The ROI Of Sales Performance Management


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presented at TrueConnection: Sales Performance Management Conference 2007 by Bill Price, Director of Commissions at BlueCross/BlueShield of Florida

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The ROI Of Sales Performance Management

  1. 1. The ROI of Sales Performance Management Chad Sasser Sales Compensation Blue Cross Blue Shield of Florida
  2. 2. Outline <ul><li>BCBSF's Journey </li></ul><ul><li>Business Challenges </li></ul><ul><li>Why Callidus? </li></ul><ul><li>Solution Design </li></ul><ul><li>Business Process Transformation </li></ul><ul><li>End-to-End Solution </li></ul><ul><li>Return on Investment Results to Date </li></ul>
  3. 3. BCBSF's Journey <ul><li>SUMMER 2004 </li></ul><ul><li>Mercer analysis of BCBSF sales compensation plans and benchmarking of sales operations and commissions practices vs. industry leaders. Findings include: </li></ul><ul><ul><li>17 separate system feeds for legacy systems </li></ul></ul><ul><ul><li>Manually intensive process and multiple touch points lead to errors, rework, and service & morale issues with agents and agency partners </li></ul></ul><ul><ul><li>80% of premiums generated by 8% of channel partners </li></ul></ul><ul><ul><li>Lack of system flexibility constrains program largely to % of premium </li></ul></ul><ul><li>WINTER 2004 </li></ul><ul><li>Engaged Accenture to conduct software evaluation of ICM vendors based on ability to support current BCBSF requirements and future environment </li></ul><ul><ul><li>Selected Callidus TrueComp as preferred enterprise platform </li></ul></ul><ul><li>JANUARY 2005 </li></ul><ul><li>Launched multi-phase program with Accenture to implement Callidus TrueComp </li></ul><ul><ul><li>Design, Data Integration, Test, and Implementation of TrueComp </li></ul></ul><ul><ul><li>Provide comprehensive system performance management capabilities </li></ul></ul><ul><ul><li>Provide complete business process management of commissions processing </li></ul></ul>
  4. 4. BCBSF’s Journey continued <ul><li>APRIL 2005 </li></ul><ul><li>Formal approval of program, sponsoring full business process transformation </li></ul><ul><ul><li>Design commissions BPO team as medium for repaid, reliable change adoption </li></ul></ul><ul><ul><li>Launch internal BPO discussions with key executive stakeholders </li></ul></ul><ul><li>JULY 2005 </li></ul><ul><li>Implemented Release 1.0 pilot on Callidus TrueComp </li></ul><ul><ul><li>Successful implementation of TrueComp for a subset of external channel partners </li></ul></ul><ul><li>SEPTEMBER 2005 </li></ul><ul><li>Fully Implemented Release 1.0 on Callidus TrueComp </li></ul><ul><ul><li>Successful implementation of TrueComp for all BCBSF External Group channel partners </li></ul></ul><ul><li>January 2006 </li></ul><ul><li>Implemented Release 2.0 on Callidus TrueComp </li></ul><ul><ul><li>Successful implementation of TrueComp for BCBSF’s captive group sales staff </li></ul></ul><ul><li>October 2006 </li></ul><ul><li>Implemented Release 3.0 on Callidus TrueComp </li></ul><ul><ul><li>Successful implementation of TrueComp for BCBSF’s External and Internal Individual channel partners </li></ul></ul>
  5. 5. BCBSF’s Challenges Accuracy Risk for commissions errors and overpayments Flexibility Unable to quickly adapt to changing market and corporate strategies Audit / Control Absence of monitoring, and audit capabilities
  6. 6. Why Callidus? <ul><li>BCBSF chose Callidus’ TrueComp as it’s Incentive Compensation Management solution based on the following criteria: </li></ul><ul><ul><li>Highest market penetration in the ICM space with a proven solution in the Health, Financial Services, and Insurance industries </li></ul></ul><ul><ul><li>Robust calculation capabilities; specifically with effective dating, retro-active processing, and use of business units </li></ul></ul><ul><ul><li>Click-through traceability capabilities for audit and monitoring </li></ul></ul><ul><ul><li>Demonstrated ability to process large transaction and participant volumes </li></ul></ul><ul><ul><li>Strong offering for ad-hoc reporting </li></ul></ul><ul><ul><li>Proven ability to integrate successfully with Siebel SFA </li></ul></ul>
  7. 7. Solution Design- <ul><li>The implementation of the Callidus TrueComp application improved BCBSF’s Incentive Compensation Management capabilities in multiple areas. </li></ul>
