Boosting Sales Productivity Through Re-Engineering the Sales Commission Process
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Transcript of Boosting Sales Productivity Through Re-Engineering the Sales Commission Process
© 2006 Ceridian Corporation. All rights reserved.
Boosting Sales Productivity Through Re-Engineering the Sales Commission Process
Lisa Ard
Master Black Belt
© 2006 Ceridian Corporation. All rights reserved. 2
Agenda
• Ceridian Overview
• Project Background Commissions Processing Terminology Input from the Sales Commissions Reporting DMAIC project
• IDDOV: Sales Plan Reengineering
• Validation of Results
• Lessons Learned
• Conclusions
© 2006 Ceridian Corporation. All rights reserved.
Ceridian Overview
© 2006 Ceridian Corporation. All rights reserved. 4
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
© 2006 Ceridian Corporation. All rights reserved. 5
Our Customers
110,000 customers with over 20 million employees worldwide
80 Fortune 100 customers
338 Fortune 500 customers
562 Fortune 1000 customers
© 2006 Ceridian Corporation. All rights reserved. 6
Ceridian Solutions
© 2006 Ceridian Corporation. All rights reserved. 7
Multinational Payroll Solutions
Ceridian Owned (4) High Volume (11) Low Volume (23)
Germany
France
Switzerland
Belgium
Netherlands
PolandIreland
Czech Rep.
Portugal
Spain
Countries as at January 2006
Finland
Sweden
Norway
Dubai, UAE
Estonia
Denmark
Hungary
Australia
Hong Kong
Greece
South AfricaArgentina
Cyprus
India
Japan
Luxembourg
Philippines
Singapore
Turkey
UK
USA
Morocco
Italy
Austria
Sri Lanka
Bangladesh
Canada
*Mexico
*Bureau & Managed Services available
© 2006 Ceridian Corporation. All rights reserved.
Project Background
© 2006 Ceridian Corporation. All rights reserved. 9
Commissions Processing
• Sales Commissions Processing Within Ceridian:
Sales Plan Creation Order Entry Sales Plan and Commission Support
Outsourced: Commission calculations, processing &
reporting
© 2006 Ceridian Corporation. All rights reserved. 10
Terminology
• 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
© 2006 Ceridian Corporation. All rights reserved.
Input from the Sales Commission Reporting DMAIC Project
© 2006 Ceridian Corporation. All rights reserved. 12
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
DMAIC: Define
© 2006 Ceridian Corporation. All rights reserved. 13
© 2006 Ceridian Corporation. All rights reserved. 14
DMAIC: Define
Pete Anderson, Finance
Stakeholders:
Inputs: Suppliers: Process Name: Customers: Outputs:
Purpose:
Process Performers:
Process Owner: Systems:Oracle, Synygy, Data WarehouseShareholders
Sales registers, open item reports, ranking report, commission statementTo provide accurate documentation
on sales commissions/SOV attainment to facilitate communication, auditing, forecasting, budgeting and resource management.
IT, Business Analysts, SRA, Synygy, Commission Administration, Sales Ops
Data feeds, revenue, Synygy payment data, plan data
Oracle, Synygy, Signature, CTS,
Reporting Sales reps, Sales mng, Sales Execs, Corporate mng, Finance, HR, Corp Accounting, KPI Report Analyst, Sales Ops
Measures:
# of inquiries, employee satisfaction (report users), Cycle time (report distribution - booking), Deviation from reporting due dateSources of Variation:
Data not sent/received on time, data errors, system issues, system conversions, human error / manual interventions, multiple hands, seasonality, different levels of understanding in interpreting reports (training issue)
Critical Measures:• Employee Satisfaction• # of Inquiries• Cycle Time
Finance
© 2006 Ceridian Corporation. All rights reserved. 15
Process Flow Chart
DMAIC: Define
Sa
les
Sa
les
Ad
min
SR
AO
racl
eS
ynyg
yC
om
mis
sio
ns
Te
am
Start
Weekly audit of Detailed
Sales Results Report
Send files to Synygy
Synygy processes: Calculate commissions, transaction processing, adjustments, FOP, grow for AE, Units/monthly revenue payouts, reporting, Mbil (25% adv comm), 1st bill
Verification Reports Audit &
ResponseReports received File received
Forecast Report (FOP, Adj) received
Report received via e-mail
Stop
day 1-3 in month
Month End calculation of losses, 3rd party payouts, revenue history, revenue sweep, PS billing payout
Order Entry
Month End Processes (Participant
Maintenance, Deviation Input,
Rep on Quota, as needed
spreadsheets, etc.
