1. Managing global accounts
Based on the article by
George S Yip and Audrey.J.M. Bink
Harvard Business Review, September 2007

2. Understanding Global Account Management
Global Account Management(GAM) is the natural extension of national account management
The worldwide operations of global customers are treated as one integrated account
Consistent pricing, product specifications and service

3. Why MNC customers prefer GAM
Centralised purchasing leads to more transparent price
Consolidation of orders means
Volume discounts
Ability to manage product specifications and service more effectively

4. When is GAM appropriate?
From a suppliers’ perspective, GAM is appropriate if :
Products and services need global coordination and are profitable enough to justify it
MNC customers want GAM
These customers are important to the business
Competitive advantage can be gained from GAM

5. Products and services
Prime candidates are complex products and services like computers and services like computers, process cotnrols, specialty chemicals and corporate banking
High margin products
Globally consistent or compatible
Must meet complex specs across borders

6. Customers’ wants Customers may expect
Suppliers to provide a single point of contact
Coordinated resources for serving them
Globally uniform / consistent prices/ discount schemes
Globally standardised products and services
Globally consistent service quality/ performance

7. Importance of MNC customers
Amount of revenues accounted for by such customers
Importance of specific customers in terms of revenue share

8. Competitive advantage
Useful in global/regional bidding situations
If competitors offer GAM, no option but to replicate them

9. Which customers are candidates for GAM?
Good size and revenue potential
Geographic spread
Integration capabilities
Existence of appropriate structure, processes and information systems
Integration capabilities are high if
Strategies are developed at the global level
Most businesses have global P&L
Country heads focus on servicing the activities of global business lines, functions and customers
Global teams manage or coordinate most primary activities
Information is captured and shared globally in real time
A truly global culture permeates the organization

10. Forms of GAM
Coordination GAM
Control GAM
Separate GAM

11. Coordination GAM GAM unit is weak
National sales organizations retain a great deal of power
GAM managers coordinate the sales and support activities of the national operations
National operations may take the lead in sales but deals may have to abide by global terms
GAM managers take the lead while expanding accounts into new product lines or regions where the supplier has no business

12. Coordination GAM (Contd)
This approach makes sense when
Local relationships are extremely important
The need to standardise services across borders is relatively slight
The supplier lacks the integration capabilities needed to manage MNC customers
This approach is
Easy to implement
Does not disturb the existing organizational structure
Is less costly

13. Control GAM
Divides responsibility for global customers between GAM and national operations
Upper hand remains with GAM.
GAM has ultimate responsibility for the account.
GAM managers have the authority to enforce actions worldwide and the final say when disputes with national managers arise.
Usually some form of matrix structure is used. Local managers report to the national organization as well as GAM.
Usually includes a support team that identifies opportunities, makes plans for the global account, manages information and communication and strengthens the relationship network.

14. Control GAM (Contd) Costs more than coordination GAM
Involves changes to the company’s organizational structure
Creates friction between GAM and national operations
Aligns the organization behind one customer focal point
Achieves a better balance between global integration and local autonomy
Engages many parts of the company at multiple levels

15. Control GAM is most appropriate when
Product and customer attributes point to a strong need for GAM
Compelling reasons exist to anchor the account in national operations
Supplier is moderately capable of integrating its global sales, delivery and service

16. Separate GAM
A separate business unit can be created with total responsibility for global accounts
Frontline employees belong to the GAM organization
GAM also has its own technical support and sales and service
But GAM does not contain or control back end functions such as R&D and manufacturing

17. Separate GAM implies Unified control of customer relationship
Less friction between global and local operations
Makes it easier to manage account information
Results in better customer services
Involves a major reorganization
Results in less sharing of best practices with other parts of the company

18. Separate GAM is suitable when
All the drivers for GAM are strong
Customers provide a lot of business that is big and profitable enough to support the additional costs
Suppliers and customers have the advanced capabilities for coordinating and integrating their transactions and other activities

19. Customising GAM for different customers
Different customers may need different types of GAM
But it is hard and expensive to do this
The best solution is to customise one form of GAM.
The customisation can be with respect to
The number of items covered
Strictness of the terms and conditions that apply to the individual national operations of a given customer
Level of service
Involvement of the suppliers’ national operations

20. Conclusion
GAM must fit into the context of a company’s overall strategy/structure
Do not start with an ambitious approach
Start with coordination GAM
As integration capabilities improve and global relationship deepens, separate GAM can be adopted