Enhancing the quotation process of a

freight forwarding company

Case: ISA Nordic

Härkönen Sami

Master’s thesis
February 2023
Program in Digital Supply Chain
 Description

Härkönen, Sami

Enhancing the quotation process in freight forwarding company. Case: ISA Nordic

Jyväskylä: Jamk University of Applied Sciences, February 2023, 60 pages.

Degree Program in Digital Supply Chain. Master’s thesis.

Permission for open-access publication: Yes

Language of publication: English

Abstract

The quotation process is an essential part of those business organizations that sell services or products to
customers or end users. Giving quotations professionally and including all the needed elements are crucial
parts of the process when the company wants to gain more orders and new customers. Giving quotations
effectively and profitably is part of company growth when reaching its targets.

The objective of this study was to find out how the quotation process is functioning and managed in ISA
Nordic at the moment and if the process follows and supports the company strategy. In addition, the objec-
tive was to find ways to enhance the quotation process to be more functional and increase the company's
profit.

The study was implemented by utilizing qualitative research methods. The theoretical part consisted of a
literature review, which was used as a reference to find some answers to the research questions. The re-
search was executed as a case study, and interviews and observation were used as research techniques.

The conclusion of the study was that several processes could be developed further and implemented in a
more advanced way to enhance the quotation process so that it would follow and support the company
strategy.

The result of the study was several suggestions on how to improve the quotation process: to unify the out-
come of quotations in all company countries, use two different quotation methods in various business ar-
eas, and improve the follow-up on quotations. The main result was suggestions on how the company
should develop the existing quotation tool and fully integrate it into a company ERP system to fully exploit
and harvest its benefits. In addition, future research topics were covered and recommended to the com-
pany.

Keywords/tags (subjects)

Logistics, Quotation, Process improvement

Miscellaneous (Confidential information)

Appendix 3 is confidential and removed from the public thesis. The basis for secrecy is section 24(17) of the
Act on the Openness of Government Activities (621/1999), a company’s business or trade secret. The pe-
riod of secrecy is five (5) years. The secrecy will end on 04 February 2028.
 3

Contents

1 Introduction ................................................................................................................ 6
1.1 Research questions ........................................................................................................... 6
1.2 Limitations of this study .................................................................................................... 7
1.3 ISA Nordic history .............................................................................................................. 7
1.4 ISA Nordic strategy ............................................................................................................ 8
1.4.1 Organization............................................................................................................. 8
1.4.2 Why is ISA Nordic unique? ....................................................................................... 9
2 Overview of research methods .................................................................................. 10
2.1 Quantitative research...................................................................................................... 11
2.2 Qualitative research ........................................................................................................ 11
2.3 Interviews ........................................................................................................................ 13
2.4 Observation ..................................................................................................................... 14
2.5 The actual form of the study ........................................................................................... 14
2.6 Ethics of this study .......................................................................................................... 14
3 Business strategy ....................................................................................................... 15
3.1 Goals and importance of the strategy ............................................................................ 16
3.2 Creation of the strategy .................................................................................................. 18
3.3 Implementation of the strategy ...................................................................................... 19
3.4 Summary of business strategies...................................................................................... 20
4 Leadership and Organization...................................................................................... 21
4.1 Leadership strategies in theory ....................................................................................... 22
4.1.1 Behavioral influence strategy ................................................................................ 22
4.1.2 Situational adaptation as a leadership strategy .................................................... 22
4.1.3 Power-influence strategies .................................................................................... 22
4.1.4 The inspirational approach .................................................................................... 23
4.2 Leadership in the real world ........................................................................................... 23
4.3 Organizations .................................................................................................................. 24
4.3.1 Change and challenges in organizations................................................................ 26
4.3.2 Diversity in workplaces .......................................................................................... 26
4.3.3 Development in organizations ............................................................................... 27
4.4 Summary of leadership and organization ....................................................................... 28
5 Process management, customer perspective, offers, and pricing ................................ 29
5.1 Business process.............................................................................................................. 29
 4

5.2 Process quality, evaluation, and measuring ................................................................... 30

5.3 ERP systems ..................................................................................................................... 30
5.4 The importance of the ERP system ................................................................................. 32
5.5 Tendering, offers, and quotation .................................................................................... 32
5.6 Pricing .............................................................................................................................. 33
5.7 To focus on the right customers ..................................................................................... 35
5.8 Growth............................................................................................................................. 36
5.9 Summary of process management, customer perspective, offers, and pricing ............. 37
6 Implementation of the research ................................................................................. 38
6.1 Initial interviews. Mapping of the situation on starting point. ....................................... 38
6.2 The findings of the initial interviews ............................................................................... 39
6.2.1 Simple excel spreadsheet method ........................................................................ 39
6.2.2 Advanced excel method ........................................................................................ 41
6.2.3 Excel pro method / Quotation tool ....................................................................... 41
7 Results....................................................................................................................... 42
7.1 Quotation tool ................................................................................................................. 43
7.1.1 Functions needed to be included in the quotation tool........................................ 44
7.1.2 Using the quotation tool........................................................................................ 45
7.1.3 Functions needed to be added to the quotation tool ........................................... 46
7.2 Integrating quotation process to ERP ............................................................................. 47
7.2.1 What does it need to perform the actual integration? ......................................... 49
7.2.2 A separate system without integration ................................................................. 49
7.3 How much money can be earned by enhancing the quotation process ........................ 50
8 Discussion and conclusions ........................................................................................ 50
8.1 Discussion of research questions .................................................................................... 52
8.2 Future studies.................................................................................................................. 53
References ........................................................................................................................ 54
Appendices ....................................................................................................................... 57
Appendix 1. Initial interview questions.................................................................................... 57
Appendix 2. Interview questions on the second and final interview round............................ 58
Appendix 3. Benefits for the ISA Nordic (secret) ..................................................................... 59

Figures

Figure 1. Presentation of ISA Nordic ............................................................................................. 9

Figure 2. What's on top managements agenda .......................................................................... 16
 5

Figure 3. Levels of strategy ......................................................................................................... 20

Figure 4. How the leader points the direction of company ........................................................ 23
Figure 5. The traditional way how organizations are built ......................................................... 25
Figure 6. Systems of the company are gathered in ERP ............................................................. 31
Figure 7. All the parts are tightly linked to each other ............................................................... 34
Figure 8. Stylish outlook of quotation (secret) ........................................................................... 59

Tables

Table 1 Comparison between qualitative and quantitative research methods ......................... 10

Table 2. Sales increased and time saved with the quotation tool (secret) ................................ 60
 6

1 Introduction

This study aims to present how the quoting process could be upgraded or processed to a level
meeting the needs of the company’s growth. The need for this was initially brought up in the man-
agement team’s meeting. ISA Nordic operates in four countries with six offices and roughly 50 em-
ployees. Even though the company is not a huge global player, there are still many demands and
obligations to consider when leading the moderate-size company toward future success. The com-
pany has been on the market for 50 years, and of course, during that time, many changes have oc-
curred. The business environment has changed dramatically from previous decades and even
more from the first days the company was established.

The Danish company ISA Nordic has a stable market share in the freight forwarding field in the
countries it represents. It performs all forms of freight forwarding, pharma, import and export by
land, sea, and air, customs clearances, and many other assignments. Like in this business field, cus-
tomers are typically located in Europe and scattered worldwide. The company does not focus on a
narrow niche but takes care of all kinds of freight forwarding orders. Since the business has a wide
variety of customers, many locations in North Europe, and a healthy appetite for growth, leading
the company is, of course, necessary. To grow, one must acquire new customers or already have a
solid customer foundation (Isa Nordic history and strategy, 2021).

1.1 Research questions

When choosing a topic for the final thesis, it should be considered that the topic is personally in-
teresting. In the process, it is also essential to consider delimitation so that with the available re-
sources, one can manage to collect material that can be used to show what the research is looking
for (Hirsjärvi & Hurme 2009, pp. 79-81).

Upgrading processes and finding ways to do operations more optimally is a very interesting topic,
and that was one of the key reasons for choosing this to be the subject of the study. When one has
worked for a long time with the same tasks, one can lose the big picture or get used to perform
tasks the same way they have always been done, even though that would not be the most effec-
tive way to execute tasks. I have an excellent opportunity to look at processes as an outsider since
 7

I worked in the company for only half a year before starting to write this thesis. The research ques-
tions are based on my knowledge of the company and an initial interview with the ISA Nordic man-
agement team. In that context, the main focus of this study was defined, as well as the limitations
of the study.

1. How is the quotation process functioning and managed now?

2. Does the quotation process follow and support the company strategy?
3. What benefits would it provide to enhance the quotation process, and how should it be ex-
ecuted?

1.2 Limitations of this study

Optimization of finding the right price is not part of this research since defining the right price for a
product, or a service is a vast area of research. When considering the resources available and the
goals of this study, it is not reasonable to focus on pricing. Instead, this study focuses on the actual
quotation process and how it should be developed. The focus will be on finding a better solution
for the offering/quotation process on the technical and practical side. Regardless, this research
does not focus on the deep technical side of how the offering process can be integrated into a
company’s ERP system. Possible integration to the ERP system is not either part of this work. Many
companies market different kinds of tools for quotation processes and optimization, which can be
found on the internet. All the possibilities are not researched here but only the most promising
ones. Limitations set for this work are put together with the ISA Nordic management team. The
commonly agreed view was that limiting the work to researching the most promising tools and
techniques to enhance the quotation process would currently benefit the company the most out
of alternative development activities.

1.3 ISA Nordic history

Inter-Scan Sea & Air was established in 1972 in Copenhagen, Denmark. The founders managed and
led the business until 2004, when the second generation took over the business's leadership. In
2011 there was a significant company acquisition when the company Linco Freight was bought. In
2015 the owners decided that Denmark was not large enough business area for the company, and
 8

expansions were started with the announcement of a Nordic set-up strategy. The next years fol-
lowed with new offices opened for the company. In 2016 Malmö opened; in 2017, the expansion
went to Norway, and the Oslo office was opened; in 2018, Århus in Denmark; in 2019 was the time
for a new office in Sweden, and the Gothenburg office was opened. In 2020 Stockholm opened,
and the latest expansion following the Nordic strategy was opening the Helsinki office in Finland
(ISA Nordic History, 2021).

1.4 ISA Nordic strategy

ISA Nordic operates in the field of freight forwarding. The overall vision for the whole organization
is to be a wanted forwarding company and cooperation partner in the Nordic area for global for-
warding companies and small and medium-sized companies both locally and globally. Another part
of the vision is that ISA Nordic is the local representative in all the largest cities or transport hubs
in the Nordic area (ISA Nordic strategy, 2021).