goal: day 4
goal: day 5
goal: day 10
throughout Synygy processing
Run Uploads into Oracle, send
Payroll & GL files
goal: day 12goal: day 13
goal: day 13 goal: day 15
daily runs accessed in VISTA
© 2006 Ceridian Corporation. All rights reserved. 16
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)
DMAIC: Measure
© 2006 Ceridian Corporation. All rights reserved. 17
Sales Commission Survey Results
• 73% are not satisfied with delivery timeliness 88% would find it acceptable or better to receive reports by the
15th business day in the month
• 97% satisfied with e-mail delivery 30% would prefer web delivery
• 57% have never received training
(2)
DMAIC: Measure
© 2006 Ceridian Corporation. All rights reserved. 18
Sales Commission Survey Results
(1)
DMAIC: Measure
Hours spent monthly on commission reports
Avg, 5.4 Avg, 5.8 Avg, 6.3
Avg, 4.1
-
2.0
4.0
6.0
8.0
10.0
12.0
14.0
Other Sales Admin Sales Manager Sales Rep
Ho
urs
© 2006 Ceridian Corporation. All rights reserved. 19
Sales Commission Survey ResultsResources for Report Questions
27%
17%
44%
23%
48%
12%
0% 10% 20% 30% 40% 50% 60%
Sales Admin
Other Sales Rep
Sales Manager
Sales Reporting Admin (SRA/Billing Specialist)
Commissions Team (Kathy Fisher, MichelleLienemann, Beth Maus)
Other
Lack of clear inquiry process
(2)
DMAIC: Measure
Commissions Team
© 2006 Ceridian Corporation. All rights reserved. 20
Sales Commission Survey ResultsAll 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
Importance vs. Satisfaction Current Sales Commission Reports
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
ICC
om
mis
sio
n
Sale
s D
eta
il
Sale
sS
um
mary
Open I
tem
s
Importance - Must have or above average Satisfaction - Acceptable or better
© 2006 Ceridian Corporation. All rights reserved. 21(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
Importance vs. Satisfaction Ranking by Sales ManagersCurrent Sales Commission Reports
0%10%20%30%40%50%60%70%80%90%
100%
ICC
om
mis
sio
n
Sa
les
De
tail
Sa
les
Su
mm
ary
Op
en
Ite
ms
Dis
tric
tD
eta
il
Fo
reca
ste
dF
OB
Ad
just
ed
Dis
tric
t V
iew
Na
tion
VIS
TA
Importance - Must have or above average Satisfaction - Acceptable or better
Sales Commission Survey ResultsSales Manager Responses
© 2006 Ceridian Corporation. All rights reserved. 22
Focus Group ResultsBefore & After Comparison of Report Usefulness
0%10%20%30%40%50%60%70%80%90%
100%
Eas
e_IC
Com
mis
sion
Eas
e_S
D
Eas
e_S
S
Eas
e_O
I
Eas
e_D
D
Eas
e_F
OP
AD
J
Eas
e_D
VN
Eas
e_V
IST
A
Cal
c_IC
Com
mis
sion
Cal
c_S
D
Cal
c_S
S
Cal
c_O
I
Cal
c_D
D
Cal
c_F
OP
AD
J
Cal
c_D
VN
Cal
c_V
IST
A
Info
Nee
d_IC
Com
mis
sion
Info
Nee
d_S
D
Info
Nee
d_S
S
Info
Nee
d_O
I
Info
Nee
d_D
D
Info
Nee
d_F
OP
AD
J
Info
Nee
d_D
VN
Info
Nee
d_V
IST
A
% a
ns
we
rin
g Y
es
Before After
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
© 2006 Ceridian Corporation. All rights reserved. 23
54321
95% Confidence Interval for Mu
2.12.01.9
95% Confidence Interval for Median
Variable: C2
2.00000
0.78220
1.87615
Maximum3rd QuartileMedian1st QuartileMinimum
NKurtosisSkewnessVarianceStDevMean
P-Value:A-Squared:
2.00000
0.93046
2.08494
5.000002.000002.000001.000001.00000
2572.68E-040.6143780.7222760.849871.98054
0.00016.431
95% Confidence Interval for Median
95% Confidence Interval for Sigma
95% Confidence Interval for Mu
Anderson-Darling Normality Test
Descriptive Statistics
Sales Commission Survey ResultsOverall Satisfaction
Satisfaction Scores:5 = Best imaginable with known technology4 = Very good / happy3 = Good / acceptable2 = Not very good / poor1 = Poor / angry
(2)
DMAIC: Measure
© 2006 Ceridian Corporation. All rights reserved. 24
