Boosting Sales Productivity Through Re-Engineering the Sales Commission ProcessPresentation Transcript
Boosting Sales Productivity Through Re-Engineering the Sales Commission Process Lisa Ard Master Black Belt
Input from the Sales Commissions Reporting DMAIC project
IDDOV: Sales Plan Reengineering
Validation of Results
Ceridian: An Introduction
A global provider of human resource solutions.
Fortune 1000 company
Over 70 years experience in the service industry
Over 7,800 employees in 80 locations
HQ in U.S., UK and Canada
Provide payroll in more than 40 countries
Provide EAP services in over 100 countries
$1 billion in revenue
Publicly traded on NYSE as CEN
110,000 customers with over 20 million employees worldwide
80 Fortune 100 customers
338 Fortune 500 customers
562 Fortune 1000 customers
Multinational Payroll Solutions Ceridian Owned (4) High Volume (11) Low Volume (23) Germany France Switzerland Belgium Netherlands Poland Ireland Czech Rep. Portugal Spain Countries as at January 2006 Finland Sweden Norway Dubai, UAE Estonia Denmark Hungary Australia Hong Kong Greece South Africa Argentina Cyprus India Japan Luxembourg Philippines Singapore Turkey UK USA Morocco Italy Austria Sri Lanka Bangladesh Canada *Mexico *Bureau & Managed Services available
Sales Commissions Processing
Sales Plan Creation
Sales Plan and Commission Support
Commission calculations, processing & reporting
Sales Order Value = an estimated annual value of the order
Commission rate x SOV = Commission payout
SOV comparison to actual revenue results in a commission adjustment
Input from the Sales Commission Reporting DMAIC Project
Business Case There is high dissatisfaction with the sales commissions reporting and auditing process. Difficulty reading reports, complexity in researching issues, a lack of resources for assistance and untimely report delivery are examples of the issues. Team Objective & Deliverables Project Benefits
Outline commission report requirements based on customer needs. Deliver to FIS as requirements for Oracle 11i upgrade.
Improve employee satisfaction with reporting from 2 to 3
Reduce employee inquiries to the Commissions Team by 25%
Sales Ops Commissions Financial Information Systems Sales Account Executive
Increased sales productivity
Improved employee satisfaction
Facilitate requirements gathering for in-house commission reporting process
Critical Measures :
# of Inquiries
Process Flow Chart DMAIC: Define
Voice of the Customer
Settle on the questions to ask our customers
Initial Survey (1)
Initial Focus Group
Refine the questions and measure the broader voice of our customer
Web Survey (2)
Test root cause theory and gather input on opportunities
Final Focus Group (3)
Sales Commission Survey Results
73% are not satisfied with delivery timeliness
88% would find it acceptable or better to receive reports by the 15 th business day in the month
Sales Commission Survey Results Lack of clear inquiry process (2) DMAIC: Measure Commissions Team
Sales Commission Survey Results All Respondents (2) Importance Scoring : Must Have, Above Average , Average, Below Avg, Not Important, Do Not Use Satisfaction Scoring : Best Imaginable, Very Good/Happy, Good/Acceptable , Not Very Good/Poor, Poor/Angry DMAIC: Measure
(2) Importance Scoring : Must Have, Above Average , Average, Below Avg, Not Important, Do Not Use Satisfaction Scoring : Best Imaginable, Very Good/Happy, Good/Acceptable , Not Very Good/Poor, Poor/Angry DMAIC: Measure Sales Commission Survey Results Sales Manager Responses
Focus Group Results Reports are simple and easy to use Understand the calculations within reports I have the Information I need Reports (in order): IC Commission, Sales Detail, Sales Summary, Open Items, District Detail, FOP & Adjustments, District View Nation, VISTA (3) DMAIC: Measure
Sales Commission Survey Results Overall Satisfaction (2) DMAIC: Measure Satisfaction Scores: 5 = Best imaginable with known technology 4 = Very good / happy 3 = Good / acceptable 2 = Not very good / poor 1 = Poor / angry
Voice of the Customer DMAIC: Measure
Initial Root Cause Analysis DMAIC: Analyze Many root causes were outside of the project scope and upstream from the sales commission reporting process Snapshot of 5Whys?
IDDOV: Sales Plan Reengineering
Business Case Complexity in the sales plan is driving costs to bring commissions processing in house. Rep movement, payment timing, the number of plans are examples of the complexity in the current plan. This team will design a new sales plan and delivery method aimed at reducing complexity and the cost to deliver, while maintaining incentives to sell and retain/attract personnel and improving employee satisfaction. Team Objectives Project Benefits
A simple plan , easily understood by those receiving payment and those administering payments
A market-competitive plan , one that ensures payment accuracy and timeliness
A plan that minimizes risk to the company
One that provide incentives to sell those products determined by management
Flexibility within the plan to accommodate year-on-year changes
A plan that is cost effective to administer and provides for sales force efficiencies
Finance Sales Operations Commissions Team Financial Information Systems Human Resources Compensation
Reduce cost to administer
Improve employee satisfaction
Project is in the Verify Phase and at Project Closure
Validate Process Characterization (TV) Screens
Develop Customer Requirements thru Voice of the Customer (VOC) Grid
Validate and prioritize VOC thru discussions with customers using the Analytic Hierarchy Process matrix
Determine internal (design) requirements using the House of Quality
Develop concepts that meet design requirement targets
Optimize the concepts with a Failure Modes & Effects Analysis
Verify plan thru modeling using historical order information
Define Address complexity to meet project objectives Sales Operations
Brainstormed customer requirements and benefits using the Voice of the Customer Grid
Approached three customer groups to validate the customer requirements and understand the relative importance of those requirements
Analytic Hierarchy Process
Establish the VOC Define
Voice of the Customer 3 Main Customer Segments: Sales, Finance & Executives
Voice of the Customer Comparison Define Some shared customer needs, some competing needs
Analytic Hierarchy Process
To prioritize customer requirements within the project
Which customer segments are most important?
Which of the customer requirements are relatively more important?
AKA Full Pairwise Comparison
Generates a prioritized list of characteristics after answering the question “How important is A vs. B?” for all possible pairs of characteristics
Advantageous because the human brain finds pairs of items the easiest to rank.
This method works best for 7 ± 2 characteristics
AHP: Steps to Completion
Load the customer requirements in the rows and column headings to build a matrix
For each cell in the matrix ask:
Is this Row Characteristic (RC) more important than the Column Characteristic (CC)?
If NO place a (/) in the cell.
If YES use the following 9-point scale:
1: Characteristics are of equal importance.
3: RC is somewhat more important than the CC.
5: RC is moderately more important than the CC.
7: RC is much more important than the CC.
9: RC is extremely more important than the CC.
For each (/), enter the inverse (i.e. 1/3 if corresponding value is 3)
Normalize each column to 1
Total and Average each row
Relative importance of customer requirements for Sales Define
Take prioritized customer needs and translate into design requirements
Develop targets to ensure design requirements meet customer needs.