1.4.1 Organization

ISA Nordic has offices in four Nordic countries (see Figure 1). The headquarters is close to Copen-
hagen airport. In addition to administration, there are working back-office and operational teams
in the headquarters. The operations also include a warehouse. Other offices are located either in
the capitals of Nordic countries or in the main strategic hubs in these countries. Other offices fo-
cus mainly on the operational side of the business. ISA Nordic currently employs 50 people and is
steadily growing on all the sites. Therefore, expansion and new possibilities have to be seen with
fresh eyes. Growth needs new talented people; only by helping them grow can the company itself
grow and reach its targets (ISA Nordic presentation, 2021).
 9

Figure 1. Presentation of ISA Nordic (ISA Nordic)

1.4.2 Why is ISA Nordic unique?

Being local is important to some degree. Different countries have different legislation and ways of
how processes are done locally. This is extremely important in some niche areas. Customs clear-
ances are part of sending shipments from one country to another, especially on global markets. It
is very common since freight or shipments are not only transported in the EU. Other ISA countries
are part of the EU, except Norway. In Norway, all export and import shipments must be customs
cleared before they can either enter or leave the country. Knowing the local legislation and way to
execute processes locally is sometimes crucially important. It saves money, effort, and time.
Speaking the local language is another benefit. When operating with small-size customers or con-
signees, speaking English fluently is not to be taken for granted. To be able to communicate in the
local language can solve many situations on behalf of the local agent. A few niche areas where ISA
Nordic has high competence are pharma (pharmaceuticals shipments), spare parts on ships, and
furs. ISA Nordic also has a high accreditation level (AAA), which creates trust toward possible new
customers and existing partners. Employees working with pharma shipments are all GDP trained,
and the company is IATA certified, which is definitely one of the competitive advantages. It shows
 10

customers that they are performing business with competent professionals to meet customers’
demands (ISA Nordic presentation, 2021).

2 Overview of research methods

First, the literature review explored the overview of the used research methods. The main re-
search methods are briefly explained here. It is also explained why a particular research method
was chosen for this study.

Table 1 Comparison between qualitative and quantitative research methods (Adapted from Cohen
& al. 2017, chapter 1; Silverman 2013, p. 6)

Qualitative methods Quantitative methods

Focus Meaning, quality Quantity (numerical, how much)

Data Unstructured, textual Structured, numerical

Sample Small number of cases, purposeful Large number of cases, random

Goal Understanding phenomenon Test hypothesis, prediction

Design Flexible Predetermined

Analysis Non-statistical Statistical

Generalizability Usually not generalizable Aiming to generalizability

Examples of met- In-depth interviews, observations, and
hods focus groups Questionnaires, surveys, experiments

According to Cohen, Manion & Morrison (2017, chapter 1), determining the research method is
one of the first steps when conducting research. A researcher has to find out for what purpose re-
search is if he/she wants, for example, to test a hypothesis or theory, develop one, answer the
questions if the research needs to measure something, understand something, or find answers to
questions such as what happens if, what or why? The differences between q ualitative and quantita-
tive research methods can be seen in Table 1.
 11

2.1 Quantitative research

Quantitative research focuses on objective measurements and is very much based on numbers.
Using these research methods, one can analyze statistical, numerical, or mathematical data. The
data can be collected using surveys, polls, or questionnaires. The focus of quantitative research is
on gathering numerical data and using that data in multiple ways (Cohen & et al., 2017, chapter
15).

2.2 Qualitative research

Qualitative research is not based on numbers as much as quantitative research; instead, it focuses
on collecting and analyzing non-numerical data. It can also answer how to understand experi-
ences, opinions, or concepts. It can also be used to gain a deeper understanding of some problems
or generate new ideas for research (Silverman 2013, p. 6). When conducting qualitative research,
the selected companies and persons should be the ones with significance and impact on the mat-
ter from the point of view of the research (Vilkka 2009, p. 98).

Mixed methods are another way of conducting research by combining methods from both qualita-
tive and quantitative methods, which may help to create a more holistic and complete picture
than when only using one of the methods (Cohen & et al., 2017, chapter 2).

Case study

The case study focuses on understanding and producing explicit information about particular
problems or phenomena. It is suitable for a situation where there is a need to understand some
problems more in-depth, solve problems in organizations, or produce development proposals. A
case study can use both kinds of data, qualitative and quantitative; therefore, it should be consid-
ered as a research method. A case study can be used for single- and multiple-case studies (Yin
2009, p. 4 and p. 18).

It is essential to collect information from several different sources in a case study. Possible data
collection methods in qualitative research include interviews, surveys, observation, and written
information. The most used of these are interviews and surveys. However, it does not make sense
 12

to separate different data collection methods sharply; the most important is to use a method suit-
able for the subject to map the matter (Tuomi & Sarajärvi, 2006, pp. 73-74; Eskola & Suoranta,
2001, pp. 14-15).

“The Case Study method allows investigators to retain the holistic and meaningful characteristics
of real-life events – such as individual life cycles, small group behavior, organizational and mana-
gerial processes, neighborhood change, school performance, international relations, and the matu-
ration of industries” (Yin, 2009, p. 4).

Yin (2009, 25) states that the designing of a case study differs from other research methods since
there are no ready solutions or textbooks to cover this area. There are essential viewpoints to con-
sider when creating a research design. It is more than just a plan for the work. The ultimate goal of
the study is to answer research questions. Therefore research design has to be created in a way
that supports reaching this goal. Research questions are necessary since the whole study is based
on them. It is also essential to create clear boundaries for the study so that the focus is kept on the
right details and processes all the time. Components when executing a case study research design
are: Defining research questions, executing study propositions, how to do the analysis, linking
gathered data to propositions, and finally, choosing the criteria for interpreting the findings (Yin,
2009, pp. 27-35).

After creating the research design, the next step is the collection of data. That should not be done
without proper preparations. The usual mistake with a case study is to assume that it is easy and
that not so many skills are needed to execute one. If preparation is not done thoroughly, the
whole study can be jeopardized, and the whole planning phase can be worth nothing (Yin, 2009,
pp. 67-79). Data of a case study can be collected from many sources. Interviews and observation
are discussed more deeply in the following subchapter. In addition to those two, documentation,
archival records, and physical artifacts can be the data source for a case study. The sources de-
pend on the needs of an individual case study, and the methods used should always be considered
carefully beforehand (Yin 2009, 99-105; Silverman 2013, 148-152). There are three principles
when collecting data for a case study, and these are: Evidence should be gathered from multiple
sources, a database for a case study should be created, and a chain of evidence should be main-
tained (Yin, 2009, pp. 114-122).
 13

When moving to an analyzing phase, a strategy should be created. Actual analysis can be executed
following five different techniques, and these are: pattern matching, explanation building, time-
series analysis, logic models, and cross-case synthesis. Analysis has to be done thoroughly as possi-
ble, and it should show that as much evidence has been used as available, and the results should
leave no loose ends. Analysis should also show the most important aspects of that individual case
study. When performing a case study, previously gained expertise and knowledge should be used
(Yin, 2009, pp. 136-161).

The final phase of a case study is reporting results, and the preferred audience should be consid-
ered when choosing the report formats. With most research reports, only considering the main
audience group is applicable, since presenting some results, for example, presenting laboratory
experiment to non-specialists, is not relevant, and therefore the primary audience is the most im-
portant when choosing report format. Reporting is also dependent on the structure and qualities
of the case study; for example, single-case and multiple-case studies are reported using different
formats. There has to be also considered if a traditional narrative is used. Instead, a series of ques-
tions and answers can be used for reporting. The last method that can be used for reporting multi-
ple-case studies is creating a cross-case analysis from all the findings in individual cases (Yin, 2009,
pp. 168-172; Silverman, 2013, p. 378).

2.3 Interviews

There are a few different forms of interview: a personal face-to-face themed interview, an expert
interview, or a group interview, or it can be executed via phone or Teams. Interviews can be un-
structured open interviews or semi-structured interviews. The structured interview is the most
formal and is usually done on the internet. The interview should be recorded so that all the gath-
ered information is available during the study. Recording can be done in many different ways, for
example, by filling in a form, taking notes, recording, or videoing (Silverman, 2017, pp. 44-45 and
pp. 199-205).
 14

2.4 Observation

Observation techniques can be structured or unstructured. When the researcher observes, it is es-
sential to distinguish his observations from how interviewees describe or tell about their observa-
tions. Observation can be done from the inside or outside perspective. From the inside perspec-
tive, observation can be participatory, where the researcher is part of the observed situation and
community. Like interviews, observations can be recorded in many ways, for example, by taking
notes, photographing, recording, or videoing (Silverman, 2013, pp. 44-45 and pp. 199-205).

2.5 The actual form of the study

This study is closest to the case study since there has been raised a question in the company’s
management committee about how the quotation process could and should be developed. Using
the Case Study method, this thesis aims to produce answers to those qualitative questions. This
study aims to enhance the quotation process at ISA Nordic as defined in the research questions.

The research is based on interviews and observations in the company. Since this study is executed
for a company operating in different countries and the time frame to finish this study is relatively
short, interviews will be executed in semi-structured form and personally via Teams or telephone.
There are planned to be both individual interviews and group interviews. Group interviews were
chosen so that possible brainstorming could occur and people could interact with each other’s in a
live situation, and ideas could be developed further by using the synergy between people. Group
interviews were also seen as the fastest and most effective way of gathering information from all
parties in the company. Part of the interview questions was defined before the first round of inter-
views. After the first round was executed, more detailed questions were defined for the final
group interview.

2.6 Ethics of this study

Interviews are recorded so that all the data can be gathered and analyzed. Regarding the ethics of
this study, no names or any other personal data of interviewed persons will be published so that
interviews will be anonymous. Also, the calculations in this study are based on theoretical num-
bers, and no confidential information is included. Silverman (2013, p. 161) states the importance
 15

of using ethical approval when for example, human participants are the focus of the study. Inter-
views in this study are not related to personal attributes but are work-related and how people ex-
ecute their work and see the best way of performing work tasks. So personal ethical point of view
does not exist here.

3 Business strategy

This part of the theory discusses business strategies. First, it is explored what business strategy is,
and the importance of goals and having a strategy are covered. Here it is also explored how strat-
egy is created and what points must be considered. Implementation of the strategy is also ex-
plored here.

“Business strategy is a clear set of plans, actions, and goals that outlines how a business will com-
pete in a particular market, or markets, with a product or number of products or services” (IMD
2022).