Voice of the Customer
DMAIC: Measure
Very Satisfied Customers
Fully Supplied Customer
Need
Very Dissatisfied Customers
Did Not Address
Customer Need At All
Latent Needs
Articulated Needs
Basic Expectations
KANO Model
• Pull own reports• Real-time reporting• Drill down capability• Within self service
• Info on owner of task• Description of action
• User friendly reports• Timely reports• Standard processes• Commission value shown on report
© 2006 Ceridian Corporation. All rights reserved. 25
Initial Root Cause Analysis
DMAIC: Analyze
Problem Why? Why? Why? Why?
1 Oracle reports don't match to booking paperworkBooking at product line item and Commission Reporting at attainment type Non-integrated systems
Finance need for revenue reporting at detail level vs. Sales need to see it at summary level
Finance needs to validate revenue starting, commission payout accuracy
Manual calculations of SOV
Non-integrated systems (other pricing tools vs. Oracle)
Billing input not followed up by SOV check Lack of Training
2
Reps don't understand difference between SOV eligibility and NSR eligibility (doesn't go toward accelerator) Lack of training
Sales Plan complexity Pricing complexityStrategy complexity
3 Too many line items Sales Plan complexity Pricing complexityStrategy complexity
Need ability to research by product line item Sales Plan complexity Pricing complexityStrategy complexity
4 No roll up to customer level Reports roll up to contracts, not customers
Complex process to access invoicesNon-integrated systems (billing, invoice)
Only Sales Admin have access to system
Oracle ID cost, limited # of ID
Lack of Training5 Too many codes Sales Plan complexity Pricing complexity
Strategy complexity
MBILpolicy to pay upfront and then adjust
Why is the overall satisfaction with sales commission reporting so low?
Many root causes were outside of the project scope and upstream from the sales commission reporting process
Snapshot of 5Whys?
© 2006 Ceridian Corporation. All rights reserved.
IDDOV: Sales Plan Reengineering
© 2006 Ceridian Corporation. All rights reserved. 27
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
• Improve productivity
• Reduce cost to administer
• Improve employee satisfaction
Identify
Business Case
© 2006 Ceridian Corporation. All rights reserved. 28
Project is in the Verify Phase and at Project Closure
© 2006 Ceridian Corporation. All rights reserved. 29
Project Steps1. Validate Process Characterization (TV) Screens
2. Develop Customer Requirements thru Voice of the Customer (VOC) Grid
3. Validate and prioritize VOC thru discussions with customers using the Analytic Hierarchy Process matrix
4. Determine internal (design) requirements using the House of Quality
5. Develop concepts that meet design requirement targets
6. Optimize the concepts with a Failure Modes & Effects Analysis
7. Verify plan thru modeling using historical order information
© 2006 Ceridian Corporation. All rights reserved. 30
Start: Initial Project Plan MtgEnd: Final approval of plan changes from prior year
Steven Rodriguez
Stakeholders:
Inputs: Suppliers: Process Name: Customers: Outputs:
Purpose:
Process Performers:
Process Characterization TV Screen
Systems:
Process Owner:
ShareholderEEsExternal CustomerAudit
Market DataHistorical Data/ AnalysisEE Turnover DataExecutive InputManager Survey DataProject Manager Plan
3rd Party SurveysCommission ReportsSales ReportsHR SystemExecutives (BU owners)RVPs, DVPs
Sales Plan Design Finalized Sales PlanSales Plan Revisions
Motivate productivity in sales, drive desired business results, and compensate to attract/ retain "A Players".
