, many enterprises in the Hi-Tech Industry are also considering centralizing their procurement functionality and would like to do business with their suppliers in a global fashion hence expecting a single organization or point of contact to conduct procurement related business transactions.

Global account management is one of the levers that enables an enterprise to achieve high level of  efficiency encompassing key elements of its operations namely, while selling its Products, delivering Professional Services, offering post-sale Support and buying materials, components and/or contract manufacturing services. To implement Global account management an enterprise needs to have necessary organizational structure, management processes and a good governance mechanism in place. Global account management scenarios, practices to support them need to be devised carefully and can vary depending upon an individual enterprise’s needs. Not all enterprises and vendors are the same and there is no “one size fits all” approach to it. Global account management practices need to be holistic as they impact how customer accounts are planned, managed at a segment level, set up, activated and subsequently how leads/opportunities can be translated into commercial global contracts. Hence an enterprise that is serious about Global Account Management needs to consider various dimensions and different parameters for each dimension while developing the appropriate model of engagement with their customers and suppliers.

The table below lays out the dimensions and parameters for developing the scenarios that is appropriate for the enterprise to guide their engagement with their customers and/or suppliers.

Account Planning

Contracts/Commercials

Products

Field Services

Support Level

Centralized

Global

Product Family 1

Service Offering 1

Support Level  1

Decentralized

Global and Regional Joint Collaboration

Product Family 2

Service Offering 2

Support Level 2

Hybrid

Global with Regional Exceptions

Product Family 3

Service Offering 3

Support Level 3

(One example scenario is for an enterprise to do centralized planning and create global contracts in joint collaboration with their regions for selling products and supporting their customers under Global Account Management).

Enterprises can establish a framework with the necessary collection of methods and tools that could make global account management more of a science making it more repeatable and predictable. The framework would enable enterprises manage the follow more effectively

  • Focus on most important regions or countries and related activities
  • Deliver consistent worldwide service
  • Better coordination of sales/service resources cross region
  • Respond to global economic trends by diverting the resources to regions that need more attention

Also such a framework can be a foundation upon which enterprises can have open two-way discussions with their customer’s top management regarding each other’s long term strategies and vision and the relationship could be mutually beneficial. This would make the relationship with their customers more productive, transparent and “Value” oriented.

Clearly there are many upsides and challenges to having a robust Global Account Management processes in place. Key among them would be as follows

Upsides

  • Improve ease of doing business and increase customer loyalty
  • Maintain “Single Face” and/or “One Voice” with the customer
  • Leverage “economies of scale” through efficiency gains and reduced costs
  • Share best practices from sale of products under a global contract and extend it to delivering Services and Support
  • Gain revenue by growing with the customer as they expand internationally
  • Transfer lessons learned while entering new markets and customer segments
  • Institutionalize customer relationships across the regions

Challenges

  • Global pricing may be inconsistent with local service requirements
  • Mandatory organizational changes to accommodate global customers may incur additional front loaded fixed costs
  • Hiring appropriate management resources (executives & managers) with skills and knowledge to work in foreign environments
  • Global economic conditions may fluctuate operational results in any given quarter requiring additional safeguarding
  • Occasionally lowest national price and most stringent terms & conditions may become the global standard
  • Erosion of “buy-in” within the enterprise as regional and geographic managers may have diminished role if customer accounts are controlled globally

Clearly a robust global account management has many advantages and enterprises that embrace these practices have an opportunity to accrue many benefits.

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