“Strategy is the theory of the firm on how to compete successfully. It also considers performance as
a factor influenced by strategy, as it can be considered that to compete successfully means having
a satisfactory performance” (Barney 2001, 643-650).

First of all, the idea of any successful company is to make profit or some other added value to
shareholders. Many topics are on the top management agenda (see Figure 2). Business strategy is
one of the critical elements of success in the company. Business strategy is not a stagnant element
once created and goes on forever without input. Now more than ever, the world and business are
changing more rapidly than ever in the past. When the company is creating a business strategy,
many factors have to be considered when planning strategy. According to IMD (2022), those fac-
tors are:

 how the market is working

 what competitors are and what they are doing

 how is the business environment like

 what are the strengths and weaknesses of the company, and what is the structure of the company
 16

Figure 2. What's on top managements agenda (Logistiikka lehti nr 4. 2013; Slone & Al. 2007)

The strategy must be flexible, adaptable, and steadily anchored in up-to-date research in a chang-
ing world. When creating a business strategy, the company needs multiple skills, like business
analyses and strategic planning, and a good understanding of functions, like marketing, distribu-
tion, and sales (IMD 2022; Verbeke, 2013, chapter 1).

3.1 Goals and importance of the strategy

If one does not know his goals, how does he know that he has succeeded? Brian Tracy (2015,
chapter 1) was astonished to find out that less than 3 percent of businesses and industries have
clear, specific, and written goals that are time-bounded. Tracy clearly states: “What I discovered
was that most companies have no strategic plan at all. What they have is a budget.” (Tracy 2015,
Chapter 1). “Ideally, every decision made should relate to the ultimate goals of the organization”
(Johnson, 2020, chapter 1).
 17

One of the principles considered in business and life overall is the Pareto Principle, also known as
the 80/20 rule (Amoroso, 1938). Like Tracy states, 20 percent of businesses earn 80 percent or
more of the profits in all industries. Why is that? Because they do have a real strategy. Those com-
panies have allocated enough time and effort to do the needed strategy work. Those companies
have also implemented the fundamental principles for creating a strategy. Tracy points out the im-
portance of having clear visions for business: “Your ability to think clearly about who you are, what
you want, and how to create a wonderful future for your business is more important than anything
else you can do” (Tracy, 2015, chapter 1).

Tracy (2015) continues by explaining the fundamental principles. The number one rule is to be
clear about the company’s goals. If the company wants to achieve victories, goals and objectives
must be clear on all business levels. According to broad research, the best practice is to have clear
objectives for the whole company and every individual. That will be most effective, efficient, and
profitable (Tracy, 2015, chapter 2).

One of the critical elements is the principle of mass, meaning that in business, one has to become
excellent in one product niche. A company has to be excellent at service and master it before en-
tering into other areas of the business. Competitive advantage comes next on the list. In business,
it means finding a better, cheaper, and more working way through innovation and creativity.
Maintaining this means being flexible and sometimes stepping back and questioning the status
Quo (Tracy, 2015, chapter 2).

Concerted action means in the business that employees have good morale and are thinking us or
we in the company instead of me or that is not my job. Repeating the same thing year after year
does not necessarily lead to victory in the long run. The principle of surprise means finding new
and better ways to serve customers and markets and, in other words, finding competitive ad-
vantage with services, products, or marketing strategies. In conclusion, Tracy (2015, chapter 2)
points out the unique characteristics of the nowadays business environment: “We are living in an
age of the most dramatic change in all of history. What worked very well for some companies for a
long time does not work at all today” (Tracy, 2015, chapter 2).
 18

3.2 Creation of the strategy

Ellis and Williams (1995, p. 20) define the following: “Competitive strategy is the ability to outper-
form rivals consistently over a specified time frame on commonly accepted performance criteria”.
In his book, Johnson (2020, chapter 4) states how a successful strategy can be created. The logical
approach could be a vantage point to see how other successful companies have succeeded. Lean-
ing on other company strategies is the case in theory, which is essential to note. Neither earlier
success guarantees success in the future. If some components change in the business environ-
ment, the earlier strategy or parts of it can become obsolete.

Tracy (2015, chapter 2) has redeveloped the original idea of Freedman & Tregoe (2003) and intro-
duces a five-phase strategic formulation and implementation program that one needs to complete
to create a strategy. The company's management executes analysis in the first phase, finds the
right questions, and looks for answers. The tricky part is finding the correct answers because more
data is available worldwide than ever. The most valuable data would be one helping company
management figure out trends and assumptions. Then one has to look inside the company. What
are or have been good-selling products, well-successful customers, or markets? Which strategies
have worked and which have failed? These create the foundation for the formulation of the strat-
egy.

The second phase is the formulation, in other words, choosing the strategy to follow. It has to be
aligned with a reasonable time frame, considering possible future market changes. The strategy
must also be based on the organization’s values and beliefs. The driving force comes from the
products and services aligned with the targeted markets.

The third phase is based on creating financial targets for the strategy. What is expected as ROI (re-
turn on investments), profits, or revenues? The third phase is strategy master project planning,
which includes choosing potential key projects by creating a list, analyzing, and then prioritizing
every potential project (Tracy, 2015, chapter 2).
 19

3.3 Implementation of the strategy

The fourth phase on Tracy’s (2015, chapter 2) list is strategic implementation, which is the hard
part and harsh reality. There have to be considered many areas: that company culture and strat-
egy are aligned, are values and beliefs aligned with decisions made about products and finance?
Communicating the strategy to all personnel is a critical factor that has to be performed thor-
oughly.

According to Ellis & Williams (1995, p. 28), the successful implementation of the business strategy
means the company has to have a functional working strategy. That includes, for example, areas:
HR, finance, logistics, operations, and marketing. Overall, business strategy is not functional if the
company is not putting it into action on a practical level.

The best possible plans do not secure the company's success if adjustments are not executed regu-
larly. The majority of these changes are minor but have to be executed. Some of these changes oc-
cur daily when elements or criteria change along the way. Constant business performance reviews
are necessary to follow up on how the strategy works in real life (Ellis & Williams, 1995, p. 30).

The last phase on Tracy’s (2015, chapter 2) list has a similar meaning to the findings of Ellis & Wil-
liams (1995, p. 31). Phase five is to follow up and perform changes when needed; practically, it
means executing all the time, monitoring, reviewing, and then updating the company’s strategy
based on these findings.

There is a difference between plans and strategy. A plan is a tool for strategic management. Fur-
thermore, like any other tool, this can be used wrong or right. To keep strategy alive and floating,
continual follow-up and making the necessary changes are critical to that process. “Good strategy
is continually updated and thus requires learning” (Johnson, 2020, chapter 1).

Strategy is not only a tool of top management of the company. They often define it, but the actual
input and strategy usage are done on all organizational levels. Corporate strategy concerns the
whole company, but many other strategies are defined and used in smaller units (see Figure 3).
For example, much strategic decision-making is done on the business or strategic business unit
level (Campbell & et al., 2003, chapter 1).
 20

Figure 3. Levels of strategy (Shutterstock)

3.4 Summary of business strategies

Based on the literature review done on this thesis, it became clear that some principles are not
changing but are more fixed and stable. Brian Tracy (2015) refers to the strategy that Alexander
the Great used against the mighty army of Persia; that strategy is older than two millennia and is
still valid with all the principles. Tracy’s (2015) book applies many of the same principles, for exam-
ple, as the books of Campbell & al. (2003) and Ellis & Williams (1995). Ellis & Williams have more
international focus and more depth than Tracy because Ellis & Williams do focus more widely on
different variations in business strategies.

Verbeke (2013, chapter 1) has come to the same conclusion “I think that most of the international
business strategy can be captured by just a few simple concepts. Differences among authors are
usually just variations on these central themes” Verbeke (2013, chapter 1).

All the sources underline the importance of goals in the business. It is essential to know where the
company is going and what market it is operating in. If the company operates on a narrow product
 21

market on the domestic level or a more comprehensive array of products in international markets,
there are differences in strategies (Ellis & Williams, 1995).

The strategy itself does not help much if it is not used the right way or if it is, for example, a once-
a-year executed process. It is more question of how the company is using the strategy. The mes-
sages that mainly all the sources emphasize include flexibility, will to change, learn, and adapt to a
new situation. A strategy is an active tool that has to be used regularly, preferably daily.

“Strategic thinking and strategic management are the most important activities undertaken by any
business or public sector organization. How skillfully these activities are carried out will determine
the eventual long-term success or failure of the organization” Campbell & et al., (2003). This sen-
tence summarizes well the importance of having a good business strategy and using it skillfully.

4 Leadership and Organization

In this section, the study does focus on how leadership is one of the critical elements of the busi-
ness's success. It is explained briefly what kinds of leadership strategies there are in theory and
real business environments. Another part of this section does focus on organizations. All the larger
companies are organizations, and it is explained how organizations work in the big picture. This
part of the study also answers what changes have happened and possibly will happen in organiza-
tions in the future. Challenges and development in organizations are also covered.

Organizations, leadership, and strategies are closely tied together when running a business. Effec-
tively leading a multinational company is complex. Why do good leaders perform beyond expecta-
tions? Are personal attributes like personality, intelligence, and good social attributes, or are self-
confidence, orientation to achievements, and emotional maturity those elements that make a
leader effective? There are no easy answers to these, and they are not applicable as general rules
governing all situations (Thompson & Li, 2010, p. 15).
 22

4.1 Leadership strategies in theory

There are theoretical approaches to leadership in literature. Thompson & Li (2010, p. 21) present
the most widely-known theories of managerial leadership in their book. According to Thompson &
Li, there are four theoretical approaches to leadership.

4.1.1 Behavioral influence strategy

Behavioral influence strategy includes task and relationship behavior. According to some studies,
they can be applied simultaneously, but others say these cannot exist simultaneously, so the per-
son applies mainly in one of these categories. Both are important and have their places where to
apply. Task behavior leads to focusing on planning work activities, clarifying roles and objectives,
and monitoring operations. The leader who does focus more on relationship behavior is support-
ing, developing, recognizing, and is thought to increase areas like: “follower’s self-confidence,
stress resistance, acceptance of the leader, and willingness to perform above expectations”
(Thompson & Li, 2010, p. 28).

4.1.2 Situational adaptation as a leadership strategy

This category is labeled the contingency approach. The category is not that straightforward, and it
is assumed that the same technique is unfavorable in all situations. There are written many sub-
categories under this theory. The main finding of this theory is that if the leader can practice situa-
tional adaptation, follower satisfaction is more significant. There are many opinions on how to
match the right leadership style to a specific situation (Thompson & Li, 2010, p. 34).