  8. 8. Solution Design – End to End Business Transformation <ul><li>Rationalized architecture to streamline compensation data, processing, and business operations across channels and markets. </li></ul><ul><li>Pre-stage processing enables data from all sources to be validated against each other to limit duplicate payments and improve overall accuracy </li></ul><ul><li>Aligning with the BCBSF distribution sales strategy, TrueComp enables the validation of a channel partner’s license & appointment, contract, and status prior to issuing payment. This validation was implemented as a systematic process based on channel partner data received from the BCBSF SFA system. </li></ul><ul><li>The retro-active processing implemented with Release 1.0 of the Callidus TrueComp solution introduced the first systematic retro-processing for incentive compensation at BCBSF. Retro-activity can now be processed based on: </li></ul><ul><ul><li>Channel Partner Changes </li></ul></ul><ul><ul><li>Channel Partner Effective Date Changes </li></ul></ul><ul><ul><li>Commission Rate Changes </li></ul></ul><ul><ul><li>Contract & Status Changes </li></ul></ul><ul><li>The front-end UI of TrueComp increases the transparency and accessibility of data and audit information and provides the business with a hands on view of commissions data, enabling them with tools and processes to manage compensation data prior to the submission of payment. </li></ul><ul><li>The various reports and queries available are providing BCBSF access to comprehensive data to enable an effective audit of commission and bonus payments. This transparency has improved the overall decision making capabilities of the compensation administrators </li></ul><ul><li>Information and Modeling capabilities have allowed BCBSF to focus on proactive vs. reactive management of new compensation programs </li></ul>
  9. 9. End-to-End Solution for ICM <ul><li>The end-to-end solution encompassed process, technology, and organizational transformation and allowed BCBSF to accelerate change in managing incentive compensation today and into the future. </li></ul><ul><li>Process </li></ul><ul><li>Channel Partner </li></ul><ul><li>Information </li></ul><ul><li>Management </li></ul><ul><li>Agent Service </li></ul><ul><li>Center </li></ul><ul><li>Streamlined Process for ICM </li></ul>Technology <ul><li>Organization </li></ul><ul><li>Business Process Operations </li></ul><ul><li>Application Management </li></ul><ul><li>Solution Delivery </li></ul>
  10. 10. Return on Investment Results to Date <ul><li>BCBSF has been able to rapidly modify programs to incentivize channel participants to drive the desired business objectives within the first year following implementation . Specifically, BCBSF wanted to grow significant market share in the small group and under 65 individual product groups. Within the first 12 months from implementation, BCBSF went from 23,000 small group contracts in 2005, to nearly 61,000 in 2006. </li></ul><ul><li>With TrueComp’s ability to model and simulate various incentive scenarios, BCBSF has developed highly targeted programs that supported an overall first year sales increase of over $312 million. Attributing about 8% of this increase to TrueComp, BCBSF booked incremental revenues of $23.4 million that it otherwise would not have closed. </li></ul><ul><li>Once TrueComp was in place, BCBSF was able to deliver timely, accurate commission processing. As a result the external sales channel not only had more confidence in commission payments, but also had additional tools for self-service making their BCBSF interface simple and easy to understand. </li></ul><ul><li>Prior to TrueComp Enterprise, the run rate of commissions to revenue was approximately 5%. Today, 2 years after TrueComp implementation for all sales channels, the commission to revenue run rate has fallen to 4%. </li></ul><ul><li>Errors (over and under payments) in commissions fell significantly due to TrueComp automated calculation and payment processes. Combined with TrueComp’s strengths in providing traceability, the increase in accuracy resulted in yearly savings of $3.6 million. Payment accuracy has increased from 80% in 2005 to nearly 99% in 2007. </li></ul>
  11. 11. Return on Investment Results to Date <ul><li>One of BCBSF’s key goals was to streamline and overhaul the entire incentive management process – from design to monitoring, payment and reporting. As a result of TrueComp’s powerful automation and efficient processes, BCBSF was able to reduce the number of FTEs in incentive management support positions by 4 people in 2006 and a total of 6 people in 2007. </li></ul><ul><li>Additionally, with BCBSF’s prior legacy system, reporting where possible, was a cumbersome endeavor. With TrueComp BCBSF staff can quickly and easily generate monthly management reports, and reports for sales, underwriting and finance. </li></ul><ul><li>The TrueComp solution offered BCBSF improved integration, process automation, and the flexibility to change incentive plans and components with limited IT assistance. The solution’s favorable impact on exception processing further reduced the need for IT involvement. Mostly notably, BCBSF was able to completely eliminate its production processing costs to the tune of $300,000 annually . A hosted solution, TrueComp reduced the burden on an already taxed IT organization. With TrueComp implementation, BCBSF was able to retire two costly legacy systems and move from 17 distinct data sources, down to two. </li></ul><ul><li>Utilizing TrueComp’s flexibly and comprehensive reporting tools, BCBSF now provides its channel partners with reports that are specific to each agency – with detail on compensation statements, classification reports, bonus reports, reward and recognition reports. </li></ul>