LAPPEENRANTA UNIVERSITY OF TECHNOLOGY School of Business and Management Anton

141 Pages·2016·2.04 MB·English

by  Jääskeläinen Anton

LAPPEENRANTA UNIVERSITY OF TECHNOLOGY
School of Business and Management

Anton Jääskeläinen
Managing and utilizing information flow for new products’ periodic account
sales process
Master’s thesis

Supervisors: EVP Rauno Hiltunen & EVP Elli Siltala
1st Examiner: Professor Vesa Harmaakorpi
2nd Examiner: D.Sc. (Econ. & Bus. Adm.) Tuija Oikarinen
ABSTRACT
Author: Anton Jääskeläinen
Subject: Managing and utilizing information flow for new products’ periodic
account sales process
Year: 2016 Place: Helsinki
Master's thesis. Lappeenranta University of Technology. School of Business and
Management, Innovation and Technology Management
117 pages, 17 figures, 27 tables and 3 appendices
Examiner(s): Professor Vesa Harmaakorpi &
D.Sc. (Econ. & Bus. Adm.) Tuija Oikarinen
Keywords: Knowledge Management, Process Modeling, Embedded Knowledge,
Tacit Knowledge, Knowledge Codification, Process Management.
The goal was to understand, document and module how information is currently
flown internally in the largest dairy organization in Finland. The organization has
undergone radical changes in the past years due to economic sanctions between
European Union and Russia. Therefore, organization’s ultimate goal would be to
continue its growth through managing its sales process more efficiently.

The thesis consists of a literature review and an empirical part. The literature
review consists of knowledge management and process modeling theories. First,
the knowledge management discusses how data, information and knowledge are
exchanged in the process. Knowledge management models and processes are
describing how knowledge is created, exchanged and can be managed in an
organization. Secondly, the process modeling is responsible for visualizing
information flow through discussion of modeling approaches and presenting
different methods and techniques. Finally, process’ documentation procedure was
presented. In the end, a constructive research approach was used in order to
identify process’ related problems and bottlenecks. Therefore, possible solutions
were presented based on this approach.

The empirical part of the study is based on 37 interviews, organization’s internal
data sources and theoretical framework. The acquired data and information were
used to document and to module the sales process in question with a flowchart
diagram. Results are conducted through construction of the flowchart diagram and
analysis of the documentation. In fact, answers to research questions are derived
from empirical and theoretical parts.

In the end, 14 problems and two bottlenecks were identified in the process. The
most important problems are related to approach and/or standardization for
information sharing, insufficient information technology tool utilization and lack
of systematization of documentation. The bottlenecks are caused by the alarming
amount of changes to files after their deadlines.
TIIVISTELMÄ
Tekijä: Anton Jääskeläinen
Työn nimi: Tiedon hallinta ja hyödyntäminen jakson myyntiprosessissa
uutuuksien osalta
Vuosi: 2016 Paikka: Helsinki
Diplomityö. Lappeenrannan teknillinen yliopisto. Tuotantotalouden tiedekunta,
Innovaatio- ja teknologiajohtaminen
117 sivua, 17 kuvaa, 27 taulukkoa ja 3 liitettä
Tarkistaja(t): Professori Vesa Harmaakorpi & KTT Tuija Oikarinen
Hakusanat: Tietämyksenhallinta, prosessien mallintaminen, prosessien
johtaminen, tietämyksen kuvaaminen, hiljainen tieto, sisäistetty tieto.
Tarkoituksena oli sisäistää, dokumentoida ja mallintaa miten informaatio virtaa
tällä hetkellä Suomen suurimmassa meijeriorganisaatiossa. Kyseinen organisaatio
on läpikäynyt radikaaleja muutoksia viime vuosina johtuen Euroopan unionin ja
Venäjän välisistä talouspakotteista. Tästä johtuen yrityksen tärkein tavoite on
jatkaa kasvua hallitsemalla myyntiprosessia entistä tehokkaammin.

