90% of the reality of order acquisition: High-tech in purchasing, Stone Age in sales? The digital dilemma of German companies

What defines an engineering company? From planning to innovation

An engineering firm is a company whose core business lies in the application of engineering sciences to solve technical problems. Where technical visions become reality, engineering firms are at work. They are the architects of our modern world, whose core competence extends far beyond mere construction or manufacturing. In an engineering firm, technical know-how is the most important resource: here, calculations, designs, and developments take place. But how exactly is such a company defined, what different forms does it take, and what distinguishes it from traditional crafts?

A typical example is an "engineering-oriented company," meaning an organization structured according to engineering principles and employing appropriately qualified engineers. Such companies plan, calculate, design, develop, or supervise technical systems, plants, products, or structures for their own or third-party projects.

Typical forms of engineering companies

• Traditional engineering offices or technical offices that provide planning, consulting and project management services as a service provider (e.g. civil engineering, electrical engineering, mechanical engineering).
• Engineering service providers that "lend" engineers to industrial companies on a project basis to take on development, planning or testing tasks.
• Industrial companies with a strong development and design component (e.g., mechanical engineering, automation technology, medical technology), in which engineers design and implement products, systems and automation solutions.

Differentiation from other companies

• Purely production-oriented companies without any significant in-house development or planning output are more likely to be considered manufacturing or craft businesses, not engineering companies.
• Crucially, the added value is based primarily on engineering know-how – i.e., on planning, calculation, design, development, analysis or technical advice, not primarily on manual execution or trading.

What is the core problem of the asymmetry between purchasing and sales in German engineering companies?

Over the past two decades, German engineering companies have systematically professionalized and largely automated their purchasing processes. Global sourcing, commodity group management, and the application of Total Cost of Ownership are now standard practice in established medium-sized businesses and large corporations. These companies' ERP systems map procurement processes with high precision – requisitions, orders, goods receipts, and payments are often automated down to the third decimal place. However, on the other side of the value chain, order acquisition – the systematic process of generating revenue – is often still characterized by a artisanal, manufacturing-like approach. While purchasing has become a scientific discipline, sales often still operates according to the principles of personal relationships, intuitive selling, and reactive strategies.

This asymmetry means that while German engineering companies know how to minimize their costs, optimize their suppliers, and strategically manage their procurement, they often lack a systematic understanding of how to build revenue, optimize customer acquisition, and measurably improve their sales processes. They know how much a screw costs, but not how much a sales call costs or what the conversion rate of their offers is.

Why does purchasing have an advantage in digitalization and automation?

Procurement benefits from several structural advantages. First, it has a clear, repeatable transaction logic. Procurement is a process that inevitably repeats itself: needs are identified, suppliers are sought, quotes are obtained, contracts are negotiated, orders are placed, goods are received, invoices are processed, and payments are made. This structure lends itself perfectly to standardization and automation.

Secondly, there are measurable, objective metrics in procurement: cost per unit, delivery time, quality, and availability. These metrics can be translated into key performance indicators (KPIs) that can then be mapped in ERP systems. Total Cost of Ownership (TCO) is a conceptual framework that enables procurement to make rational, data-driven decisions. A more expensive supplier who delivers flawlessly and just-in-sequence can be compared with a low-cost supplier who has quality problems or delivery delays.

Thirdly, purchasing is a cost function. Saving costs is a clear, verifiable goal. If a buyer reduces procurement costs by ten percent, this is immediately measurable and reflected in profits. This has led to investments in purchasing optimization being perceived as investments with a high ROI.

Fourth, there is a consensus on maturity levels in global procurement. Companies like Nordex, KraussMaffei, and other large machine manufacturers have consistently built and standardized their procurement organizations over the past 20 years. Best practices have been developed, supplier markets analyzed, and sourcing strategies professionalized. Procurement has been systematically elevated to a science.

Sales, however, often remained artisanal. This was because sales in mechanical and civil engineering were traditionally understood as an art, not a science. The successful salesperson was the one who could build personal relationships, who was charismatic, and who could explain their products well. Systematic, data-driven sales processes were often considered less important than the sales success of individual "star performers.".

What is global sourcing and how does it differ from systematic procurement?