4.1.3 Power-influence strategies

This category is focused on the power abilities of the leader. There are under this category 11 in-
fluence tactics. So also this category has a multitude of strategies. The leader has to be skilled in
using the right tactic whenever necessary. Also, personal power or charisma adds influence pre-
cisely in this category. There is not enough empirical evidence to support this power-influence ap-
proach and its usefulness on a broad scale, according to Thompson & Li (2010, p. 43).
 23

4.1.4 The inspirational approach

The inspirational approach is most characterized by a charismatic leader. Confident leaders in this
category can ”generate extraordinary levels of follower motivation, admiration, respect, trust,
commitment, dedication, loyalty, and performance”. The role of the leader’s charisma and person
is the biggest in this category (Thompson & Li, 2010, p. 49).

4.2 Leadership in the real world

“Leadership is the ability to hide your panic from the others” Lao Tzu.

Figure 4. How the leader points the direction of the company (Pixabay)

Richard Branson, one of the most daring entrepreneurs of our time, has promising visions of lead-
ership since he has succeeded in many adventurous ventures. A good leader points the direction
 24

to his team (see Figure 4). Leadership is not only fancy theories in the background but also a per-
sonal growth process. Branson (2014, p. 117) states in his book that growing is part of becoming a
good leader. Even though Branson is a strong leader himself, he emphasizes that the definition of
leadership is currently becoming more and more a collective process, not just individual perfor-
mance.

According to Branson, leadership is not based on the title but on actions you do and do not do and
how you treat people. Based on his experience, those stiff organizations emphasizing titles and po-
sitions can be in problems with many aspects of leadership. This behavior can lead to hardening
the walls of departmental silos, where everyone is concentrating on their own tasks, and genuine
collaboration does not exist. This also leads to narrow-minded thinking where impulsive ideas, in-
spiration, nor real excitement are not thriving, and excellence is not reached. The walls of depart-
mental silos should be softened instead. That is done by not emphasizing corporal structure too
much but by respecting people and how they perform, according to Branson (2014, p. 119).

Management is much more about maintaining processes and systems than changing them. Strong
leader, in addition to maintaining stability, should have the ability to support people when moving
to a new uncharted, and often risky territory. Most of all, good leadership leads people to new ar-
eas where businesses can prosper and evolve (Branson, 2014, p. 121).

4.3 Organizations

“Organizations exist in uncertain, changing environments and continually confront new challenges
and problems. Managers must find solutions to these challenges and problems if organizations are
to survive, prosper and perform effectively” (Jones, 2010, p. 23). Organizations can be built in
many ways. One of the most traditional ways of building an organization is that the leader is at the
top (see Figure 5).
 25

Figure 5. The traditional way how organizations are built (Pixabay)

Organizations exist because producing goods and services is more effective and can create more
value when people work together instead of working separately. In other words, an organization is
a group of people who have common tasks and goals. People working together are more likely to
be more efficient and productive than those working alone (Jones, 2010, p. 26).

Why study organizational theory? ”This field of study opens up powerful ways of thinking” (Hatch,
1997, p. 3). Like most theories, organizational theory is not one single-mindedly accepted truth
about how organizations work and operate. There are many different kinds of organizations
worldwide, which has led to a multitude of organizational theories.

According to Mary Jo Hatch (1997, p. 15) environment has a significant effect on the organization
since it is the playground where the organization is working, and changes in the environment can
significantly affect the organization. Sub elements in the environmental aspect are as follows: cul-
ture, political, social, technology, economy, physical, and legal. “The organizational environment is
the set of forces and conditions that operate beyond an organization’s boundaries but affect its
ability to acquire and use resources to create value” (Jones, 2010, p. 24).
 26

4.3.1 Change and challenges in organizations

Organizations are not the same now as they have been in earlier years. There is, of course, all the
time progress and development when many aspects change when time changes (Hatch, 1997, p.
24). One of the most significant changes in organizational culture has been the outbreak of the
Novel Coronavirus 2019, which has affected the business models and organizations tremendously.
People have been laid off, new business models have been created, and people are working more
from home offices. Focus has been switched on many businesses from effectiveness to resilience
so that changing needs of the markets and customers are obtained (Baber & Ojala, 2021).

Manufacturing and distribution of goods worldwide have been in turmoil since the beginning of
the Coronavirus outbreak. Conditions in the markets are not as confident as they used to be in
earlier years because changing factors are happening on a much bigger scale than people and busi-
nesses have used to. For example, spare parts are unavailable as they used to be in the pre-Corona
time. Supply chains are re-constructed, or at least those aspects are rethought, which affects the
effective business procedures and availability of goods when and where they are needed. Even
though the Coronavirus outbreak would eventually disappear, that will have long-term effects on
businesses and organizations (Baber & Ojala, 2021). Decision-making can also be affected. Since
the hierarchical structure can be changed when people are not spending so much time in the same
room but are only in contact via e-communication. That can lead to more decisions being made in
headquarters, according to Baber & Ojala (2021).

4.3.2 Diversity in workplaces

Diversity is one factor that has to be taken into account in organizations in the present day. Earlier,
this was more on the agenda with multinational global companies, but this change from homoge-
nous organizations to heterogenous is not temporary; it has arrived here to stay permanently. So
we have changed to a new era in management. The problem itself is not the heterogeneity but the
inability of corporate managers to handle this (Barak, 2014, chapter 1).

Discrimination was originally a neutral word but has acquired a negative tone. It means that all
people are not treated the same way because of personal characteristics like sex, race, gender,
 27

sexual orientation, or nationality. That is one area where leaders of modern times have to be
sharp and handle this equally without discrimination (Barak, 2014, chapter 1).

4.3.3 Development in organizations

Competitive advantage can be gained when organizations increasingly realize that organizational
design, change, and redesign are the source of that. Competitive advantage comes from the com-
pany’s ability to perform better than rivals, which can be achieved when managers can create
more value from the available materials or resources. The organization's capacity to create more
value has historically risen tremendously. New and upgraded methods of producing and distrib-
uting goods and services have been successfully launched. This has, though, happened in the vast
major of organizations, so it is not the only benefit of a few chosen ones (Jones, 2010, p. 34).

“If you can’t measure it, you can’t improve it” Lord Kelvin.

Managers are usually responsible for measuring how well organizations’ resources are used and
how much value is produced to maximize these areas. Several studies have examined what CEOs
and managers think to be the most valuable areas to measure how effectively they create more
value for the organizations. Those areas are control, innovation, and efficiency. If an organization
wants to remain effective in changing, work must be done regularly to evaluate how that organiza-
tion works. Many aspects should be considered, like how the work is divided between different
people and departments and how all the resources are used, like physical, human, and financial
(Jones, 2010, pp. 37-38).

Jones calls these organizational design challenges. Vertical and horizontal levels must be chosen
for the organization to balance it. It means that people have to be divided into subunits, and their
role in the organization has to be defined. The subunits' functions also have to be defined, and
subunits are then divided together. The bigger the organization is, the more differentiation is
needed. That is irrelevant if only a few people work in the same company. However, if the com-
pany is big or growing, functions must be divided or redesigned, depending on the situation
(Jones, 2010, pp. 37-38).
 28

4.4 Summary of leadership and organization

Organizations and leadership are tightly connected. Because to exist, the organization needs lead-
ership, and to prosper in the changing world, the organization needs excellent and resilient leader-
ship. In both – leadership and organizations – there are lots of theories written during the past
decades and even centuries. All of the authors or experts are not agreeing on all theories. So there
is no single way to lead people or no right way to form an organization. Thompson states that
there are many different techniques for leading people and different tactics that can be used in
different situations. Also same leadership technic is not suitable for all kinds of leaders. So every
case is different, and one single technic is not enough to lead people the right way, Thompson & Li
(2010, p. 56) summarize.

Branson (2014) is a charismatic, strong, and ambitious leader. He is also bringing soft values to the
business world, and he cares about people, valuing talent and authenticity in people. Branson is
showing many positive and admirable abilities in managing his businesses. A good example is how
he describes creating a common eating area for all the workers, sharing this area, including him-
self.

The world has changed more rapidly after the Coronavirus outbreak started than during a long
time before that. Organizations and leadership have been forced to face new challenges, for ex-
ample, creating new business models and changing focus from effectivity to resilience to keep up
with the rapidly changing world, as Baber and Ojala (2021) state.

According to Jones (2010) development of organizations is necessary to keep up with what rival-
ries focus on. So competition is hard, and the right working tools should be used to create maxi-
mum value for employees, owners, and stakeholders. Also, when circumstances change, this cre-
ates the need to follow up and possibly redesign functions and roles in the organization. This can
summarize with the popular idiom: Never settle!
 29

5 Process management, customer perspective, offers, and pricing

The next part of the theory discusses handling different processes which can be found in compa-
nies. This part also goes through tools used for managing the processes and companies. This part
will also cover the following areas: basic ideas for pricing the products, making quotations to cus-
tomers, choosing the right customers, and how controlled growth can be achieved in business.

5.1 Business process

Even though “processes are the lifeblood of an organization” (Kumar, 2018, chapter 1), many or-
ganizations still do not have formal processes for executing processes. If the process description is
not in written mode, employees are just expected to know how to proceed with work tasks. Also,
analyzing, finding inefficiencies, and improving the process is much more complicated if the pro-
cess is not defined correctly. People often execute tasks by following the old way “in the way that
things have been always done here” (Kumar, 2018, chapter 1).

One of the most typical processes in organizations is a sales order process, also known order-to-
cash process. This is also one of the most crucial processes. Of course, depending on the company
and how the process is decided to work, it can affect it, but here is an example of how this can
work (Kumar, 2018, chapter 1).

 Order comes from the client.

 Client receives a quotation from the sales department
 Customer accepts the quotation (and pays if pre-payment is needed)
 Sales order is created and inserted into the company ERP (Enterprise Resource Planning) system
 Next follows the inventory sourcing task
 The next step is a delivery task
 After shipping the order, an invoice is sent to the customer, and payment is received (if pre-pay-
ment was not needed)

A business process can be done within one single organizational unit, or it can span company-wide
and be connected to many different departments. The idea of a business process is to gather a set
 30

of activities together, which are then providing more value to the customer (Kale 2018, chapter
2.1).

5.2 Process quality, evaluation, and measuring

What is quality in a process? According to Kale (2018, chapter 2.5), there are customer’s and en-
terprise’s perspectives regarding this. Customer expectation of service or a product has to be ful-
filled, and meeting the criteria defined by the enterprise also has to be fulfilled. The basic idea of
quality is to fulfill customer needs. The organization has to get the design right and deliver the ser-
vice or product to customers to fulfill customers' needs. Additionally, upgrading the services or
products has to be done continually to maintain a competitive advantage.

