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Months
R O I C A S E S T U D Y
P R O G R A M : C U S T O M E R R E L A T I O N S H I P M A N A G E M E N T
D O C U M E N T N U M B E R : S 7 4 J U N E 2 0 1 8
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ROI: 165
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Payback: 8
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BPM ’ONLINE
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HERSHEY’S ICE CREAM
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ANALYST
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Rebecca Wettemann
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THE BOTTOM LINE
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Hershey’s Ice Cream deployed Bpm’online to modernize its sales and account management
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practices and provide a consistent source of data for analysis and decision making. Moving
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from a largely paper-based system to Bpm’online and providing sales managers in the field
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with tablet-based access enabled the company to increase productivity, identify
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opportunities for sales performance improvements more quickly, and redeploy three sales
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support resources by automating data entry and analysis.
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©2018 Nucleus Research Inc. | 100 State Street, Boston, MA, 02109 | +1 (617) 720-2000 | NucleusResearch.com
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THE COMPANY
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The Hershey Creamery Company was founded in 1894 by Jacob Hershey and his four
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brothers on a farm in Lancaster Pennsylvania. In the past 124 years, the family-owned
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company has grown from a small farmhouse operation to more than 40 distribution sites
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with sales of over $140M a year. With their involvement beginning in 1924, the Holder
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family has owned and operated Hershey's Ice Cream since the early 1960s.The company,
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now based in Harrisburg, Pennsylvania, is on the top 100 list of US ice cream manufacturers,
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selling more than 120 flavors of hand-dipped ice cream, sherbet, and frozen yogurt, as well
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as novelty and packaged desserts. The company sells through dealers as well as directly to
schools and institutions.
THE CHALLENGE
Although Hershey’s has made many innovations through the years in its product lines and
delivery methods, its sales and account management practices had remained very
traditional, relying on paper-based records and Excel spreadsheets to manage sales
operations. Sales people in the field would plan their account visits and report back to
headquarters on an ad-hoc basis, making it difficult for managers to have visibility into sales
activities in a timely manner.
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In 2016, Jim Holder, who then led training and safety, began to explore technology options
that would enable not just greater sales productivity but greater visibility across the
business.
THE STRATEGY
The company used Microsoft Dynamics GP for enterprise resource planning (ERP), and
considered Dynamics 365 as well as Salesforce.com. The marketing department had already
looked at Bpm’online so the company already had some familiarity with the application.
Ultimately, the company chose Bpm’online for three main reasons:
High usability.
The company recognized that moving to an electronic system would
be a significant change for both sales and back-office staff, many of whom had been
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there for years, and felt that the intuitive nature of the desktop application would
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drive faster adoption and productivity.
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Field sales capabilities. Hershey’s found the out-of-the-box mobile capabilities for
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field sales highly usable as well and expected that they would ease the shift to tablet
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for field sales users.
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Analytics. Moving to Bpm’online would enable Hershey’s to build reports and
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dashboards for real-time analysis, enabling managers to more rapidly identify
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opportunities for coaching and optimizing field sales efforts.
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Hershey’s made the decision to move forward in late 2016 and worked with Bpm’online
professional services and a partner, Technology Advisors, to plan the deployment, map out
processes, complete the needed integrations with the ERP application, and configure and
customize the software to meet Hershey’s needs. The total deployment process took
approximately 9 months, with Jim and Tim Ryan, a former regional sales manager,
managing the project. They created their own training materials that included written
training materials, walkthroughs, screen sharing, and exercises that focused not just on
functionality, but how the system would support day-to-day activities of users. The training
consisted of three different sessions over six days, with a pilot group of field sales people
and sales managers.
TYPES OF BENEFITS
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Direct 42%
58% Indirect
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The rollout was completed by September 2017, and the company continues to add users
while expanding its use of analytics and reporting.
KEY BENEFIT AREAS
Deploying Bpm’online to support its sales operations enabled Hershey’s to streamline data
entry, increase sales productivity and effectiveness, and drive more data-driven decision
making. Key benefits of the project included:
Increased sales productivity. Because sales can access information on all their
accounts via a tablet, they can plan their account visits with complete visibility into
account health, location, and order history. They can also easily update their account
activity from the road, saving time while increasing the timeliness and detail of
account information.
Reduced administrative overhead. Because sales reps can now enter information
directly and reports and dashboards are automatically updated with real-time data,
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Hershey’s has been able to redeploy three administrative staff members to other
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work activities while significantly reducing paper and printing costs.
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Reduced travel costs. Greater visibility into account activity and location for both
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field sales staff and managers enables them to plan their account visits to optimize
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visit time and minimize travel time, increasing “face time” with accounts while
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reducing overall fuel and travel costs.
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Improved sales management. Before Bpm’online, managers had to wait – sometimes
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months for sales productivity data to be available. Managers now have complete
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visibility into sales activities as they happen, enabling them to be more proactive and
data-driven in providing sales coaching and helping field sales to optimize their
account management activities. They can also segment productivity by daily and
weekly numbers as well as by the type of customer visited (such as “assisted living
facility” or “convenience store). Over time, the company expects that this will enable
managers to onboard new field staff more rapidly by providing better guidance on
account prioritization and sales offers.