Global sourcing is a procurement strategy with a worldwide focus. It means that a company not only considers local or national suppliers, but actively seeks the best sources worldwide. This involves analyzing costs, quality, reliability, and strategic risks. Global sourcing comprises several steps: market analysis to identify the potentially best suppliers worldwide, systematic supplier selection, negotiation, quality assurance, and long-term supplier development.

For German engineering companies, global sourcing often means procuring parts in low-cost markets—such as labor-intensive manufactured parts in Eastern Europe or Asia—while sourcing sophisticated, high-quality components in Germany or other highly developed markets. This is not simply about minimizing costs, but a well-thought-out strategy that considers total cost of ownership (TCO): A cheap supplier in China may have lower unit costs, but if quality issues arise, delivery delays occur, or communication problems delay product development, the overall costs will be higher.

Systematic order acquisition should be the equivalent on the sales side. It would mean that companies systematically analyze their markets, define their target customers, optimize their sales channels, standardize their sales processes, and measure their sales results. However, in many engineering companies, order acquisition is less systematic than global sourcing. While purchasing searches the globe for the best sources and systematically analyzes them, sales often waits for customers to approach them or relies on traditional customer relationships.

What is category management and why is it so successful in purchasing?

Category management is a method for structuring purchasing. Companies divide their procurement into categories—for example, steel, electrical components, hydraulics, and service—and then develop a specific strategy for each category. For strategic, high-value A-parts, the strategy might be long-term partnerships with a few select suppliers, involving close collaboration in product development. For frequently procured, non-critical C-parts, the strategy might be catalog-based ordering, where internal customers can place orders themselves, but under pre-negotiated terms.

Category management works because it recognizes that not all purchasing decisions deserve the same attention. An ABC/XYZ analysis (Kraljic matrix) helps identify strategically important parts and cultivate intensive relationships with suppliers for these, while non-critical parts are operationalized and automated. This leads to massive savings—an average of eight to 15 percent—and, above all, to strategic focus.

The equivalent on the sales side would mean that companies segment their customers and markets and develop specific sales strategies for each segment. This happens to some extent, but not systematically enough. Some large machine manufacturers have account management for strategic customers, but many small and medium-sized enterprises (SMEs) lack systematic market segmentation. They don't know which customers are strategic, which markets are the most profitable, and how their sales resources could be best deployed.

What is Total Cost of Ownership and why is it a standard in purchasing but not in sales?

Total Cost of Ownership (TCO) refers to the total cost of a product or service over its entire life cycle. This is more than just the purchase price. It includes installation, training, operation, maintenance, repairs, energy consumption, downtime, insurance, and ultimately disposal or resale. A buyer who focuses solely on price can make poor decisions. A buyer who understands TCO can know that a more expensive, high-quality supplier is more cost-effective over the product's lifetime than a cheaper supplier with frequent defects.

Total Cost of Ownership (TCO) is now standard practice in professional procurement. Companies use checklists, templates, and structured analyses to calculate TCO. This leads to long-term, strategic supplier relationships instead of short-term price negotiations.

A similar concept doesn't exist in sales. Customer lifetime value (CLV) exists, but it's applied far less systematically than total cost of ownership (TCO) in purchasing. When companies create offers, they often focus on the current selling price, not the long-term profitability of the customer relationship. They don't systematically consider the cost of acquiring a customer, the likelihood of repeat business, the costs of service and support, or opportunities for cross-selling and upselling. This information is often unstructured, not systematically collected, and not used as a basis for decision-making.

What is ERP and how does it automate purchasing down to the third decimal place?

Enterprise Resource Planning (ERP) is an integrated software system that maps all essential business processes: purchasing, warehousing, production, sales, accounting, and human resources. Purchasing benefits enormously from ERP because it is a highly structured, repetitive process.

In purchasing, a typical process unfolds as follows: A requirement is entered into the system, a purchase requisition is automatically generated, this is transmitted to suppliers (partially automatically), quotes are requested, the quotes are automatically compared, the best option is selected, a purchase order is automatically created and transmitted to the supplier, the goods receipt is recorded, the invoice is automatically reconciled with the purchase order and the goods receipt (three-way matching), and the payment is automatically released. This entire process can be highly automated.