Diplomityö koostuu kirjallisuuskatsauksesta ja käytännön osuudesta.
Kirjallisuuskatsaus koostuu tietämyksenhallinnan ja prosessien mallintamisen
teorioista. Alussa tietojohtamisen osalta käydään läpi miten data, informaatio ja
tieto vaihtuvat keskenään prosessissa. Lisäksi, tietohallinnan mallien ja prosessien
osalta esitellään miten tietoa luodaan, vaihdetaan ja hallitaan organisaatiossa.
Prosessien mallintamisosiossa keskitytään tietovirtojen visualisointiin käymällä
läpi mallinnuksen lähestymistapoja. Lisäksi esitellään erilaisia prosessien
mallinnuksen metodeja ja tekniikoita. Teoriaosion lopuksi esitellään tiedon
kirjaamisprosessi. Tutkimuksessa käytettiin konstruktiivista lähestymistapaa
prosesseihin liittyvien ongelmien ja pullonkaulojen paikantamiseen.
Tutkimuksessa löydetyt ratkaisuehdotukset perustuvat tähän lähestymistapaan.

Työn käytännön osuus perustuu 37:ään haastatteluun, yrityksen sisäisiin
tietolähteisiin ja teoreettisen viitekehykseen. Hankittu data ja informaatio
käytettiin myyntiprosessin dokumentointiin ja mallintamiseen vuokaavion avulla.
Tulokset muodostettiin kehitetyn vuokaavion ja dokumentaatioanalyysin pohjalta.
Vastaukset tutkimuskysymyksiin ovat johdettu käytännön ja teorian osioista.

Työn tuloksena esitettiin 14 ongelmaa ja kaksi pullonkaulaa prosessissa.
Merkittävimmät ongelmat liittyivät tiedonjakamisen lähestymistapaan ja/tai
standardisointiin, IT-työkalujen hyödyntämiseen ja dokumentoinnin
systematisoinnin puutteeseen. Pullonkaulat johtuivat pääasiassa dokumenttien
merkittävistä muutoksista määräaikojen jälkeen.
ACKNOWLEDGMENTS
A lot of effort was put into this thesis and I hope that you will find it useful.
During the process of writing this thesis I experienced a lot of ups and downs.
Nevertheless, writing this page feels like the hardest task to do: reliving and
acknowledging what has been done in the past. A long way has been walked. At
this point, I would like to show gratitude to all my friends around the world and to
my University for affecting my development as a person and finally bringing me
to the current phase of my life. After submitting this thesis, I will be graduating
after c. six years of studying in LUT (Lappeenranta, Finland), one semester in
BME (Budapest, Hungary) and one semester in Paderborn University (Paderborn,
Germany). These years were the best and I certainly do not regret them. In fact,
LUT often felt like my second home. On the contrary, I would not go back in
time, if a time machine was invented. The best things can happen once in a
lifetime or best is yet to come!

Tärkeimmät kiitokset kuuluvat perheelleni. Спасибо маме, папе, сестре и
остальным родственникам за понимание и поддержку во время учёбы и
написания диплома. Kiitos äidilleni Irinalle, isälleni Alexanderille ja siskolleni
Ainolle. Haluaisin myös kiittää seitsemää veljestä: Alexander, Jonne, Lauri, Nino,
Panu ja Peter suomen kielen opetuksesta, tuesta, avusta ja yhdessä vietetystä
ajasta. Kiitän erikseen myös Helsingin kavereita: Joonas, Niko, Toomas, ja Vainö
erittäin viihtyisästä seurasta diplomityön aikana. Haluaisin mainita vielä Gertin ja
Pavelin, joiden kanssa olen viettänyt paljon aikaa Vantaalla opiskeluvuosien
alussa. Kiitos D.Sc Samulille annetuista neuvoista ja suunnan näyttämisestä
diplomityön aikana. Kiitos kuuluu tietenkin Natalialle, joka on ollut avulias ja
kärsivällinen kanssani.

Kiitokset vielä Annalle, Ellille, Hilkalle, Marikalle, Mikaelille, Raunolle, Vesalle
ja kaikille muille haastateltaville. Kiitän vielä kerran SVP Rauno Hiltusta ja HR
Paula Arolaa, jotka ovat mahdollistaneet tämän kaiken. Kiitos erityisesti
diplomityön tarkastajille Prof. Vesa Harmaakorpi ja KTT Tuija Oikarinen.