Sales OpsCompensation Business Unit Owners
Sales TeamSRA/ Comm AdminISExecs
Measures:
Cycle Time: Start to End; Delivery Date; Sales Business Results (compared to desired business results); Retention; Payout: Target -vs- Actual per role; EE Survey Feedback (motivation/ rates/ comprehension…); # of revisions; ROISources of Variation:
Final decision: Timing/ lateness of final budget/ quota; Org Changes; Number of plans; Plan complexity; Competitive market/ Industry competition, market conditions; Product variation; Emerging markets, acquisitions, partnerships, segmentation
Define
Address complexity to meet project objectives
Sales Operations
© 2006 Ceridian Corporation. All rights reserved. 31
• 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
• Tools VOC grid
Analytic Hierarchy Process
customer interviews
Establish the VOC
Define
© 2006 Ceridian Corporation. All rights reserved. 32
Voice of the CustomerCustomer Requirements Benefits
Direct internal Sales Team Easy to understand Sales force efficienciesOpportunity to get paid at higher rate (accelerators) Incentive to sellAbility to value a sale / measure performance Performance measureMarket competitive Rep retention
Timeliness of payments, reporting Provide incentiveMinimize risk
Accuracy of payments, reporting Minimize riskClear and timely communications about plan, implementation and backlog (transition)
Awareness
Modeling tools for commissions forecasting Understanding of financial impactSales Management Ability to handle sales promotion strategies Flexibility to provide incentives
Productivity driven Maximize revenue, minimize costMeets all business unit needs
and all sales team listed reqCommissions Team Simple to administer, research Efficiencies
No deviations EfficienciesAbility to measure (i.e. volume reporting) Performance measureAutomated and accurate accounting transactions Efficiencies, accuracyInterface to payroll Efficiencies, accuracyClear and timely communications about plan, implementation and backlog (transition)
Awareness
Sales Reporting Administration Simple, easy to understand (ease of booking) Efficiencies
FISSimple / lower complexity Ability to deliver with system,
efficienciesIntegrated Ability to deliver with system,
efficienciesClear and timely communications about plan, implementation and backlog (transition)
Awareness
Sufficient lead time (i.e. contest, plan changes) Ability to deliver with system, awareness
Execs Cost neutral Accurate forecastingSales Order Value (SOV) inform investors / revenue
forecasting
Productivity driven Maximize revenue / minimize cost, labor efficiencies
No deviations Fairness; forecasting accuracyCost effective to administer Maximize revenue / minimize costPaid on revenue Minimize risk
Customer
3 Main Customer Segments:
Sales,
Finance &
Executives
© 2006 Ceridian Corporation. All rights reserved. 33
Voice of the CustomerComparison
Define
