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Merced Systems Goes Global....in Hong Kong

Posted by: Gadi Bashvitz on Sep 14, 2011

In this, the second edition of “Merced goes Global” we’ll start discussing our activities in Asia Pacific. I am writing this blog entry from my hotel room in Hong Kong.


 
I wish that this was my view from the hotel, it is actually the view from a client we visited earlier this week.


The Merced office in Hong Kong was the first office we opened earlier this year. We have both Sales and technical people in Hong Kong and it is the HQ for our North APAC operations,  and covers: Hong Kong, China, Taiwan, Japan and Korea.


Our office is in the Entertainment building in Central HK and is easily accessible from anywhere in HK. It also has a pretty good view of the bay and other famous HK landmarks.

Throughout 2011 we have been making significant progress working with a number customers and prospects on both Sales Performance Management (Incentive Compensation Management) projects and Service Performance Management implementations in the region.


Earlier this week we presented at the Hong Kong CIO Summit where the key topics were the proliferation of data, social and mobile in large organizations customer facing organizations.

 

We discussed the necessity of implementing Business Execution solutions across the front-line operations for these organizations in order to better manage customer experience, profitability and drive operational efficiency. People who participated in the discussion included current customers including Dell and other leading organizations including Coca Cola APAC, Standard Chartered Bank, Cathay Pacific, PCCW, HSBC and others. The discussion was based on the theme of the presentation given by Rob Strickland, the previous CIO of T-Mobile and Dish Networks that was given in HK a few months ago and was followed up by a webinar titled “ Transforming Your Contact Center into a Strategic Asset” the recording of which can be found here.


I will continue updating as we make more progress in North APAC. 


The next post will discuss our ASEAN and India operation headquartered in Singapore and the CXO leadership conference in Singapore which Merced sponsored on September 9, 2011.


BTW, this is how I looked as the courier, bringing all the printed material and posters for the event from Hong Kong to Singapore. Pretty bad for a guy who has perfected the art of spending 3 weeks on the road with no more than a 15 pound trolly…

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Author: Gadi Bashvitz

Gadi Bashvitz is Merced’s VP for Asia Pacific and Latin America, he has been with Merced for almost five years and held multiple senior positions in Product Management, Product Marketing, Business Development and Sales.

Dreamforce 2011 - Merced Systems' Sales Performance Contest - Day One iPad Winner

Posted by: marketing on Sep 01, 2011

Our first winner of our two day “Sales Performance Contest” was announced at the end of Day Two of Dreamforce 11 (#DF11) - Saleforce.com’s annual user conference and exposition at Moscone Center in San Francisco.  Check out the video to find out just how many steps it took to win an iPad!

 

 

 

Sales Reps & the Comp Process: Hey – Where’s my Money?!

Posted by: David Kelly on Aug 12, 2011

Sales Performance Management (SPM) is all about empowering, incenting, measuring, and eventually paying the sales force to align its behaviors and tactics with corporate goals.  The compensation plan is a key part of the SPM process.  Ideally, it rewards the payees for doing what the company needs them to do.  If your sales force is focused on doing things for their own benefit that will also benefit your company, it becomes a win-win.

The payees’ perception of the comp program should always be, “If I do this good thing (sell more, sell more profitably, or sell a better product mix), I will earn this reward.”  The value is lost when it turns into, “I did this good thing (at least, I think I did…), now where’s my money?”  At the end of the day, the same good things might be accomplished, the same rewards paid, but the willingness to do the next good thing might well be compromised when the commission or bonus is seen as payment due to be fought for, rather than as something to aspire to.

What this means to Sales Ops and Finance is that a compensation system that is perceived as an impediment to collecting commissions and bonuses will bring the ROI for the whole incentive compensation program into doubt among the very people who should be trying to find ways to earn more rewards.  Every step forward they make will be immediately followed by a look back to see if the comp system is keeping up.
There are many ways an ICM system can become a roadblock in the sales incentive process.