There are many techniques for how the evaluation of the process can be done. One meaningful
way of evaluating the processes is through KPI – Key Performance Indicators in this context: time,
cost, quality, and flexibility. Evaluation is not the easiest task since these indicators can conflict.
For example, improving quality or cutting down the lead time can incur a higher cost, creating con-
nections between these factors. For example, time can be measured in various ways, like flow
time (through the process), process throughput rate per resource, or average delay, and this all
can be combined into total service time (Kumar, 2018, chapter 6).

A process measurement system focuses on one business process instead of the entire company or
a more comprehensive range of activities. To do the measurement, the company has to capture
quantitative and qualitative information about the process. Process measurement can be done
through the periodic or continuous measuring of the process. Performance indicators must be de-
fined and continuously monitored to improve the process performance. “As a part of business pro-
cess management, process controlling related to measurement, analysis, and improvement of pro-
cesses represents a loop that coordinates the execution of processes” (Kale, 2018, chapter 2.6).

5.3 ERP systems

“One can think of an ERP system as the nervous system of an organization. It is a vast information
system that manages information about a company’s products, customers, suppliers, employees,
 31

production facilities, financial balances, etc. It is used by every department in an organization and
by most employees” (Kumar, 2018, chapter 1).

The ERP system comprises multimodule application software packages, where the company’s pro-
cesses are gathered together and managed (see Figure 6). “These large, automated cross-func-
tional systems were designed to bring about improved operational efficiency and effectiveness
through integrating, streamlining, and improving fundamental back-office business processes”
(Kale, 2018, chapter 1).

Figure 6. Systems of the company are gathered in ERP (Shutterstock)

Functions usually put in an ERP system are accounting, manufacturing, human resource manage-
ment, purchasing, inventory management, inbound and outbound logistics, marketing, and financ-
ing. According to Kumar (2018, chapter 1), there are many viewpoints on how using ERP can give
many advantages. Firstly, when all the functions are gathered into ERP, processes can be managed
easier, and there is more transparency in the organization since information is exchanged better.
Secondly, tracking many processes can be done in real-time, like the level of the inventory, sales,
 32

purchases, and production orders. The third point is getting the whole process connected to ac-
counting, working smoothly in ERP. The fourth point is effectivity across the company's whole sup-
ply chain by helping to shorten production lead and delivery times. The last one of Kumar’s points
is that ERP helps marketing get more accurate forecasts, reducing inventory levels and leading to
higher profits for the company. Overall, an ERP system can lead to better accuracy, enhanced com-
munication, productivity, and efficiency (Kumar, 2018, chapter 1; Kale, 2018, chapter 1).

5.4 The importance of the ERP system

The history of ERP has a few steps. First, MRP was invented, and eventually, it evolved to MRP II
when more functions and parts were needed to integrate into the same system. This itself was not
enough. At the same time, when the development of computers ran forward, the development of
companies made them even more complex entities. The need to integrate more business pro-
cesses into the system rose significantly. Logistics, procurement, and financial accounting already
had sound automated software systems, but they were not integrated into other functions in the
company; they were more like separate entities. The lack of communication between divisions
was slow and ineffective. The main focus of ERP is to combine and synchronize isolated business
processes into streamlined business processes (Kale, 2018, chapter 1.4).

One of the most valuable functions of an ERP system is to combine the whole company and all di-
visions under one system. ERP allows data to be entered only once into the system; after that, all
the divisions in the company have access to it. Having all the data under one system has numerous
benefits, including better visibility of business processes, providing more data to the management
team for analyzing and managerial purposes, and the ease of all the data being behind one user
interface. The success behind ERP is the reusability of the data. When purchasing an ERP system
for the company, all the code does not have to be written again, which is significant time and
money-saving. When customers purchase an ERP system, they can choose the functions they want
in their system and get an affordable price for that (Kale, 2018, chapter 1.4.2).

5.5 Tendering, offers, and quotation

Offering a company’s services to potential buyers has different definitions. They are explained
here.
 33

 Offer is a conditional proposal made by a buyer or seller to buy or sell an asset, which becomes le-
gally binding if accepted.
 Pitching in business refers to presenting business ideas to another party.
 A quotation is a document a seller provides to a buyer to offer goods or services at a stated price
under specified conditions. They are also known as quotes or sales quotes.
 Tendering in business is a formal process where a business is invited to bid for contracts.

Quotations are typically requested of a customer who wants to know the price of goods or ser-
vices before they make a purchase. Quotations are usually sent to several service providers so
buyers can compare quotes to choose the most attractive one. Price is, of course, not the only de-
fining element; the level of quality, extra service provided, local know-how, or other factors can
give a competitive advantage to a particular service provider. Tenders can be project-based, or
they can be tied to a specific validity period. Tenders are released either from private or public or-
ganizations. Then the supplier company gives a tender response, and the buyer selects the poten-
tial supplier (Fuller & Nightingale, 2022, chapter 7).

5.6 Pricing

Price significantly impacts the buyer's decision-making regardless of the method used to make an
offer. Delivery, quality, and service are all part of the pricing and are tightly connected together
(see Figure 7). “Price and value are the two sides of the same coin”. Market pricing is one of the
pricing approaches regarding Fuller & Nightingale (2022, chapter 7). This pricing approach is effi-
cient when work is directly comparable. Market pricing is not applicable to complex projects but
only to straightforward services.
 34

Figure 7. All the parts are tightly linked to each other (Pixabay)

Basic pricing steps. The most important and critical step is the first one – gathering as much infor-
mation as possible. Also, many professionals find this step the most challenging one. The ability to
differentiate the work that will be delivered following the customer's requirements can give a
competitive advantage to win the pitch. The second step is clearly defining what will be offered
and what is not included. This is also critical since the customer usually expects that the price
quoted includes all defined elements from the customer side. The next step is to create an internal
cost estimate, which is the base for the price offered to the customer. The next question to answer
is how much the fee will be, which is set on top of the cost estimate. At this point, it is relevant to
know if some competitor is offering the service at a significantly lower price. However, here too is
to be noted that price is not the only factor. Better know-how, quality, or other factors can have a
more significant impact than price alone. The fifth step is proposing or negotiating the fee with the
customer. This is a critical factor and can lead to weakening or strengthening the relationship be-
tween buyer and supplier. The last of six steps is being able to say no if the price or some other
factors are unacceptable (Fuller & Nightingale, 2022, chapter 7; Nagle & Müller, 2017, chapter 1).
 35

5.7 To focus on the right customers

“All companies claim that their strategies are customer driven. But the term “customer” is among
the most elastic in management theory” (Simons, 2014). Simons presents a truly customer-driven
framework, which can help build a winning business model. The first is to identify the primary cus-
tomer. Surprisingly the most important customers are not the ones bringing the most significant
revenue to the company but those who can unlock the most value for the business. The second
step is to understand what are the primary customer values. In the same market, different cus-
tomers can value different aspects, like the lowest possible price, dedicated service relationship,
or best available technology. The third step is to allocate resources to win. In other words, focusing
on providing what the customer wants, for example, low price by performing different actions,
best available technology by organizing resources from global units, local value creation by offer-
ing products close to the customer, or excellent service or expert knowledge. The last step is to
make the control process interactive, meaning that times will change and business will not be the
same in the future with some undefined time range. So being interactive makes it possible to
make needed changes and answer the challenges that will arise in the future. (Simons, 2014).

Most of the companies in markets are using the traditional product-centricity approach. Fader
(2016, chapter 1) introduces an exciting model that differs from the mainstream, changing the fo-
cus to customer-centricity. “The way I see things – and the way I want you to start seeing things –
is that not all customers are created equal. Not all customers deserve your company’s best efforts.
And despite what that the tired old adage says, the customer is most definitely not always right”.
Fader continues by stating that customer centricity is identifying who are the most valuable cus-
tomers for the company and when the company focuses on them as much as possible and also
finding more customers like them. Adopting customer-centricity as the company’s business model
requires many significant changes (organizational, structural, strategic, and cultural) in the com-
pany and a willingness to abandon many old ideas. However, according to Fader (2016, chapter 2),
this has a significant potential to bring lucrative profits in the future.

After finding the right customers, the idea is to find more information about them, what they want
and need, and their future demands. After that, the company looks for more customers sharing
the same characteristics. The next phase is to change the structure of the whole corporation, to
 36

service this customer group as well as possible. This change brings along the following challenge:
the short-term financial challenge. When partly abandoning low-value-creating customers, it will
create a lack of income short term. Regarding all the challenges and significant changes, Fader
(2016, chapter 2) states that this is worth the effort and investment to bring more money in the
future. Despite the numerous positive sides of focusing on the best customers, Fader is not sug-
gesting to dump all the other customers since they bring a large amount of revenue and profit to
the company (Fader, 2016, chapter 2; Nagle & Müller, 2017, chapter 4).

5.8 Growth

Growth is the last sub-theory theme in this study. Growth is both wanted and needed in markets
to survive in sometimes harsh environments with competitive markets. What growth is in the or-
ganizations? It can mean more extensive sales, focusing on new areas without change in the com-
pany size, or leaving old ways of work behind and renewing the company or all of these. “There is
only one alternative to growth. It is stagnation. So, in the long run, if you are not growing, you will
wither away. Growth energizes. Growth liberates. Growth creates opportunities” (Thakor, 2011,
chapter 1).

Thakor (2011, chapter 1) states good and bad growth. “Good growth is growth that involves rates
of return exceeding the cost of capital. This leads to value creation. Bad growth involves rates of
return that fall below the cost of capital. This leads to value destruction”. The focus is supposed to
be kept on good growth. According to Thakor (2011, chapter 1), companies delivering good
growth are growing revenues at a healthy clip, and earnings per share are at an excellent level.

Good growth is not easy since it simultaneously demands opposite directions from the company.
High growth requires change and risk acceptance. If the company wants to pay shareholder re-
turns above the cost of the capital, it requires stability and discipline and avoiding too significant
risks; on the other hand, these approaches are not always compatible with high growth (Thakor,
2011, chapter 1).
 37

Good growth is not based only on one single working technic. There are numerous ways how com-
panies can be prosperous. Different companies have success in growth but use different strate-
gies. Thakor (2011, chapter 2) states four growth strategies: collaborate, create, control, and com-
pete. They all have their strengths and weaknesses. What does that mean to a company? One has
to choose which strategy they focus on because when trying to do everything, nothing is really
achieved. Choosing the strategy is especially important since different growth strategies pull the
company in different directions (Thakor, 2011, chapter 2; Nagle & Müller, 2017, chapter 1).