Sales Finance / FIS XOPSEasy to understand Simple to understand, administer, research Cost neutralOpportunity to get paid at higher rate (accelerators) Ability to measure (i.e. volume reporting) Ability to measure
performance (SOV)Ability to value a sale / measure performance Automated transactions and interfaces Productivity drivenMarket competitive Clear and timely communications about plan,
implementation and backlog (transition)Cost effective to administer
Timeliness of payments, reporting Sufficient lead time (i.e. contest, plan changes) Paid on revenueAccuracy of payments, reporting Ability to control process (SOX)Clear and timely communications about plan, implementation and backlog (transition)
Accurate expense recognition
Modeling tools for commissions forecasting Ability to reconcile b/n expense & paymentAbility to handle sales promotion strategies Accurate and timely financial reports Productivity drivenMeets all business unit needs
Some shared customer needs, some competing needs
© 2006 Ceridian Corporation. All rights reserved. 34
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
© 2006 Ceridian Corporation. All rights reserved. 35
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
© 2006 Ceridian Corporation. All rights reserved. 36
Relative importance of customer requirements for Sales
Define
Instructions: Eas
y to
Und
erst
and
Acc
eler
ator
s
Mea
sure
per
form
ance
Mar
ket
com
petit
ive
Tim
elin
ess
of p
aym
ents
, re
port
ing
Acc
urac
y of
pay
men
ts,
repo
rtin
g
Cle
ar,
timel
y co
mm
unic
atio
ns
Mod
elin
g to
ols
Sal
es p
rom
otio
n st
rate
gies
Pro
duct
ivity
driv
en
mee
ts a
ll bu
sine
ss n
eeds
TO
TA
L
AV
ER
AG
E
Easy to understand 0.04 0.05 0.07 0.05 0.08 0.08 0.12 0.18 0.14 0.09 0.08 0.98 0.09 Opportunity to get paid at higher rate (accelerators) 0.19 0.07 0.10 0.12 0.12 0.16 0.11 0.19 0.20 0.09 0.10 1.45 0.13
Ability to value a sale / measure performance0.07 0.04 0.06 0.05 0.08 0.11 0.09 0.07 0.12 0.09 0.11 0.90 0.08 Market competitive 0.20 0.15 0.11 0.05 0.17 0.04 0.10 0.07 0.12 0.05 0.09 1.14 0.10 Timeliness of payments, reporting 0.15 0.22 0.21 0.18 0.08 0.15 0.11 0.10 0.05 0.25 0.17 1.67 0.15 Accuracy of payments, reporting 0.17 0.26 0.18 0.23 0.21 0.19 0.16 0.18 0.13 0.25 0.19 2.16 0.20 Clear and timely communications about plan, implementation and backlog (transition)
0.04 0.05 0.05 0.04 0.05 0.08 0.06 0.05 0.02 0.02 0.05 0.49 0.04 Modeling tools for commissions forecasting
0.02 0.01 0.01 0.02 0.05 0.04 0.04 0.03 0.02 - 0.03 0.27 0.02 Ability to handle sales promotion strategies
0.03 0.03 0.02 0.06 0.02 0.04 0.04 0.01 0.04 0.04 0.05 0.37 0.03 Productivity driven 0.08 0.10 0.16 0.17 0.10 0.08 0.13 0.09 0.09 0.09 0.10 1.18 0.11 Meets all business unit needs 0.02 0.01 0.02 0.03 0.03 0.04 0.05 0.04 0.07 0.02 0.05 0.38 0.03 TOTAL 1 1 1 1 1 1 1 1 1 1 1 11 1
© 2006 Ceridian Corporation. All rights reserved. 37
• Take prioritized customer needs and translate into design
requirements
• Develop targets to ensure design requirements meet
customer needs.
