Streamlining the Quota Process for a World-Class Sales Organization

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Information about Streamlining the Quota Process for a World-Class Sales Organization

Published on November 20, 2007

Author: TrueConnection

Source: slideshare.net

Description

presented at TrueConnection: Sales Performance Management Conference 2007 by Jim Parker, Director of Global Commissions at Novell

Streamlining the Quota Process Jim Parker Director, Global Sales Compensation Novell, Inc.

About Novell • Global infrastructure software and services company • We help customers lower costs, manage complexity, and mitigate risk, allowing them to focus on business innovation and growth • We provide global leadership in: Enterprise-wide operating systems based on Linux and • OpenSource • Security and systems management services required to operate and i d integrate mixed-source environments id i • $1 billion annual revenue; 4,000 employees; 800 incentive-based employees in 40 countries © 2007 Novell Inc. – Proprietary & Confidential

The Widow Maker © 2007 Novell Inc. – Proprietary & Confidential

Quota management market trends • Majority of companies leverage quota-based incentives 77% h have quota-based sales i tb d l incentive plans ti l • • Use a combination of quota-setting methodologies 69% use territory potential/opportunity • • 65% use sales management projections • 60% refer to historical data • And they change them frequently 56% of organizations adjust q g j quotas during the y g year • • Changes in territories or customer base (39%) • Shifts in business, economy, or industry (33%) Source: Hewitt Associates; Market Study of 224 Large Corporations, June 2001 © 2007 Novell Inc. – Proprietary & Confidential

Common quota-setting pain points • Inefficient Lack insight to trends and historical data • Very tedious and time-consuming task for sales management and • finance Manual process with many handoffs and corrections • Inconsistent and unorganized process • Inaccurate • No standardized quota setting methodology quota-setting • Insufficient data and few analytical tools • Difficult to assess quota-setting consistency and fairness • Inflexible • Difficult to adjust to market and/or organizational changes • Difficult to get continuous performance feedback • © 2007 Novell Inc. – Proprietary & Confidential

The way it was . . . • Inefficient Manual, spreadsheet based Manual spreadsheet-based process • 60 worksheets from Board to rep • De-centralized, time-intensive, labor-intensive • 50 people involved over 4-5 months for 800 sales people in 40 countries pp pp • Multiple consolidations and manual validations • • Inflexible Lack of Management visibility to status of quota-setting process and quota • coverage Quota changes time-consuming and cumbersome, particularly in EMEA • No automated linkage between related or dependent quotas • Low sales rep confidence in validity of quota; numerous quota disputes • © 2007 Novell Inc. – Proprietary & Confidential

The way it was . . . continued Inconsistent/Inaccurate Limited f Li it d enforcement of sales strategy, coverage model, or comp tf l tt dl • plans Inconsistent application of quota-setting methodology • Significant differences in quotas for same roles and pay levels • (E/R, E/Q) Multiple, divergent sources of historical data • Calculation/clerical errors • Limited enforcement of quota transfer when accounts or territories • moved © 2007 Novell Inc. – Proprietary & Confidential

Quota-setting process and methodologies (2) Roll-down (3) Roll-across (5) Assignment, Feedback, (4) Reconciliation Adjustment, Signoff (1) ( ) Roll-up Methodologies •Role based (e/r) •Role-based •Territory/opportunity-based Territory •Roll-up (Named accounts, •Roll-down Postal codes, Industries, •Roll across •Roll-across Lines of business, etc.) © 2007 Novell Inc. – Proprietary & Confidential

Corporate planning and quota-setting Quota Coverage Assignments Compensation Plans Sales Strategy / Coverage Model Financial Plan Corporate Strategy © 2007 Novell Inc. – Proprietary & Confidential

Corporate planning and quota-setting Quota Widow makers Coverage Assignments Compensation Plans Sales Strategy / Coverage Model Financial Plan Corporate Strategy © 2007 Novell Inc. – Proprietary & Confidential

The Solution: Business Process Change + TrueQuota Standard process and methodologies, managed by a shared service organization Global quota process owner, who is part of the Global • Commissions team Centralized process (80%) with field review and fine tuning (20%) (80%), • Consistent quota-setting methodologies by role across the globe; • standard policies for changes, uplifts, discounts “Quota Handbook to provide transparency to sales managers Quota Handbook” managers, • reps, and finance Standard quotas for similar roles and pay levels • Proactive management reporting ( g p g (status, q , quota coverage, E/R) g, ) • © 2007 Novell Inc. – Proprietary & Confidential

The Solution: Business Process Change + TrueQuota TrueQuota: Rules-based system and single data source Single Si l system f all quotas, f t for ll t from corporate fi t financial plan t i l l to • individual rep quotas System enforced compliance with the coverage model, comp • plans, plans and policies Automated link between related quotas—change once, update • everywhere Management approval via electronic workflow • Quota vs. financial plan reporting; in-depth quota analysis • Online quota delivery and acknowledgement • Direct integration with TrueComp • * Features in red are not yet available in TrueQuota © 2007 Novell Inc. – Proprietary & Confidential

The Implementation • Tool/vendor selection • C llid Callidus • Lattice Engines • Synygy •RRequirements, solutioning, implementation i lii il i • 4 months start to finish • Two full-time consultants (1.5 FTEs); 1.5 Novell FTEs • Staged roll-out (Americas, EMEA, APAC) • On-time (mostly) and on-budget • Hardware and software Three servers (dev, test, prod); HP 4 processor boxes • • Oracle database; Tomcat webserver • TrueQuota (Hyperion Planning) based on number of payees © 2007 Novell Inc. – Proprietary & Confidential

The Results Americas Quota-setting Process S Suggested quotas automatically calculated f all employees td t t ti ll l l t d for ll l • based on role/plan • All adjustments captured, documented, and reported • Process time • 4 business days for first-line review, adjustment, and approval • 1 day for Americas CFO analysis and sign-off • 1 day for Americas President review and sign off sign-off • 1 day for CFO/EVP review and sign-off Quota setting for EMEA and APAC begins this week Q if d bi hi k © 2007 Novell Inc. – Proprietary & Confidential

Critical Success Factors • Management buy-in • C t li d process Centralized • Dedicated resource who understands the big picture • Up-stream processes well-defined and deadlines met • Clearly-defined, well-designed methodologies/mechanics • Solid implementation team; application experts © 2007 Novell Inc. – Proprietary & Confidential

Q&A jim.parker@novell.com © 2007 Novell Inc. – Proprietary & Confidential

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