5.9 Summary of process management, customer perspective, offers, and pricing

In this part, many theory sections were covered related to business processes, process manage-
ment, the importance of ERP, pricing and giving offers or quotations to customers, choosing the
right customers, and how good growth can be created.

Business processes are essential to organizations. All referenced authors agree upon that. Still,
many organizations do not have them, or they are old-fashioned or not in written mode. Kale
(2018) and Kumar (2018) emphasize the importance of written and evaluated processes. There
has to be quality in processes. It is not enough if the process just exists. An essential part of many
companies' software systems is ERP, which can be described as the nervous system of an organiza-
tion. ERP is used for gathering all the company's information in one place, which leads to numer-
ous benefits, and both Kale and Kumar strongly support using ERP.

Quotation or giving offers to customers is part of daily business. There are different approaches to
this, starting from using one time quote for a single task or shipment and ending up giving prices
for services for the coming years in the form of a tender. Pricing can be tricky, and many aspects
must be considered before pricing or quotation is at the right level regarding customer demands
and profitability in business. Fuller & Nightingale (2022) present four basic pricing steps, which
open the pricing process.

When it comes to serving customers, Simons (2014) describes a more conservative and traditional
approach where all the customers are equal and on the same line. Fader (2016) is instead intro-
ducing a more provoking approach to this theme: customer centricity, where the company does
 38

focus on good customers who are bringing most value to the company. This brings more chal-
lenges to the companies, but according to Fader, this can open the door to lucrative opportunities.

Thakor (2011) emphasizes the importance of growth in companies. He states that without continu-
ous growth, companies are stagnant, will not evolve, and eventually fade out since markets are
changing all the time, and it is not in sight that the speed of the change will decrease.

6 Implementation of the research

If a researcher is too familiar with the topic, it can be challenging to do the research from an out-
side perspective and see processes and details as an outsider. So it could be defined as a vantage
point that I had been working in the company for only half a year before this study was started.
There is an excellent possibility to see processes as an outsider since all the processes are not yet
familiar to me. It is also easier to question the status quo when one is not too deep in the system
yet. When a researcher works in a company, some areas and processes are more accessible since
basic knowledge of the company is already acquired and the basic working methods have already
been internalized.

When implementing this research, the first step was to create an overall picture of how processes
are managed in the company in the present day. Two main research methods used in this study
are observation and interviews. According to Silverman (2017, pp. 44-45 and pp. 199-205), see
also chapters 2.3 and 2.4 in this study, there are few ways to do the observations and interviews.
The observation was first initiated by observing my work and how processes are working from my
viewpoint. The next step was expanding the observation to cover the Oslo office. The step after
that was to include observation in the headquarters. Different business areas and processes were
observed to get as complete an overall picture as possible. Other company locations have not
been part of the observation process because lack of resources allocated to this study.

6.1 Initial interviews. Mapping of the situation on starting point.

In addition to observations, the initial phase included interviews with people who do know most of
the quotation process situation at the present day in the company. Another target was the pre-
 39

mapping of the company's needs, what kind of quoting is done, and what elements and facts are
connected to the quoting. There were selected people from every country as interviewees, both
country managers and people with knowledge of the quoting area. Every office leader was not
interviewed, but the selection was based on knowledge and position. In addition, the necessary
persons from the management team were selected as interviewees. The target of the first
interview round was to do the mapping of all the elements related to quoting. The target was not
to find final answers and ready solutions.

When people get excited, progress is quickly going too fast, and it is easy and attractive to skip the
steps that are feeling too monotonous, or they do not feel like prospecting ones. When executing
research, the foundation has to be well laid. Therefore the interviewer needs to keep the situation
under control. It can be easier if the interview is semi-structured. It means that there has been
some preparatory work before the interview, and the target of the interview is well-defined.

In the first interview round, it was targeted to get partial answers to two first research questions.
1. How is the quotation process functioning and managed now?
2. Does the quotation process follow and support the company strategy?
The target was not to get answers for the third research question because those answers would be
gathered in the later phase. Pre-planned interview questions for the initial interviews are listed in
Appendix 1.

6.2 The findings of the initial interviews

In the first interview round, it was found that several different methods are used in the company
to create an offer or quote to customers. The cohesion between these methods is very low. It was
found that three different main methods are used in the company. They are explained more pre-
cisely in the next chapter, including both advantages and disadvantages.

6.2.1 Simple excel spreadsheet method

The simplest method is to use an excel sheet, create a template in the spreadsheet and enter the
data into the needed cells. Then that newly created quotation is copied from the excel sheet and
 40

pasted as a reply to the quote inquiry in e-mail, which the customer in demand has sent earlier.
The advantage of this method is that it is simple and easy to use and does not take long to estab-
lish that kind of offer template. If the request is simple, the work is done in minutes in excel, and
the method is relatively easy to use. In a fast-paced business world, it is sometimes practical that
processes are done in a most simple way. The Pharma business is the most likely area where this
tool can be utilized in the best possible way because the largest pharma customers already have
tariffs, and quoting pharma is relatively straightforward. None of the interviewees strongly sup-
ported pharma to be included in the quotation tool.

This simple method is a practical way of quoting for existing customers if, for example, some new
transport lane is opened or some slight deviation or change in costs occurs. Some customers re-
quest a valid tariff, which is validated, for example, one year at a time. All costs are not fixed and,
therefore, cannot be added to a tariff since the variability in costs can be significant and cannot be
predicted one year in advance. These costs are set to the tariff with the note: On request. As a re-
sult, this kind of simple cost reporting or quotation can be done using a simple excel method.

The list of disadvantages compared to advantages is longer when using this method. First of all,
the structure of the template can be questioned. Is it good and deep enough, and does it contain
all the needed parameters? How is it ensured that all the needed data is remembered to enter
every time used? Using this method does not ensure that all the wanted elements are included,
especially if an individual user creates the excel sheet. Other downsides when this method is used
are very low visibility inside the company and traceability overall, including in the same office, to-
ward the sales department, and the company management.

In conclusion, this method is mainly obsolete in the big picture and does not offer many tangible
benefits. It should be considered to be used as little as possible, and using other methods is sug-
gested. When an offer created by this method – is sent to the customer – it can be sent effectively
fast, but how the quotation looks like and what kind of image it creates for the customer is highly
questionable. This kind of plain offer does not give a professional image of the service provider
and does not strengthen the confidence between these two parties.
 41

6.2.2 Advanced excel method

In the Oslo office, a more advanced excel method has been used for longer. The excel spreadsheet
was developed many years previous to this study. It has been tailored for the sole usage of Norwe-
gian markets and is based on currencies used in Norwegian markets, NOK, EUR, and USD. The in-
put language of the excel sheet is Norwegian since it is designed to be used only in Norway. In
practice, the user inputs the needed data into the excel sheet and executes the program, and the
result is a stylish and professional-looking quotation in PDF format. This PDF has an overview of all
the needed information, including contact details from both parties – customer and service pro-
vider, all the related costs, validity period, limitations, general terms, special conditions, and liabil-
ity clause.

The advantages of this method are that all the given quotes share the same structure. This gives a
more professional image of the company to the customers and creates an image of tailored solu-
tions for individual customers. According to interviewees, credibility is increased when using a pro-
fessional-looking PDF format instead of just sharing costs in a simple format. The content when
using this kind of quotation method is significantly greater than when using a simple excel
method.

The traceability of this quoting tool is significantly greater than that of the simple excel method.
All the quotations are saved on the server and can be accessed afterward. Information and quotes
are not shared company-wide; therefore, the overall big picture is not shared with the sales de-
partment or management team. This can be counted as a significant disadvantage.

6.2.3 Excel pro method / Quotation tool

During the first round of interviews, it was found that a template for a prototype for the quotation
tool had been developed parallel to this study. Inside the ISA Nordic company are working people
with good IT skills, and a small Swedish team has already started developing a more advanced so-
lution for a quotation tool. It was also found that this was not a prototype but was already devel-
oped as a well-functioning tool and was under a test phase in the Swedish offices. Initially, the
idea of the developers had been to use this tool only in Sweden, and the whole planning of this
tool was based on that assumption. When the management level of the ISA group heard about
 42

this tool, their interest was immediately woken. It was agreed between the development team
and management level that the test phase would first occur in Sweden, and the situation would be
re-examined after a few months. The original will of the management team was that this tool
would be taken into company-wide usage after the test and development phases have been suc-
cessfully completed.

This tool's basic idea and parameters are close to those of the advanced excel method, as ex-
plained in chapter 6.2.2. Parameters are already included in the tool, and the user has to input
data, as was the case also in the advanced excel method. The tool is straightforward, and the quo-
tation tool manual has been created as part of the development work. If some addresses do not
exist in the tool, a new address – also defined as a customer – can be added to this tool. This helps
both the individual user and all of the users of this tool. Because when data has been entered
once, it is always available for other users, regardless of their location.

The output currencies used in this Quotation tool are SEK, EUR, and USD at the moment. The quo-
tation tool covers import and export sections: LCL (less than container load), FCL (full container
load), and air. The Pharma section is not covered.

The disadvantage of this kind of tool is that creating the tool is time-consuming, and many differ-
ent viewpoints must be considered. This takes both resources and time. The test phase must also
be part of the development work before the company-wide launch can be completed. The test
phase needs to be executed to avoid possible errors in the system after launching the tool for the
whole company. When a tool is primarily error-free, that also helps people to adapt and accept
the new tool as a part of every day job.

7 Results

The overall results of the initial interview round were unexpected concerning the original research
plan. The results were unexpected since there was already a potential quotation tool in the test
phase usage, and the existence of this tool was not known before the initial interview round. This
finding resulted that the structure of the original research plan became obsolete. It did not make
this study unnecessary, but the research plan had to be modified according to the findings of the
first interviews.
 43

After the first interview round, answers were analyzed, and a few other significant findings were
discovered. The second finding was that almost all interviewees agreed that the quotation tool
should be integrated partly or fully into the company ERP system. The third significant finding was
that most interviewees agreed that there should be only one quotation tool in the company. Since
there was already a very potential and promising quotation tool in usage where people had al-
ready involved their time and effort greatly, it was concluded and agreed with the management
team that the most remarkable results of this study could be gained by directing all efforts to sup-
port the development of this existing quotation tool. The first interview round focused on finding
answers to the first two research questions. The subsequent phases of the study focus on finding
answers to the third and last research question. What benefits would it provide to enhance the
quotation process, and how should it be executed?