Helsingissä 22.6.2016 Anton Jääskeläinen
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TABLE OF CONTENTS
1 INTRODUCTION ............................................................................................ 10
1.1 Background of the research ......................................................................... 10
1.2 Objectives and scope ................................................................................... 14
1.3 Structure of the report .................................................................................. 16
1.4 Limitations of the study ............................................................................... 17
1.5 Execution of the study ................................................................................. 17
2 LITERATURE REVIEW ................................................................................ 20
2.1 Knowledge management ............................................................................. 20
2.1.1 Tacit and explicit knowledge ................................................................ 25
2.1.2 Knowledge conversion model .............................................................. 27
2.2 Modeling information flow.......................................................................... 28
2.2.1 Benefits and drawbacks of modeling .................................................... 30
2.2.2 Different modeling levels ..................................................................... 34
2.2.3 Different modeling techniques ............................................................. 36
2.2.4 Flowchart modeling steps ..................................................................... 39
2.3 Summary of literature review ...................................................................... 44
3 RESEARCH METHODOLOGY .................................................................... 45
3.1 Constructive research approach ................................................................... 45
3.2 Different research approaches ..................................................................... 48
3.3 Content analysis ........................................................................................... 50
3.4 The research process of the study ................................................................ 50
4 CASE COMPANY INTRODUCTION ........................................................... 53
4.1 About Valio Oy............................................................................................ 53
4.2 Valio Oy’s core processes ........................................................................... 54
5 EMPIRICAL STUDY ...................................................................................... 57
5.1 Group interviews ......................................................................................... 57
5.2 Process map ................................................................................................. 60
5.3 New product’s development process ........................................................... 62
5.4 Periodic account sales process ..................................................................... 65
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5.4.1 Launch plan review............................................................................... 67
5.4.2 Sales action preparation ........................................................................ 69
5.4.3 Sales action ........................................................................................... 71
5.5 Analysis of documentation .......................................................................... 77
5.5.1 Launch plan review............................................................................... 80
5.5.2 Sales action preparation ........................................................................ 86
5.5.3 Sales action ........................................................................................... 93
5.6 Summary of analysis.................................................................................... 98
6 RESULTS ........................................................................................................ 101
6.1 Answering to research question one .......................................................... 101
6.2 Answering to research question two .......................................................... 102
6.3 Answering to research question three ........................................................ 104
6.4 Answering to research question four ......................................................... 108
6.5 Answering to research question five.......................................................... 109
6.6 Summary of Account Sales Process .......................................................... 111
7 DISCUSSION .................................................................................................. 114
7.1 Key findings............................................................................................... 114
7.2 Validity and reliability of the research ...................................................... 116
7.3 Suggestions for further research ................................................................ 117
8 CONCLUSION ............................................................................................... 118
8.1 Empirical conclusion ................................................................................. 120
8.2 Theoretical conclusion ............................................................................... 122
8.3 Managerial implications ............................................................................ 125
REFERENCES .................................................................................................. 128
APPENDICES .................................................................................................... 139
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LIST OF ABBREVIATIONS
APO Advanced Planner and Organizer
ASPro Account Sales Process
CRM Customer Relationship Management
EDI Electronic Data Interchange
ERP Enterprise Resource Planning
EVP Executive Vice President
FS Food Service
IDEF Integrated Definition
IT Information Technology
K-J Jiro Kawakita’s technique
KM Knowledge Management
MS Microsoft Office
PDF Portable Document Format
POS Point Of Sale
PPA Preliminary risk analysis
ProMa Product development and Marketing
RAD Role Activity Diagrams
SAP Systems, Applications and Products in data processing
SECI Socialization, Externalization, Combination and Internalization
SVP Senior Vice President
SVP of BU Senior Vice President of Business Unit
TiTo Order and Delivery
VP Vice President
e.g. For example
etc. And so forth
i.e. That is
F Feedback
POS Retail’s POS-data
VSR Valio’s sales report
cf. Compare
Σ Sum
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FIGURES
Figure 1. Execution of the research. ...................................................................... 18
Figure 2. Visualized correlation between data, information and knowledge. ....... 22
Figure 3. Four basic knowledge management processes (adapted from Alavi &
Leidner, 2001, pp. 110-113). ......................................................................... 24
Figure 4. Knowledge conversion model (adapted from Nonaka, 1994, pp. 19).... 28
Figure 5. A simplified process. .............................................................................. 32
Figure 6. Different modeling levels (adapted from Hannus, 2004, p. 105). .......... 35
Figure 7. Step-by-step procedure for process documentation (adapted from
Nesbitt, 1993, p. 34; Ungan, 2006, p. 403). ................................................... 40
Figure 8. Flowchart diagram’s symbols and descriptions. .................................... 42
Figure 9. A simple flowchart (adapted from Nesbitt, 1993, p. 37)........................ 43
Figure 10. Market test types (adapted from Kasanen, et al., 1993, p. 253). .......... 47
Figure 11. Constructive research approach with respect to other approaches
(adapted from Kasanen, et al.,1993, p. 257). ................................................. 49
Figure 12. Valio Oy’s core processes. ................................................................... 55
Figure 13. Process map from new product’s development and sales perspective. 62
Figure 14. Process of new product development and sales. .................................. 63
Figure 15. Finalizing phase and periodic account sales process. .......................... 66
Figure 16. Detailed process diagram of periodic account sales process................ 79
Figure 17. Causal map of identified problems..................................................... 121