Furthermore, modern ERP systems can perform complex optimizations. They can automatically detect when inventory levels fall below a certain threshold, automatically trigger an order, select suppliers based on predefined criteria, take discount tiers into account, and even anticipate price fluctuations. For many standard parts and raw materials, purchasing is now fully automated.

Sales in ERP systems is less automated. A typical sales process begins with a customer inquiry or lead. This is entered into the CRM system (not necessarily the same as the ERP). A salesperson is assigned, analyzes the requirements, creates a customized offer, follows up on the offer, negotiates, and closes the deal. Unlike purchasing, this process is heavily rooted in manual steps and personal decisions. ERP systems can support some of these steps—they can store data, they can generate reports—but they don't automate in the same way as in purchasing.

What is the difference between Procure-to-Pay (P2P) and Order-to-Cash (O2C)?

Procure-to-Pay (P2P) is the process on the purchasing side: from the moment a need is identified, through procurement, to payment to the supplier. Order-to-Cash (O2C) is the mirror process on the sales side: from the moment a customer places an order, through order fulfillment, to the customer's payment.

These two processes are mirror images of each other – the yang and yin of B2B commerce. For every buying action, there is a corresponding selling action. However, while P2P has been systematically automated, O2C has been less systematically optimized.

An optimized P2P process could look like this: centralized supplier database, automatic supplier selection, electronic tenders, automatic offer comparisons, automatic order creation, automatic delivery tracking, automatic invoice processing with intelligent document recognition (IDP), automatic reconciliation (three-way matching), automatic payment release, electronic payments, and automatic performance evaluation. A mature P2P process has a very short cycle time – the time from request to payment can be just a few days.

An optimized O2C process should look similar: a central customer database, systematic lead generation, automatic lead qualification, automatic quote creation (using CPQ – Configure Price Quote), automatic quote tracking, automatic order creation, automatic order processing, automatic invoicing, automatic payment tracking, and automatic customer service assignment. However, many engineering firms have only automated parts of this process. Quote creation is often still manual, quote tracking is sporadic, and payment tracking is often not systematic.

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• Modern order acquisition is no longer an isolated sales function

Why do German engineering companies lack a systematic approach to acquiring orders?

There are several structural reasons. First, sales in mechanical engineering are traditionally relationship-oriented. A successful mechanical engineering salesperson is someone who has built close relationships with customers, understands what the customer needs, and can offer technical and commercial solutions. This is a powerful approach in smaller, more complex markets, but it doesn't scale well. A salesperson can only build and maintain a limited number of relationships.

Secondly, sales in mechanical engineering are characterized by long sales cycles. A large mechanical engineering project can take two years from the initial discussion to order placement. This makes it difficult to standardize sales processes and quickly scale sales teams. A buyer can quickly improve their effectiveness through better suppliers or improved processes. A salesperson, however, has to wait over two years for results.

Third, sales in mechanical engineering are often decentralized. Large companies often have regional or product-specific sales organizations. This makes it difficult to standardize and disseminate best practices. Purchasing, on the other hand, is often centralized – there is a central purchasing department that can develop standardized processes.

Fourth, the tracking and measurement of sales results is less developed than in purchasing. In purchasing, the metrics are clear: costs, delivery time, quality. In sales, the metrics are less clear. How do you measure a salesperson's performance? Is it total revenue, profitability, or customer relationships? Different companies measure in different ways. This has led to fewer standardized best practices in sales.

Fifth, sales often has a worse reputation among executives than purchasing. Investments in purchasing optimization are seen as cost savings – they are clearly visible at the bottom of the profit and loss statement. Investments in sales optimization are perceived as “soft.” It's unclear whether better CRM implementation or improved sales process automation will actually lead to increased revenue. This has resulted in less investment in sales modernization.

What might a systematic order acquisition strategy look like?

A systematic order acquisition strategy would consist of several components. First, a clear market analysis and customer segmentation. Which markets are the most profitable? Which customer types have the longest customer lifetimes? Which markets are growth-oriented, and which are mature?

Secondly, systematic lead generation. This includes not only cold calling by salespeople, but also content marketing, account-based marketing, inbound strategies, and partnerships. Leads should not be captured sporadically, but stored in a central database with systematic follow-up.

