The Global Account Management

The globalization of industries and intense competitive environments have induced some firms to undertake global account management (GAM), a systematic, firm-wide process that suppliers use to identify, develop, and retain their most important customers in global business-to-business markets. When they expand internationally, firms often use global sourcing and expect suppliers to provide goods and services worldwide with consistent quality, efficiently, and at harmonized prices.

When mergers and acquisitions reduce the number of buyers, fewer and larger customers tend to purchase higher volumes, which gives buyers purchasing power over suppliers. Suppliers hope to protect their key business, because if they fail to supply a worldwide buyer in one market, they may endanger their business with that buyer in other markets as well. They also tend to prefer to accelerate their organic growth by deliberately concentrating their resources on select global customers, or global accounts.

Global accounts benefit from GAM, because this approach entails a value adding sourcing and innovation partnership. Overall, GAM can help both suppliers and their worldwide accounts strengthen their relationship and expand their global business. A supplier’s GAM program usually consists of a program director and program manager, several global account managers and their team members, and specialists who provide product-related, logistical, financial, and legal support. For example, Procter & Gamble introduced a dedicated, several-hundred-person GAM team, led by one worldwide account manager, to cater on a worldwide basis to Wal-Mart Stores, Inc., its single largest customer.

Thus, GAM programs may locate at the corporate level if they cater to firm-wide customers, as in the case of Procter & Gamble, or they may be situated within strategic business units if global customers purchase mostly from a particular business unit. The program director generally provides strategic direction for the GAM program and reports directly to the board; the program manager usually is responsible for developing and operating the processes, tools, and systems required for GAM.

Important program processes include global accounts selection and de-selection, appointment and development of global account managers, account business planning, multilevel relationship building, customer knowledge management, and relationship performance measurement. Common criteria for selecting and deselecting worldwide accounts encompass, for example, future business volume and profit potentials, strategic and cultural alignment between the organizations, and the degree to which the customer purchases on a centralized, global basis. Perhaps the most important function in a GAM program is the global account manager (GAM).

Suppliers generally assign one full-time GAM per global account, whom they locate in geographic proximity to the headquarters of the global account. Thus, the GAM provides a prime contact for the buyer and orchestrates all supplier activities worldwide. The GAM also leads the multifunctional global account team, which should mirror the customer’s buying team to ensure optimal collaboration. The role and responsibilities of a GAM thus go beyond those of an international sales manager; the GAM develops and leads the implementation of a global, long-term collaboration strategy with the global account.

This effort requires in-depth understanding of the global account’s markets, entrepreneurial skills to identify and develop new business, and political aptitude to align the supplier’s internal organization with that of the global customer. At IBM, for example, the GAM’s position equates with that of a managing director who leads a dedicated business team that caters to a particular global account on a full profit and-loss basis. The challenges of GAM primarily pertain to the organizational complexity and cultural diversity inherent to such global, inter-organizational relationships.

For example, GAM programs introduce additional global structures that attempt to coordinate the supplier’s activities by embracing several functions, markets, and business units, which often pursue diverging objectives. Furthermore, teamwork in a GAM team may be challenging because of the cultural diversity that results from different functional mindsets, such as research and development versus marketing, or from team members with different educational or cultural backgrounds. Consequently, suppliers implementing GAM attempt to align their go to-market strategies and reward systems firm-wide to ensure goal congruence.

Furthermore, they try to develop GAM talent and the collaborative capabilities of organizational members. Finally, suppliers need to resolve the global-local tensions that arise in response to a firm-wide program like GAM, such as product/service adaptation versus standardization.

Author: Francesco Zinzaro
Article Source: EzineArticles.com
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