The ones we have seen most commonly include:

  • Inaccuracy
  • Lack of transparency
  • Unnecessary complication


INACCURACY:  Almost any comp system more sophisticated than long-hand calculations on yellow stickies should be able to calculate accurately – assuming it is operating on good data, and assuming it is configured properly, that is, set up in accordance with your business rules.  Of course, these two assumptions can be pretty big “ifs.” And sometimes it takes a data rationalization project to address one or both of these issues.  But either way, if the commission and bonus calculations coming out of your comp system aren’t correct, the payees will spend more time looking back at old deals than looking forward to new ones.

LACK OF TRANSPARENCY:  Even if the comp system calculates properly, if it isn’t clear and explicit about what has been credited and how much is being paid according to what rules, the users will not have confidence in it and will spend an unacceptable percentage of their potential selling time checking up on it.  Thoughtful reporting of meaningful metrics and useful information will go a long way towards redirecting the payees’ attention forward towards selling instead of looking in the rearview mirror.

UNNECESSARY COMPLICATION:  Can your sales force describe in 25-words-or-less exactly what they must do to optimize their commission checks and help your company achieve its goals?  Or do you have so many complex terms and conditions wrapped around the sales compensation process that no one can answer that question?  The most accurate and transparent comp system in the world won’t counteract the negative effects of 15 pages of legalese tacked onto a comp plan, especially when the legalese is all about the reasons why business won’t count towards the payees’ incentive comp.  A system implementation project can be a good time to revisit the language and logic of the plans to get to a simpler model that the payees can understand and work towards, rather than one to be deciphered after each deal is reported.

Compensation systems and processes are all about changing “wrong” behaviors and reinforcing “right” behaviors.  It’s as much a psychological problem as a technical one.  It’s reasonably easy to get the right answer, eventually.  But you have to make it easy for the payees to do the right thing.  Making them fight for what you’ve promised them takes their concentration off the next deal, and this has a direct impact on top line revenue.

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Author: David Kelly

David Kelly is an Incentive Compensation Management (ICM)  Solutions Architect with Merced Systems.  He has more than a decade of experience in translating ICM business requirements into maintainable, high-performing systems for many companies across various industries.  He can be reached at david.kelly@mercedsystems.com.

CSO Insights 2011 Sales Compensation & Performance Management Survey

Posted by: marketing on Jul 22, 2011

CSO Insights, an independent 3rd party research firm, is currently in the process of launching its fourth annual Sales Compensation & Performance Management survey. 

CSO Insights specializes in analyzing companies’ sales effectiveness and optimizing the way they attract, acquire and retain customers.  
Merced Systems is proud to again be a survey sponsor this year.  We would like to invite you to take part in this year’s new survey.  In return for your time (less than 15 minutes) you will be able to compare your answers with those of your peers as you begin designing your plans for 2012. This report will be released September 15, 2011.

In appreciation for taking part in this study, you will:

  • Be able to immediately download CSO Insights’ recent study:  2011 CRM Sales Effectiveness Key Trends Analysis
  • Receive the full 2011 Sales Compensation & Performance Management report when it is released September 15th.

Click here to take the survey.

Thank you for your interest and for participation in this ongoing sales research effort.

Note: If during the course of taking this survey you need to take a break, simply sign off and when you sign back in again later you will be able to pick up right where you left off.

iPads: Their Impact on the Top Six Sales Processes - Leading Analyst Firm Reports on iPad Deployment in Sales Organizations

Posted by: marketing on Jun 07, 2011

Gartner Research recently published a research report outlining the Top Six Sales Processes that iPads will have the most impact on within sales organizations, “iPads: Their Impact on the Top Six Sales Processes.” This report is extremely timely, as Merced has recently rolled out our own iPad functionality – a true first in the Sales Performance Management space. Our app (free to download via Apple’s App Store – search for “Merced Systems”) allows sales teams to access up to date sales and compensation analytics such as,

  • Dashboards for executive summary, team performance, inquiries and payments,
  • Sales, commissions, and attainment performance and trends by employee, plan, and product,
  • Performance projections against target,
  • Product mix by either sales, commission or order quantity,
  • Transaction summary data by product with drill down to transactions, and
  • Detailed inquiry data by employee.