Third, a lead qualification method. Not all leads are created equal. A lead scoring system could automatically assess which leads are most likely to convert. This would allow salespeople to focus their time on the leads with the highest conversion probability.

Fourth, a standardized quotation process. CPQ (Configure Price Quote) systems could automatically suggest configurations, calculate prices, and generate quotations based on customer requirements. This would shorten cycle times and reduce errors.

Fifth, systematic pipeline management. A CRM system should document all sales opportunities in a standardized format – including expected closure, probability, and size. This would allow managers to monitor the pipeline and make predictions.

Sixth, sales automation. Routine tasks such as email tracking, scheduling, and document distribution could be automated. This would free up salespeople to focus on higher-value activities.

Seventh, systematic performance measurement. Not just revenue, but also metrics such as lead-to-opportunity conversion rate, average deal size, cycle time, and customer lifetime. These metrics would be continuously monitored and used as a basis for improvements.

Which technologies support systematic order acquisition?

The primary system is a CRM system – Customer Relationship Management. CRM systems like Salesforce, Microsoft Dynamics 365, or SAP C4C map the entire customer lifecycle: from lead generation and opportunities to customer processing and service. Modern CRM systems for mechanical engineering must be integrated with ERP systems so that sales staff can access technical configurations and data flows seamlessly.

A second important component is marketing automation. Tools like HubSpot, Marketo, or Pardot automate lead generation and lead nurturing. They can deliver content based on customer interests, send automated emails, and score leads based on their behavior.

A third component is CPQ – Configure Price Quote. These systems automate quote generation by suggesting configurations based on customer requirements, applying complex pricing logic, and generating professional quotes.

A fourth component is business intelligence and analytics. Companies should systematically analyze their sales data – which salespeople are most successful, which markets are most profitable, what are the average sales cycles? These insights should then be used to implement improvements.

A fifth component is access to market data and leadership information. Companies like Apollo, ZoomInfo, or Hunter can help salespeople identify the right contacts at target companies and automatically update connection details.

What is the difference between marketing automation and sales automation?

Marketing automation focuses on lead generation and lead nurturing. The goal is to identify interested contacts, provide them with relevant content, build their trust, and then hand them off to sales. Marketing automation often runs automatically – emails are sent automatically based on customer behavior, and content is personalized based on customer interests.

Sales automation focuses on converting leads into deals and maximizing deal size. The goal is to make salespeople more efficient so they can spend more time on actual sales. Sales automation could mean that quotes are created automatically, appointment reminders are sent automatically, and follow-up emails are scheduled automatically.

Ideally, marketing automation and sales automation work together. Marketing generates and qualifies leads. Sales then closes the deal. The handoffs between marketing and sales should be seamless – if a lead exhibits certain behavior, it is automatically passed on to sales.

Why do German machine manufacturers have difficulties with sales automation?

There are several reasons. First, the industry is traditionally wary of excessive automation in sales. There's a perception that mechanical engineering sales is a personal service, and that too much automation will diminish that service. This is partly true—mechanical engineering customers value technical understanding and personal attention. But it's one reason why investments in sales automation are less enthusiastic.

Secondly, the IT infrastructure is often not ready. Many German machine manufacturers have legacy ERP systems and older CRM implementations. Integration between systems is difficult. A CRM system that is not integrated with the ERP is much less valuable.

Third, the right skills are lacking. Sales automation requires an understanding of data, processes, and technology. Many sales representatives lack these skills. There are also fewer established best practices and consulting resources in the area of ​​sales automation compared to purchasing optimization.

Fourth, resistance to change is significant. A new purchasing process may affect many people on the supplier side, but it is an internal decision. A new sales process means that salespeople have to change the way they work. This resistance is often greater.

How could an engineering firm overcome the asymmetry?

The first step is a clear recognition of the asymmetry and its implications. A company should understand that its purchasing is scientific, data-driven, and systematic, but its sales may be artisanal and reactive. This is a strategic problem, not just an operational one.

The second is establishing a clear sales strategy. What are the most valuable markets? Which customer types are the most profitable? How should sales resources be allocated? These questions should be answered with data, not intuitively.