CUMULATIVE NET BENEFIT
773,080
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409,858
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88,637
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Year 1
Year 2
Year 3
KEY COST AREAS
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Costs of the project included annual software subscription fees, the cost of tablet devices
for field sales staff, consulting fees for implementation and ongoing enhancements, initial
and ongoing personnel time to deploy and support the application, and the cost of training
time.
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LESSONS LEARNED
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Becoming a more data-driven business has enabled Hershey’s to become much more
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proactive in their coaching to ensure that field sales reps are effective in both how they
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manage their time and how they share data about accounts. A key part of this data-driven
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approach was an easy-to-access and use tablet application that makes it easier for them to
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take on new accounts and plan their activities while encouraging greater data capture.
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NET CASH FLOWS
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CALCULATING THE ROI
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Nucleus quantified the initial and ongoing costs of software subscription fees, Hershey’s
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tablet investment driven by the project, initial and ongoing consulting and personnel costs,
and the cost of training time to quantify Hershey’s total investment in Bpm’online.
Direct benefits quantified included the redeployment of three administrative staff people
(based on their fully loaded annual cost) and the reductions in fuel and paper and printing
costs. Indirect benefits quantified included the increased productivity of both field sales staff
and managers who now spend less time reviewing accounts, planning their field sales visits,
and updating account information. The productivity savings were quantified based on the
annual fully loaded cost of those employees using a productivity correction factor to
account for the inefficient transfer of time between time saved and additional time worked.
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Not quantified in the ROI analysis were the savings in manager time and benefit of
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accelerating time-to-productivity for new field sales employees and those taking on new
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accounts, which are likely to become more evident over time as Hershey’s continues to
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grow.
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FINANCIAL ANALYSIS
direct and indirect benefits
All calculations are based on Nucleus Research's independent analysis of the expected costs and benefits associated with the
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Annual ROI: 165%
Payback period: 0.8 years
BENEFITS
Direct
Indirect
Total per period
COSTS
-
CAPITALIZED ASSETS
Software
Hardware
Project consulting and personnel
Total per period
COSTS
-
DEPRECIATION
Software
Hardware
Project consulting and personnel
Total per period
COSTS
-
EXPENSED
Software
Hardware
Consulting
Personnel
Training
Other
Total per period
FINANCIAL ANALYSIS
All government taxes
Cost of capital
Net cash flow before taxes
Net cash flow after taxes
Annual ROI
-
Annual ROI
-
direct benefits only
Net Present Value (NPV)
Payback period
Average Annual Cost of Ownership
3-Year IRR
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Pre-start
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0
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0
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0
Pre-start
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0
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0
0
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0
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Pre-start
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0
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0
0
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0
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Pre-start
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30,600
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10,000
30,000
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70,000
55,385
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0
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195,985
Results
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45%
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7.0%
(195,985)
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(107,792)
(107,792)
__rendered_path__429
195,985
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144%
Year 1
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206,160
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288,462
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494,622
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Year 1
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0
__rendered_path__83
0
__rendered_path__84
0
__rendered_path__83
0
__rendered_path__84
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Year 1
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0
__rendered_path__197__rendered_path__68
0
__rendered_path__83
0
__rendered_path__84
0
__rendered_path__230
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Year 1
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42,000
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0
__rendered_path__197__rendered_path__68
40,000
__rendered_path__83
128,000
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0
__rendered_path__230
0
__rendered_path__84
210,000
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__rendered_path__84
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Year 1
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__rendered_path__197__rendered_path__68
__rendered_path__363
284,622
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156,542
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145%
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-2%
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38,509
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__rendered_path__404
405,985
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Year 2
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206,160
__rendered_path__79
288,462
__rendered_path__84
494,622
__rendered_path__113
__rendered_path__112
Year 2
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0
__rendered_path__79
0
__rendered_path__84
0
__rendered_path__79
0
__rendered_path__84
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Year 2
__rendered_path__112
0
__rendered_path__192__rendered_path__68
0
__rendered_path__79
0
__rendered_path__84
0
__rendered_path__227
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Year 2
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42,000
__rendered_path__112
0
__rendered_path__192__rendered_path__68
3,400
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128,000
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0
__rendered_path__227
0
__rendered_path__84
173,400
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__rendered_path__84
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Year 2
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__rendered_path__192__rendered_path__68
__rendered_path__360
321,222
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176,672
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155%
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7%
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192,821
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__rendered_path__407
289,692
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solution.
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Year 3
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206,160
__rendered_path__8
288,462
__rendered_path__9
494,622
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__rendered_path__11
__rendered_path__67__rendered_path__62
Year 3
__rendered_path__83
0
__rendered_path__80
0
__rendered_path__113
0
__rendered_path__67__rendered_path__62
0
__rendered_path__83
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Year 3
__rendered_path__83
0
__rendered_path__80
0
__rendered_path__113
0
__rendered_path__197__rendered_path__62
0
__rendered_path__83
__rendered_path__80
Year 3
__rendered_path__230
0
__rendered_path__80
0
__rendered_path__113
3,400
__rendered_path__197__rendered_path__62
128,000
__rendered_path__83
0
__rendered_path__80
0
__rendered_path__230
131,400
__rendered_path__80
__rendered_path__83
__rendered_path__80
Year 3
__rendered_path__113
__rendered_path__197__rendered_path__62
__rendered_path__363
363,222
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199,772
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165%
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18%
__rendered_path__404
355,895
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0.7 years
__rendered_path__404
236,928
__rendered_path__429
144%
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