 

 

Growing Trend
Tablet computing adoption in the field is on the rise, as corporate sales teams are eager to leverage the “ad hoc” data presentation nature that mobile devices provide. Medical-sector companies such as Abbott Laboratories, Medtronic Inc. and Boston Scientific Corp. are among the drug and medical-device firms making the move, while others say they are testing out the devices.
Sales staff at fashion retailer Benetton are using Apple’s iPad to enhance their knowledge of the company’s product range and improve customer service.
The business’s sales agent network will use the tablet device to keep up to date with the emerging collections across Benetton’s womenswear, menswear and children’s clothing ranges, as well as the Sisley, Playlife and Undercolors brands sold in-store.

   
For more information, please visit http://www.mercedsystems.com/index.php/products-home/merced-incentive-compensation-management/sales-compensation-analytics or contact us directly at info@mercedsystems.com to schedule a short demonstration.

 

Contradiction Prediction

Posted by: hgoldberg on Mar 08, 2011

Predicting the future is hard, especially when it comes to enterprise software sales. Forrester says ERP spending will be down, Gartner says it will be up. In the Sales Performance Management category, we are seeing significant interest that started early in 2010 and seems to be continuing in 2011 for our products and services. We believe large enterprises are coming to three conclusions as the recession recedes and growth returns that is driving uptake of SPM solutions:

  1. Should I be in the software development business or should I purchase my applications from a company that does this full time? In more and more cases companies are saying that as they focus on their core business execution, they should count on experts to provide them with the applications they need to run their business. In a number of customers this includes not just building the application but also hosting and managing the application in a cloud environment.  We have a number of customers today who are relying more on the Merced  for their entire solution and freeing up their IT organization to focus on projects core to their business.
  2. Companies are looking at sales effectiveness more closely than ever. We are seeing this in the job growth numbers.  Although companies are growing again, they are not adding people. This growth is being fueled by an increase in effectiveness and productivity. To grow your top line, you need a highly effective sales organization with the same or less staff than you had last year and to get to this stage, you must start looking at Sales Performance Management. In CSO Insight's study on Sales Compensation and Performance Management  organizations that install Sales Performance Solutions simply do better.  They sell higher margin products (31% to 52%), are better at cross sell and upsell (45-57%) and they are better at forecasting their businesses accurately  (11-22%).
  3. Companies have to continue to save money. Commissions, Spifs, Marketing programs, variable comp, bonuses make up one of the largest expense items for business to consumer companies. A 1% savings in these expenses can lead to millions of dollars in savings.  With the average SPM project saving between 5-10% in variable compensation costs, the amount of resources that can be directed to other strategic projects or the bottom line in a company is huge. We have seen a number of customers in the telecommunication, banking and financial services industries all reap these savings by implementation Sales and Service PM solutions.

Merced Systems finished up 2010 with a 34% year over year revenue growth.  Our customer base represents some of the largest companies in the world who are seeing the type of productivity and dollar savings they need to be competitive in their respective markets.  We won’t know until the of 2011 who was correct on the ERP prediction, but we know that in the area of Sales Performance Management, companies are more interested today than ever before for this application.

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Author:  Harold Goldberg

Harold Goldberg is the Chief Marketing Officer and Vice President of Strategy at Merced Systems. Goldberg brings more than 25 years experience in senior marketing, strategy and sales roles at top-tier organizations. 

End-of-year Checklist for Compensation Administrators

Posted by: Jackie Wheeler on Dec 21, 2010

As you approach the end of a financial year, there are several tasks you take to ensure your plans and calculations will be handled correctly in the new year:

  • Set Up Exchange Rates The plan rate should be set for the whole year at the beginning of the year. This is the rate generally used to convert annualized information such as targets (quotas).