The third is the investment in CRM and related systems. A proper CRM system should capture all customer interactions, enable systematic management of the sales pipeline, and provide reports.

The fourth point is the standardization of sales processes. Not all aspects of sales can or should be automated, but many can be standardized. What is a standard sales cycle? What phases does it have? What criteria must be met to move from one phase to the next?

The fifth point is the creation of accountability and KPIs. Sales should be measured against clear key performance indicators: conversion rate, average deal size, cycle time, and customer lifetime value. These should be reviewed regularly and linked to improvement targets.

The sixth point is training and development. Sales staff should develop skills in CRM systems, data analysis, and structured selling. This requires training and management support.

The seventh point is a gradual introduction of automation. Not everything at once, but a step-by-step approach – first lead generation and lead scoring, then offer management, then offer tracking, then pipeline management.

What are the expected results of a systematic procurement process?

The results can be significant. First, a reduction in cycle time. If a sales cycle is shortened from two years to 18 months due to improved processes, faster quote generation, and automated tracking, this can significantly increase revenue.

Secondly, an improvement in the conversion rate. If a company systematically measures and improves the conversion rate of leads to opportunities and of opportunities to closed deals, this can lead to massive increases in revenue.

Thirdly, better resource utilization. When routine tasks are automated, salespeople can focus on higher-value activities.

Fourth, improved predictability. A company with a mature sales pipeline documented in a CRM system can better predict its future revenues.

Fifthly, improved customer relationships. A CRM system that documents all customer interactions enables a company to better understand customer needs and provide better services.

Sixth, higher sales and profitability. If all the above factors are improved, the end result can be significantly higher sales and profitability.

Is the asymmetry between purchasing and sales a specifically German phenomenon?

It's probably not entirely specific to Germany, but it's likely more pronounced there. There are several reasons for this. First, German engineering firms have a strong tradition of operational excellence and cost management. This has led to a highly developed purchasing department – ​​a classic cost control tool.

Secondly, German mechanical engineering is traditionally oriented towards technological superiority and quality leadership. This has led companies to believe that the product sells itself, and therefore that investments in sales optimization are less urgent than investments in product development.

Thirdly, German business culture is often conservative and distrustful of excessive sales tactics. There's a feeling that real business is done on the basis of quality and reliability, not on aggressive sales or marketing tricks.

This cultural orientation is an advantage in many cases – German machine manufacturers have a worldwide reputation for quality and reliability. But it can also be an obstacle when it comes to implementing modern sales and marketing practices.

What challenges arise from this asymmetry?

This asymmetry creates several challenges. First, it results in a strategic imbalance. A company that buys very efficiently but sells inefficiently will have problems in the long run. In an environment of weak demand, as is currently the case in many parts of the mechanical engineering sector, the ability to generate revenue becomes increasingly important.

Secondly, inefficiencies arise within the organization. Purchasing can reduce costs and achieve efficiency gains, but if the sales side cannot generate revenue at the same pace, profits may remain limited.

Thirdly, a problem arises with employee satisfaction. Purchasing is perceived as important, and buyers receive recognition for cost savings. Sales is often perceived as less important, and salespeople may feel undervalued if their skills are not systematically developed.

Fourth, a problem arises with competitiveness. Companies, particularly from the USA and Asia, that have modernized their sales processes may be able to grow faster and increase their market share in markets where German machine manufacturers have traditionally been strong.

Is systematization of sales necessary?

Yes, it is not only necessary, but unavoidable. The asymmetry between purchasing and sales is unsustainable. In a world of volatile demand, intense competition, and rapidly changing customer requirements, companies can no longer rely on products selling themselves or on personal relationships being sufficient.

German engineering companies have elevated purchasing to a science. They must now professionalize selling to the same degree. This doesn't mean abandoning personal relationships – these will always be important in mechanical engineering. It means systematically building the foundation for these relationships, standardizing sales processes, measuring performance, and continuously implementing improvements.

The good news is that many of the tools and best practices already exist. CRM systems, CPQ solutions, marketing automation platforms – they're all readily available. The challenge isn't technological, but organizational and cultural. It requires a willingness to learn, to change processes, and to understand sales not just as an art form, but also as a scientific discipline.

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