According to the decision, the focus of the study would be to support the development of the ex-
isting quotation tool, the research plan was updated, and the next steps were defined. It was de-
cided to define the best possible quotation tool in theory and then compare these defined attrib-
utes to the attributes of the existing quotation tool. Eventually, all the needed features would be
questioned if those could and should be integrated into the quotation tool. Also, the possible inte-
gration of the quotation tool into the ERP system would be researched. The last phase before the
conclusions was agreed to be the final interview round with chosen participants from the ISA
Nordic. Pre-defined questions are listed in Appendix 2.

7.1 Quotation tool

Good and well-functioning tools at the workplace enable one to execute work tasks fast, accu-
rately, and effectively. Otherwise, a significant amount of time is used for functions that are not
producing profit or adding enough value to the company. Having good tools also helps the em-
ployer to keep existing workers in the company. On freight forwarding, one must use many differ-
ent computer tools to perform work effectively. Planning, quoting, invoicing, keeping records, and
executing are all part of everyday business for freight forwarders.

According to the first interviews, the quotation tool must be easy, fast, and accurate. If it is com-
plex to use or does not give wanted result, employees will most likely not use it. If there are errors
in the tool, that can lead to loss of profits or too high prices, and that can lead to not winning the
 44

quotations and losing money when orders are going to the other service providers. These criteria
must be evaluated when choosing attributes and functions for the tool.

7.1.1 Functions needed to be included in the quotation tool

The main areas where quoting is needed are; in sea logistics LCL (less than container load) import
& export, FCL (full container load) import & export, and air logistics import & export. In addition,
ISA Nordic is operating in the pharma field, which includes import & export; this part is not in-
cluded in the tool at the moment. So a total of six or eight different business areas must be cov-
ered, depending on whether pharma is included. There exist tariffs between ISA Nordic and many
big customers, especially in the pharma business area. These tariffs are updated on the agreed in-
terval and typically have a one-year validity time. Using tariffs is very practical for all the parties
since quotations are not needed in daily everyday business, and lots of effort is saved when tariffs
can be followed. Quoting is used when the rate is not specified in the tariff, for special operations,
to the customers without tariffs, or if tariffs are not valid.

Variable costs

All the needed input currencies (more than a hundred) are set in automatically to the quotation
tool and updated frequently. There have to be several different currencies in the tool as output
currencies. All ISA Nordic represented countries have a different currency. DKK, EUR, NOK and SEK.
In addition, USD is used widely in freight forwarding. So all these five currencies must be included
as an output currency in the tool. The currency used is based on the agreement between ISA Nor-
dic and the particular customer. Other changing parameters are also set automatically to the quo-
tation tool and updated frequently. The fuel surcharge is an important parameter that can signifi-
cantly affect the total price, as has primarily been seen in the markets in 2022, when the war in
Ukraine significantly impacted fuel prices.

Variable costs include, for example, sea freight and air freight rates. These costs can change daily
based on supply and demand in the markets. Since they are not fixed costs, they have to be manu-
ally entered into the quotation tool every time the quotation is done. This input ensures that the
 45

right price for the day is used every time. There has to be also margin included related to the cur-
rency fluctuation since there can be differences in currency exchange rates between the day of the
execution of the work and invoicing it.

Fixed costs

There are also fixed costs, determined by contracts or used generally on a daily business to every
customer. These are internal costs in ISA Nordic or costs from external partners, such as LSP (local
service provider), airline, ground handling, shipping company, or broker. Many of these costs are
fixed and not changing like variable costs are. These fixed costs can also be changed in the quota-
tion tool if needed for some reason, but usually, they are automatically entered, and users do not
have to consider them.

7.1.2 Using the quotation tool

The quotation tool includes a simple and effective manual. It has detailed instructions on how this
tool is used, and different functions are explained effectively and thoroughly. Using the quotation
tool is quite simple, as it should be. First, there has to be entered customer data into the system.
Once entered by any user or administrator, that data is available for all users. When the correct
rate is available for variable costs, the user enters them, and fixed costs are added to the quote
automatically. The system also executes all the needed calculations automatically. The user picks
up the correct currency, enters the right customer, checks that everything is correct, and then
presses the Create quotation button. All the function buttons are shown in Figure 8.

The system automatically creates a PDF file containing all the needed information with a stylish
and professional outlook, strengthening the company's joint appearance. If some entered data is
wrong or some cost is changed afterward, the quotation can be updated by using the Update
quotation button. Later, when the customer accepts or declines the quotation, the Accept
quotation or Decline quotation button can be pressed. The system saves the result of the
quotation to the server after the user has chosen one of these options.

The system saves all the quotations that are ever created with the tool. This data saving is an ex-
cellent tool for individual users and other parties involved. Users can search previous quotations,
 46

check the data for future use, and see statistics of total quotations created and the hit rate, which
means how big a percentage of the quotations are accepted. When the tool is used for a more ex-
tended period, statistics evolve, and the big picture can be seen more quickly, and statistics from
the quotation tool become a valuable tool for the management team, which has been one of the
main goals of this project all along.

7.1.3 Functions needed to be added to the quotation tool

At the moment, many functions or attributes are not yet included in the prototype of the quota-
tion tool. These are needed to be added there for the tool to gain maximum functionality, usabil-
ity, and effectiveness. Functions need to be added so that all the users can benefit from the tool,
regardless of which area they are working on or in which country they are located. These functions
should be added before the company-wide launch.

 Existing output currencies must be increased to include all needed currencies.

 It should be considered if the pharma section is added to the tool.

 Different settings for different countries must be included so that tool is usable for all ISA
Nordic countries. Including different fixed costs, like LSP costs, for example, trucking rates.

 Fixed cost area should be available for updating in all countries to create the most flexibil-
ity and add user-friendliness.

 One strong suggestion is to add converting tab to the excel table so that when the input is
done on the metric system, the outcome will be imperial (or the other way round). This is a
beneficial and practical function when quotations come from the USA or other countries
using imperial units. This is one of the functions that should be copied from the advanced
excel sheet used in Norway.

 Input outlook has to be defined for all countries in the tool.

 47

7.2 Integrating quotation process to ERP

Follow-up in the quotation field is challenging if different methods are used in different company
locations. Therefore one well-functioning application or tool would be most practical. The integra-
tion process has not been started or planned, but one of the purposes of this study was to deter-
mine whether it should be done and what would be the reasons for that implication.

Advantages

There are numerous benefits when the quotation tool is integrated into the company's ERP sys-
tem. All the quotes are saved on the server, and data from those are available for several different
parties, including individual users, key account managers, management team, sales organization,
IT, and accounting. Data becomes valuable when all quotes are saved into the ERP system and can
be used for many functions. When more accurate and reliable data is available, monitoring can be
done more effectively, and sales figures and other kinds of reports can be retrieved from the sys-
tem. Also, decisions can be based on hard facts, not opinions, hunches, or estimations. One of the
main benefits is that all the data is in one place, and there is a reliable system to save all the quo-
tations and information related to that area. This helps the workload of an individual user. All the
needed information and data can be found in one place.

User benefits are numerous. When the tool is in usage, an individual user does not have to con-
sider if the data is up to date because variable data – like fuel surcharge, for example – is entered
centrally. Individual users can also retrieve reports, review the customer's past behavior, and
check the hit rates in certain areas. If the tool functions optimally, data is entered into the system
only once. After approval from the customer, the quotation turns into an order, and entered data
is transferred into the ERP system. After integration, only one system is used instead of two, which
leads to the situation that only half of the time is used compared to before.

The monthly average in the ISA Nordic quotations group is over 2000. That is quite a high number,
and following the hit rates is the most promising and exciting benefit from the management point
of view. Because when accurate data is available, that can be used as a tool. If quotations are only
sent by e-mail and follow-up does not exist, improving is hard, and tracking that improvement is
 48

even more challenging, and in practice, it is impossible. When the goal is to improve the result, fol-
low-up is a crucial element. In one ISA Nordic office, the hit rate is a little bit over 10%, depending
on the area where follow-up is done.

In comparison, when using the tool, in Sweden hit rate is way over 20%. Last month when the tool
was used (December 2022), the average hit rate rose almost 2% compared to the first four meas-
ured months. Data is not acquired over a long period, so all the figures can be unreliable.

Time-saving is one of the significant benefits when using the tool. Based on five months of experi-
ence in Sweden, approximately 30% of the time per quotation is saved when using the tool. When
data is available, also advanced follow-up can be done. In one case, it was noticed that one com-
pany requested many quotations, a data check was done, and it was realized that the company
was only benchmarking ISA Nordic and buying the services from other service providers. With ac-
curate data, those kinds of companies can be spotted and eventually blacklisted, and the result is
that lots of non-profit time used are saved. By following hit rates, Swedish freight forwarders have
noticed that their local company is strong in one sub-area in air export in the Swedish market and
weak in another area. Rates were adjusted on the weak area, and the hit rate started to rise. This
phenomenon shows the real benefits of the tool in a live business environment.

Disadvantages

The list of disadvantages is significantly shorter. When creating a quotation tool, one has to have
knowledge on an operational level and IT expertise so that the result will be a well-functioning
tool. If not enough effort is invested into the creation process of the tool or the level of knowledge
is too insufficient, the result can be a tool that fails and will not be used by all the users. Then the
initially planned benefits will not be gained. When the tool is decided to be planned or taken into
usage, enough resources have to be allocated for the development work to create a well-function-
ing tool. Also, if the decision to full integration is made, there must be a decision on how much ef-
fort is allocated to the project. If all the needed elements were implied from all the countries, in-
cluding all the chancing parameters from all local suppliers, airports, and other areas, that would
make the tool very complicated. However, it would also create a very comprehensive tool.
 49

7.2.1 What does it need to perform the actual integration?

In this study, it was investigated what it takes to integrate the quotation tool fully. Full integration
would mean that all the data for quotations should be entered via the ERP system. The created
user interface has not been planned for full integration.

When fully integrated, the address book of the ERP system could be fully used. The quotation
tool's code has been written using visual basic as a coding language. The tool is based on Microsoft
Excel, and even though company ERP supports Excel, that creates a problem because the amount
of data in the ERP system is too large for Excel to be handled effectively. If the whole address book
of the ERP system were linked to the Excel tool, it would take a very long time to open the tem-
plate, estimated time to be one minute. Also, finding the right customer would become problem-
atic because the current code does not support the finding function; therefore, the whole cus-
tomer base should be scrolled through to find the right customer. The developers' original plan
was to use this tool only in Sweden. If there had been a plan for a company-wide launch from the
beginning, developers would have chosen another coding language, like Javascript, which is not
hindered by the same kind of problems as Visual basic.