  • Set Up Plans Now is the time to review your existing plans and make any necessary updates to reflect changes in rates, thresholds, and targets. Also, consider whether to create new plans for the new fiscal year or continue using existing plans.

  • Set up Salary and OTC If you are using salary and OTC functionality, you should ensure that these are set correctly for the new financial year.

  • Update Sales Structures (Hierarchies) If you have reorganized territories or payees or added new roles, update your sales structures accordingly.

  • Copy SPIFs Because SPIFs are short-term incentives, they are year-sensitive in Merced ICM. If you want to continue using a SPIF in the new financial year, you can create a copy of it.

  • Set Up Variations The values within a variation are specific to the financial year. Therefore, you set up new values for any variations being used in plans for the new financial year.

  • Create New Data Ports The Merced ICM data ports that load events and sales structures can be set to use a specific year. If you want to use these data ports in the new financial year, create new instances of them.

  • Adjust Payments Consider how you want to handle positive and negative changes to payment results based on data corrections. Do you want to recover the entire payment or prorate it? Over what period of time? From a specific or limited group of earning codes? For example, if a sales rep must sell 10 widgets to qualify for an end-of-year $100 bonus, and a return is caught after the bonus is paid, you might choose to recover only a fraction of the bonus (such as $10) or the whole $100, and you might recover from future “bonus” earnings and not touch the other commission type streams. Keep in mind that the timing of payment adjustments can have positive or negative tax implications for payees. You should work closely with your finance and payroll colleagues to ensure that the timing of adjustments will not adversely affect payees and that they are aware of the tax implications. For an article on timing year-end bonuses in the U.S., see: http://www.bakerandcompany.com/how-do-i/how-do-i-time-a-year-end-bonus-to-be-taxed-next-year/ .

  • Add Reference Data Add any date-specific reference data (such as products and sales structures) to the new year.

  • Close Old Year While in general the previous financial year remains open for some time (to allow for last-minute changes), you might want to close the year prior to the previous one as part of rolling over the visible years.

To view a white paper that provides more information on these tasks, see the following post on the Merced community forum (login required):
https://forums.mercedsystems.com/index.php?topic=3033.0

What Performance Metrics are Right for my Business? (Part Three of Four)

Posted by: James Burr on Jun 23, 2010

This entry is a continuation of my previous post: What Performance Metrics are Right for my Business? (Part Two of Four).  In my previous post I discussed how the first tier of the return on investment from performance management is improved efficiency. In this post I’d like to introduce the 2nd tier: Focus on your Customers.

Now that you have the foundations in place and have started the process of enabling managers to become effective coaches you can start to introduce metrics that focus more on the customer interactions.

The metrics on this tier are more complex to capture and will often involve combining information from multiple departments and channels.


        1. Can you resolve the Customer requirement on the first interaction?

             Metric: FCR or Right First Time

        2. How do the Customers rate your service?

              Metric: Customer Satisfaction (Surveys, Complaints, Door to Door)

        3. How much does it cost to resolve the customer requirement?

              Metric: Cost per Call Resolution

               

The key to getting the most benefit in this tier is understanding the balance between the Cost Per Call and resolving the customers requirement. Moving to First Call Resolution should include an understanding of the current costs involved in resolving each customer interaction. Customer surveys should be in the context of the product and department being discussed and should be linked back to the original employee.


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Author: James Burr

James Burr is the Business Consulting Manager with Merced Systems. He has over 7 years experience implementing Sales Performance Management systems in a broad range of industries including Telco, Finance and Automotive. He can be reached at james.burr@mercedsystems.com 

Exceptions in ICM Operations: When do they help? When do they hurt?

Posted by: David Kelly on Apr 27, 2010

Incentive Compensation Management in Sales Operations can be the strangest of corporate beasts.  Sure, it’s a cold, hard, financial problem, but it’s a soft, squishy, psychological one too.  You are using money or other rewards as a lever to try to modify the behavior of your sales people, but the lever isn’t applied directly to the behavior.  At best, you pay on the outcomes of the behaviors after the revenue recognition process and the comp plan terms and conditions have been applied.