APPENDICES
Appendix 1. Interviewees’ information.
Appendix 2. Group interview 15.1.2016.
Appendix 3. Group interview 25.1.2016.
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TABLES
Table 1. Research questions and objectives. ......................................................... 15
Table 2. Popular modeling techniques, their description and model type (adapted
from Vergidis, et al., 2008, p. 71 and Aguilar-Saven, 2004, p. 134)............. 37
Table 3. Three steps for content analysis (adapted from Miles & Huberman, 1994,
pp. 10-12). ...................................................................................................... 50
Table 4. Periodic account sales process’s Feedback. ............................................ 75
Table 5. Launch plan and reviewed Launch plan. ................................................. 81
Table 6. Period’s steering committee’s material. .................................................. 82
Table 7. Product data sheet (Perus/SAP). .............................................................. 84
Table 8. Period’s information package .................................................................. 85
Table 9. Prioritization. ........................................................................................... 86
Table 10. Period’s sales group meeting’s material. ............................................... 87
Table 11. Common view on period’s goals and actions. ....................................... 88
Table 12. Marketing campaign plan. ..................................................................... 89
Table 13. Pricing program. .................................................................................... 90
Table 14. Product group’s range and marketing campaigns & Customer’s decision
on product range and marketing campaigns. ................................................. 91
Table 15. Analysis material. .................................................................................. 92
Table 16. Sales pages. ............................................................................................ 93
Table 17. Feedback from notes. ............................................................................. 94
Table 18. Customer’s feedback (Digium). ............................................................ 94
Table 19. Sales forecast after product range decision. .......................................... 95
Table 20. Forecasted sales (APO/SAP). ................................................................ 96
Table 21. Field sales group’s actions (CRM/SAP). ............................................... 97
Table 22. Customer’s product order (EDI). ........................................................... 98
Table 23. Documents analyzed during the study. .................................................. 99
Table 24. Identified problems and their possible solutions. ................................ 106
Table 25. SWOT-analysis of ASPro’s periodic account sales process. .............. 112
Table 26. Answers to empirical questions. .......................................................... 118
Table 27. Answers to theoretical questions. ........................................................ 119
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1 INTRODUCTION
The purpose of this chapter is to introduce a reader to the research. The reader will
gain understanding of importance of this work after getting acquainted with the
following text about background of the research, objectives, scope, structure of
the report, limitations and execution of the study.

1.1 Background of the research
In year 1943, Sir Winston Churchill said in his speech at Harvard University:
"The empires of the future are the empires of the mind" (Bethell, 1998).
Traditional accounting methods are failing to capture the full value of an
organization. (Allee, 1997, p. 74) Organizations are recognizing that knowledge is
their core asset and it needs to be studied properly. (Xuelian, et al., 2015, p. 257)

In the current age of information, organizations strive for differentiation rather
than scale. Differentiation can be achieved through better knowledge of
organization’s customers (Xuelian, et al., 2015, p. 257). Only few firms are able
to improve organization’s performance through creating more value for
customers. (Smith & McKeen, 2005) Most commonly, successful companies use
Customer Relationship Management (CRM) system to absorb and storage as well
as discover customer related information, such as names, favorites, order history
and habits, requirements, etc. Other popular Information Technology (IT) tools
are such as Enterprise Resource Planning (ERP), Contact Centre and e-business
systems that gather customer data at every possible contact point (Rollins &
Halinen, 2005). Measurement tools are also developed and implemented in order
to identify customer’s value to organization (Reinartz & Kumar, 2002).

Knowledge has become the basis of competitive advantage for an organization
and has formed a valuable strategic resource (cf. Bueren, Schierholz, Kolbe &
Brenner (2004)). In addition, the most important type of knowledge is the
customer knowledge, which is emphasized by numerous publications, and
empirical researches and being quoted as the most important type of knowledge to
assist organizations actions effectively. (Bueren, et al., 2004) In other words,
organization as a whole desires to know what it actually knows about customers