• Tools House of Quality Matrix
Design Requirements
Define
© 2006 Ceridian Corporation. All rights reserved. 38
1 W
orst
2 3 4 5 B
est
0.09 9 9 9 9 3 9 9 9 9 9 5 2 3 9 0 0 3 00.13 9 3 2 7 60.08 3 9 9 9 7 7 9 9 9 9 7 0 0 9 0 1 3 00.10 9 9 3 2 20.15 3 3 5 2 9 7 2 7 9 9 9 6 9 90.20 2 9 9 9 3 9 9 9 7 9 9 1 9 90.04 0.02 0.03 0.11 9 -5 3 6 7 9 5 6 3 40.03
4.53 0.9 3.76 3.76 4.38 1.8 4.51 5.16 4.26 5.66 6.44 4.69 1.74 0.91 4.22 0 3.54 0.51 1.88% 2% 7% 7% 8% 3% 8% 9% 7% 10% 11% 8% 3% 2% 7% 6% 1% 3%
0 0 13 12 0 5 1 0 1 10 0 1/1 30-day day: 710 1 201 1 5
per product plan elements, payment methodology
Minimal / no adjustmentsMinimal / no deviationsFew payment pointsPayment on revenue stream, monthly as it occursMinimal / no exceptionsMinimize payment methodologies (plan elements)Definition of an order (unit)Minimize year to year changesDefinition of the payment triggerDefinition of reporting requirements (i.e. product rollup)Exceed close schedule timingAccess to ongoing training / informationAutomated draw calculationsCommunications scheduleNotice of changesProcess flow with identification of control points
#REF!Improvement
Direction
Sales Customer Requirements Imp
ort
ance
Min
imal
/ n
o ad
just
men
ts
Min
imal
/ n
o de
viat
ions
Few
pay
men
t po
ints
Pay
men
t on
rev
enue
str
eam
, m
onth
ly a
s it
occu
rs
Min
imal
/ n
o ex
cept
ions
Tie
red
paym
ent
goal
s
Acc
ess
to o
ngoi
ng t
rain
ing
/ in
form
atio
n
Aut
omat
ed d
raw
cal
cula
tions
Min
imiz
e pa
ymen
t m
etho
dolo
gies
(pl
an e
lem
ents
)
Def
initi
on o
f an
ord
er (
unit)
Min
imiz
e ye
ar t
o ye
ar c
hang
es
Def
initi
on o
f th
e pa
ymen
t tr
igge
r
Ben
chm
arki
ng &
Sur
veys
Clear and timely communications about plan, implementation and backlog (transition)
Customer Competitive Assessment
Easy to understandOpportunity to get paid at higher rate (accelerators)Ability to value a sale / measure performance
Com
mun
icat
ions
sch
edul
e
Not
ice
of c
hang
es
Pro
cess
flo
w w
ith id
entif
icat
ion
of c
ontr
ol p
oint
s
Def
initi
on o
f re
port
ing
requ
irem
ents
(i.e
. pr
oduc
t ro
llup)
Exc
eed
clos
e sc
hedu
le t
imin
g
Rep
ort
deliv
ery
exce
ed s
ched
ule
Technical Importance: AbsoluteTechnical Importance: Relative
Modeling tools for commissions forecastingAbility to handle sales promotion strategiesProductivity drivenMeets all business unit needs
Market competitiveTimeliness of payments, reportingAccuracy of payments, reporting
Target ValueUSLLSL
Units
DesignRequirements
Correlation: ++ Strong Positive + Positive - Negative - - Strong Negative
HOUSE OF QUALITY – Sales
Steps:
1. prioritized customer requirements
2. brainstorm internal/design requirements
3. assess correlation
4. develop targets
Define
© 2006 Ceridian Corporation. All rights reserved. 39
One payment trigger Adjustment method based on actual revenue Simplified definition of an order and unit Simplified draws against commissions Reduced the number of rates Simplified some payment calculations Tightened rules around order booking
Sales Plan ConceptDriving out Complexity
Develop
© 2006 Ceridian Corporation. All rights reserved. 40
Optimize the Design
• Failure Modes & Effects Analysis (FMEA) using the project objectives
• Mitigating Actions:
Data analysis
Reporting / analysis to monitor behavioral changes
Control point in process flow to avoid complexity build up with future
sales plan changes
Optimize
© 2006 Ceridian Corporation. All rights reserved. 41
Verify the Design• Validate the plan through data analysis
Source Data: Using sales history and an assumed commission rate
Impact of changing commission payment trigger Financial impact / accounting treatment
No change Impact of cancelled orders and rep terminations
1% of SOV at risk Accelerating Commission Timing
Minimal expense impact in Year 1
Impact of change in Adjustment method Applied proposed method to historical sales
Distribution of order adjustments showed minimal dollar impact Few outliers investigated and ruled out as issues