What this distinction can lead to is the need to make exceptions to the rules when the right behaviors haven’t led to the right results.

The most obvious example of this is when the economy crashes and burns.  The collapse of the Asian economy in the late ‘90s caused comp plans to be rewritten, quotas to be slashed, and drastic measures like guaranteed incentive payments to be slammed into place to keep the sales force alive and selling through the downturn.  In this kind of situation it’s critical to do what’s “right” rather than what the comp plan says.  Your sales guys didn’t cause the economic crisis, so holding them to the terms of the plan causes financial hardship to the people who made you successful the year before.  You have to do what you can to keep your best reps productive until the economy comes back.

A more localized example is when Rep A lends an active hand on Rep B’s deal.  The deal falls in Rep B’s sales territory, but you should absolutely give some credit (and commissions) for the deal to Rep A for the help given in landing the customer.

Okay, we all get it – ICM systems must support some level of exception-based payments.  But the word “some” is important here.  I’m reminded of a Comp Manager who told me that her company’s monthly process was to calculate commissions, print a report, and carry it to the VP of Sales.  The VP would cross out the numbers and write in the amounts he felt like paying each rep.  And that’s how much they paid.

I laughed.  She didn’t.  She was serious – that was their comp process.  And that’s just insane.  Random amounts of money showing up on the commission check each month do nothing to drive good selling behaviors.  We’ve all seen comp plans with conditions like “if it’s Tuesday and a red car passes, pay an extra 25% unless we decide not to”.  Do the reps really know how to behave with a plan like that?  And we’ve all seen the situation where any sales rep who whines loudly enough gets to go to President’s Club, even when they haven’t earned the trip.  That trip doesn’t do anything to make your company successful either.

The takeaway is that some exceptions to the rules must be made to keep the company on the right track.  But some exceptions do nothing positive for the company, and sometimes can be insidiously harmful to the company’s long-term success.  The comp admins know the difference, but often don’t have the authority to stop the harmful exceptions.  It’s a top-down activity to make your compensation plan exceptions work for your company, not against it.

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Author: David Kelly

David Kelly is an ICM Solutions Architect with Merced Systems.  He has more than a decade of experience in translating ICM business requirements into maintainable, high-performing systems for many companies across various industries.  He can be reached at david.kelly@mercedsystems.com.

What Performance Metrics are Right for my Business? (Part Two of Four)

Posted by: James Burr on Apr 01, 2010

Today I will build on my previous post: What Performance Metrics are Right for my Business? (Part One of Four). 
We've seen that when looking at an organisation and the return on investment in Performance Management there are typically 3 tiers that a company will transition through. In this post I’d like to discuss the 1st tier: Improving Efficiency.

In the first tier the focus is on improving the efficiency of your employees by removing common barriers to their day to day activities and freeing up time to focus on your customers and receive the coaching they require to improve their own performance. Managers are the key to this improvement and understanding whether they are putting time into improving employee performance or instead are spending that time on reporting, data capture or dispute management. When choosing metrics and KPI's to measure performance in this tier it is imperative you give yourself a clear understanding of the following:
 
 1. How much is every contact with the customer costing you?   Metric: Cost Per Contact
 2. How much time are your managers spending coaching?   Metric: Coaching Time
 3. How often do your managers coach your frontline staff?   Metric: Coaching Cadence
 4. Can you identify whether employees are using best practice in their calls?
  Metric: Quality Management (Call Monitoring)

Getting the basic coaching principles right in this tier is crucial and your reporting should be geared towards measuring the correlation between coaching and performance, for example does AHT (employee metric) reduce when Coaching Cadence (manager metric) increases?

In my next post, I will discuss tier 2: Focusing on your customers.

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Author: James Burr

James Burr is the Business Consulting Manager with Merced Systems. He has over 7 years experience implementing Sales Performance Management systems in a broad range of industries including Telco, Finance and Automotive. He can be reached at james.burr@mercedsystems.com 

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