Full integration would mean that the code of the quotation tool should be rewritten. Since the
code for the quotation tool has already been written outside the ERP system, full integration
would mean a significant amount of extra work when the code would have to be rewritten again
or modified to be compatible with the ERP system.

7.2.2 A separate system without integration

Another option is to develop the quotation tool further and use it as a separate program. The user
enters all the data into the quotation tool in this option. If the quotation were accepted in the
tool, data and statistics would still be available for all the parties. Therefore a user interface de-
signed specifically for this purpose can be used in the quotation tool, and the main benefits of the
tool can still be harvested and exploited. In practice, this would mean losing one of the main bene-
fits and creating extra work for users. The original benefit would have been to skip the double ef-
fort when data is entered. If the tool were integrated into the ERP systems, transferring the data
 50

within the integrated system would decrease the amount of work when data was entered only
once.

7.3 How much money can be earned by enhancing the quotation process

Follow-up for customers is essential, and when using quotation tool, that becomes more effective.
When reports can be retrieved from the statistics of the quotation tool, the management team or
sales department can easily see which customers should be prioritized and which are not that
profitable. If lots of quotations are created for a particular customer without actual orders, it is ef-
fort used without profit, and that should be avoided, or something in the quotation should be
changed if that is seen as a reasonable action. On the other hand, if the central part of quotations
leads to orders from a particular customer, then that effort used is bringing money to the com-
pany, and the work is successful.

How much money can be earned when using the tool is a theoretical question and cannot be an-
swered precisely since the tool is used only in one country, the tool has not been in use for a long
enough time, and tracking data is not yet comprehensive. Some estimates can, of course, be given.
For confidential reasons, calculations are not public but are located in appendix 3 (secret).

8 Discussion and conclusions

Sales growth can be done in multiple ways. Because markets are currently very much under com-
petition, raising prices is not available in many cases. Raising the prices could lead to a loss of or-
ders or even a loss of customers. Lowering one’s costs is another way. Growth also needs excellent
and talented people. Currently, in most countries where ISA Nordic operates, there seems to be a
lack of available, talented people. That creates a hindrance to effective and fast growth. One way
for growth is to get a better profit from the work that one does perform already. Efficiency can
and should be taken to an optimal level; therefore, tools that are used have to be optimal, and the
time used on work tasks has to be as effective as possible.

The findings of this study indicate that using only one quotation tool in the whole company will
give the most significant benefits and profits. The test phase of the quotation tool had not ended
 51

before this study was finished. Based on this study, there are recommendations on how the pro-
cess should progress in the future by enhancing the quotation process. Based on the findings in
this study and the situation regarding the development work of the tool, integrating the quotation
tool into the ERP system would benefit both the company and users. By following this recommen-
dation, the most significant profits would be gained, and the impact would be most significant on
all levels.

Validity and reliability of the study

Seven people from the management level and freight forwarders were interviewed, so it covered
100% of the reference population. Therefore results are reliable. One central point defined the di-
rection for how this study was executed. The original research plan was to search for the best quo-
tation tool. After the first interview round, the finding of existing quotation tool in the company
resulted in a significant change in planning which greatly influenced the course of the research.
After this finding, it was emphasized that the researcher must not become blinded by the change
and take the shortcut to the easiest possible solution, which looked evident to choose. Even
though the quotation tool already existed, it did not result that this study should not be executed
as it was supposed to. In reality, it created an excellent opportunity to help the company even
more by focusing all the effort on making that tool as good as possible.

The significant finding of the existing quotation tool and its results are blocking the possibility of
repeating this study on some other company the same way as it was done in the first place in ISA
Nordic because this layout most likely does not exist in other similar companies. Significant find-
ings and consequences did not hinder the reliability, as the research plan was updated, and poten-
tial pitfalls were avoided through careful planning.
 52

8.1 Discussion of research questions

The primary purpose of this thesis was to answer these predefined research questions.

1. How is the quotation process functioning and managed now?

The study's findings show that the quotation process is executed on different methods and prac-
tices in different countries and offices. There is no single agreed working procedure for giving out
quotations to customers. Follow-up of quotations is not precise, and it varies significantly between
users and offices, which means that there is no single agreed way of executing the quotation pro-
cess. When agreed practice does not occur, follow-up will not be performed systematically. The
quotation process is not managed on an ISA Nordic level; instead, every county has its own
method of managing the process.

2. Does the quotation process follow and support the company strategy?
Business is running as usual, but because the use of a single method has not been agreed upon,
follow-up does not strongly follow and support the company strategy. The question of statistical
follow-up also becomes meaningless when there is no available accurate data on hit rates on quo-
tations or the quantity of how many quotations are executed and eventually accepted. Processes
can function well in the background, and individual users might have good practices for executing
quotations. However, because there is no clearly defined follow-up system, it is hard to say
whether processes are under control. Therefore, this thesis comes to the most logical conclusion:
that the current mode of operations does not support the company strategy.

3. What benefits would it provide to enhance the quotation process, and how should it be exe-
cuted?
The first two research questions were preparatory and aimed to determine the company's overall
situation. Because there is no single effective method for implementing the quotation process, this
third research question becomes the most important, as this research area provides the most sig-
nificant potential for development. There are many benefits to streamlining the quotation pro-
cess. At the user level, the quotation tool helps with daily work. It also makes it easier to return to
the previous quotes and get an overview of previous quotations, which is significantly improving.
The benefits and effects of the enhanced quotation process at the management level rise to a
completely different level. When there is available collected data from the quotation process, it
 53

becomes feasible to manage that area. Also, making suggestions and improvements becomes pos-
sible. Therefore, enhancing the quotation process has a significant positive impact on many par-
ties.

The next part of this question is how it should be executed. There was no complete consensus in
the answers to the interviews regarding this question. Suggestions here are based on the majority
of answers to the interviews and findings in this study. According to the answers, there should be
only one well-functioning quotation tool in the whole company, though the pharma business does
not need to be included in the tool. The usage of all three existing methods is not recommended.
Advanced and pro-excel techniques are so close to each other that they should be combined into
one tool. In the pharma business, a simple excel method can also be used in the future. Using
mainly one tool ensures that all the parties stay informed and management can adequately exe-
cute their work. Since there already exists a quotation tool in a test phase, it is recommended that
this tool be developed further and taken into the usage company-wide when the development
phase has been finished. The final conclusion of this study is that when the quotation tool has
been developed to a fully functional level, fully integrated into the ERP system, and earlier sug-
gested features are implemented into the tool, the quotation process has been enhanced to an
excellent level in ISA Nordic.

8.2 Future studies

In the limitations of this study, it was agreed that defining the right price for products will not be
the focus of this study since that topic is quite broad. Future studies could well be focused on de-
fining the right price for the services that ISA Nordic is offering, and it could be very beneficial to
the company to execute that kind of study. Also, one promising area for more profound research
would be determining how competitors or partners execute their quotation process. Other com-
panies most likely use similar solutions, but new perspectives could also be discovered. Though,
that information can be classified and not easily accessible. One possible topic for future research
could be to evaluate how well that new quotation tool works in the real business environment in
ISA Nordic and whether there are even more features that could be added to the tool to increase
its efficiency and profit gained.
 54

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 57

Appendices

Appendix 1. Initial interview questions

What quoting tool are you using now and why?

What is good about that?
What is not working in that?
What functions do you want from quoting tool?
What would make a quoting tool exceed your expectations?
Would it be good if quoting tool was integrated into our company ERP?
If it was integrated, what would it need?
Do you know how many of your quotes lead to orders?
How many quotes are you doing per month?
How many quotes are done in your office per month?
How big are the margins in your quotes?
How much time is used on average for doing one quotation?
How are quotes saved?
Is there a fixed mode of executing quotes?
Do you like the outlook of the quotes sent?
Is quoting working well at the moment, in your opinion?
Is the company losing money because quoting is not working optimally?
How is quoting hit rate followed?
 58

Appendix 2. Interview questions on the second and final interview round

How much more profit can be made by using this quotation tool?
How much more quotations are done because of this tool?
How much have hit rates developed since starting the use of the quotation tool?
What obstacles exist to integrating the quotation tool into the company ERP system?
What technical issues have to be resolved
Why Pharma section should or should not be included in the quotation tool?
What are the compromises (if some) that must be accepted while launching the tool to company-
wide usage?
What are all the fixed costs that should be included in the quotation tool?
Is there something that you would like to improve or change on the outlook of the quotations that
the tool is creating?
What are the differences in quoting between different sections?
How much time does the usage of the quotation tool saves based on your experience?
What are the benefits you have noticed during the test phase?
Have the use of the tool affected to change in rates?
Have the use of the tool helped you to choose the right customers? For example, the most profita-
ble ones.
 59

Appendix 3. Benefits for the ISA Nordic (secret)

For confidential reasons, the management team of ISA Nordic wanted to make this part of the the-
sis secret, which contains this outlook of the quotation tool created PDF. Please also note that
charges are fictional and unrelated to any actual shipment, and some data is left out for confiden-
tial reasons.

Figure 8. Stylish outlook of quotation (secret)

 60

Also, ISA Nordic management wanted to leave calculations away from the public version of the
thesis. In this calculation, it is shown in theory how much money can be saved by using the tool.
The starting point for the calculations is that 2000 quotations are executed per month. According
to the interviews, the average time per quotation is around 10 minutes. Blacklisted companies are
only doing the benchmarking and can be estimated to cover 10% of the companies. When using
the tool, time-saving is estimated to be 30%. From the history records, it can be estimated that the
hit rate average has been around 15% in ISA Nordic countries. It can also be assumed that a 10%
higher hit rate could be achieved after the tool has been successfully implemented and all the
functionality is entirely harvested. This also includes target marketing and focusing on the right
customers, which bring most of the company revenue and profit. Therefore the realistic hit rate
goal is set to 25% in calculations.

For confidential reasons, real numbers related to money are not used. The theoretical shipment
value used in calculations is 100. As seen in table 2, the increase in sales is 50%, and time is used
63% from the previous 100%. In calculations, 123 hours are saved per month in the whole
company. It equals more than 70% of the monthly work hours of one employee. Theoretically
calculated, using this tool is very beneficial in both measured areas.

Table 2. Sales increased, and time saved with the quotation tool (secret)

Time used/sales increase

Without tool With tool
Quotations/month 2000 1800
Time used per quotation 10 mins 7mins
Quoted companies (10% blacklisted) 100 % 90 %
Hit-rate progress 10% 15 % 25 %
Value per shipment (theoretical number) 100 100
Time used per month (hours) 333 210
Total turnover 30000 45000

Increase in sales 50 %
Time used in compared to earlier 63 %