Verify
© 2006 Ceridian Corporation. All rights reserved. 42
Initial Validation of Results• Project Objective: to improve overall satisfaction from a 2 to a 3
10/2004 Mean satisfaction score: 1.9 10/2005 Mean satisfaction score: 4
• Productivity gains projected 10/2004 Managers spent 6.3 hrs monthly reviewing reports and managing inquiries 10/2005 Managers projected their current monthly hours (avg 8.2) and the savings they
anticipate (avg 3.1). Average savings: 38%
• Qualifier: Small sample size Based on training (mocked up) reports Control plan includes follow-up survey
DMAIC: Control
Satisfaction Scores:5 = Best imaginable with known technology4 = Very good / happy3 = Good / acceptable2 = Not very good / poor1 = Poor / angry
© 2006 Ceridian Corporation. All rights reserved. 43
54321
95% Confidence Interval for Mu
2.12.01.9
95% Confidence Interval for Median
Variable: C2
2.00000
0.78220
1.87615
Maximum3rd QuartileMedian1st QuartileMinimum
NKurtosisSkewnessVarianceStDevMean
P-Value:A-Squared:
2.00000
0.93046
2.08494
5.000002.000002.000001.000001.00000
2572.68E-040.6143780.7222760.849871.98054
0.00016.431
95% Confidence Interval for Median
95% Confidence Interval for Sigma
95% Confidence Interval for Mu
Anderson-Darling Normality Test
Descriptive Statistics
Validation of ResultsOverall Satisfaction
54321
95% Confidence Interval for Mu
3.02.92.82.72.6
95% Confidence Interval for Median
Variable: Please rate
3.00000
0.80443
2.59322
Maximum3rd QuartileMedian1st QuartileMinimum
NKurtosisSkewnessVarianceStDevMean
P-Value:A-Squared:
3.00000
1.01104
2.88329
5.000003.000003.000002.000001.00000
149-1.9E-012.81E-020.8026480.895912.73826
0.0007.691
95% Confidence Interval for Median
95% Confidence Interval for Sigma
95% Confidence Interval for Mu
Anderson-Darling Normality Test
Descriptive Statistics
Satisfaction Scores:5 = Best imaginable with known technology4 = Very good / happy3 = Good / acceptable2 = Not very good / poor1 = Poor / angry
• Mean satisfaction moves from 1.98 to 2.74
Source: 2006 Sales Commission Survey
© 2006 Ceridian Corporation. All rights reserved. 44
Importance vs. Satisfaction with Sales Commission Reports
0%
20%
40%
60%
80%
100%
IC Commission Sales Detail Sales Summary Open Items
2005 Importance - Must have or above average 2006 Importance - Must have or above average
2005 Satisfaction - Acceptable or better 2006 Satisfaction - Acceptable or better
• Assessment of the importance of reports remains stable
• Satisfaction with reports has increased
Validation of ResultsIndividual Report Satisfaction
Source: 2006 Sales Commission Survey
© 2006 Ceridian Corporation. All rights reserved. 45
Survey topics: 2005 2006
% satisfied with report timeliness 27% 73%
% having received training 43% 32%
Hours spent in audit / follow up each
month:
• Sales Managers
• Sales Reps
6.3
4.1
2.2
3.2
Validation of Results2005 vs. 2006 Survey Comparison
Source: 2006 Sales Commission Survey
© 2006 Ceridian Corporation. All rights reserved. 46
Lessons Learned• Focus groups allow for in-depth, qualitative
discussions
• Surveys offer statistically-significant data
• Distinguish VOC by customer segment
• Understand the relative priority of requirements using the Analytic Hierarchy Process tool
• Use the HOQ – to a point -- to develop internal requirements and targets
• Alternatives available to piloting a process
© 2006 Ceridian Corporation. All rights reserved. 47
Conclusions• Reaching the Voice of the Customer through surveys
and focus groups was instrumental in: Providing our baseline project metric Ruling out theories Prioritizing our list of customer requirements Establishing our sales plan design targets Providing verbatim that fed our root cause analysis Substantiating the financial benefits of the project Providing the data to manage competing needs amongst
customer segments Providing ongoing process performance monitoring
© 2006 Ceridian Corporation. All rights reserved.
Questions?