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In the spirit of Billy Beane & the Oakland A's, 6 non-obvious metrics for big impact on performance

Posted by: marketing on Sep 29, 2011

In the spirit of Billy Beane, here are examples of "Moneyball Metrics": uncommon and non-obvious metrics which we have found to have a major impact on performance:

  • Coaching frequency -- can be tracked using web Forms and is always highly correlated with subsequent agent performance management
  • AHT or ASA variation -- permits superior forecasting and scheduling -- which in turn permits smaller shifts -- as a result of separating controllable and random variation
  • Supervisor effectiveness indexes -- comparative impact of coaching, agent improvement under their management, and impact of rotating team leaders
  • Balanced scores -- indexes of agent or team performance with data from multiple data sources, weighted by importance
  • Bonus calculations -- weighted averages, eligibility rules (such as attendance or quality minimums), dollar payouts
  • Metric tracking sessions -- frequency with which Supervisors and other managers check and use statistics on their teams to make better, fact-based decisions

Links:
http://www.imdb.com/title/tt1210166/
Moneyball white paper on www.mercedsystems.com

How is performance management like "Moneyball"?

Posted by: marketing on Sep 29, 2011

In the 2003 bestseller and now major motion picture "Moneyball," (opening nationwide on Sept. 23) we learn how Oakland A's general manager Billy Beane used data-driven management to reshape a laggard major league baseball team into a world-class winner.  Instead of focusing on traditional metrics, Beane discovered that winning baseball games was more strongly correlated with lesser-known statistics.  He also focused on elements of the game where success metrics hadn't been developed in the past due to lack of data.  He trained his organization to track new types of statistics to gain a data advantage in recruiting and player development, and, critically, he got his entire organization aligned around the new metrics and philosophy.  As a result, the A's became one of the winningest teams, with one of the lowest cost structures, in major league baseball.

Like the Oakland A's and other baseball teams before "Moneyball," many contact centers use time-honored measures but miss the opportunity to truly redefine and improve performance. 

During the last few years many teams have begun emulating the A's "Moneyball" methods to transform their organizations to better compete.  Given the large financial opportunity for operational savings and customer loyalty impact in the contact center, it's likely that as Performance Management proves itself in this environment, the same competitive ripple effect will take place.

Links:
http://www.imdb.com/title/tt1210166/
http://web.mit.edu/newsoffice/2011/sloan-sports-conference-0308.html
Moneyball white paper on www.mercedsystems.com

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 Two iPad Winner

Posted by: marketing on Sep 02, 2011

Our Day Two winner of our second annual “Sales Performance Contest” was announced at the end of the day at 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!

 

 

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. 

What is Truth? Or, what does all this Data in my SPM System Really Mean?

Posted by: David Kelly on Sep 15, 2010

An SPM system can be one of the most complex systems in a company’s business environment because it solves one of the most complex problems a company has.  The system’s job is to help align sales force behaviors with the company’s strategic goals.  Good data – about the payees, about the company’s business drivers, about the plan elements like quotas and rates, and about the sales events – is critical to the process.  Sourcing and maintaining that data is a significant challenge faced on every SPM project.  Where the data is suspect – due to inaccuracy, untimeliness, or incompleteness – it puts the effectiveness of the entire SPM program at risk; the Payees begin concentrating more on making sure they’re being paid (at least) as much as (they think) they deserve and less on selling.

Quantum physics aside, let’s consider it a Law of the Universe that when you know two “facts” about the same thing, those facts probably ought to agree with each other, or at least, not disagree with each other too much.  This puts us in the position of wanting to have different systems in a company’s business and IT infrastructure all agree about the facts of an event as much as possible.  When multiple systems track the same event, but each has its own rules and ways of representing it, you open the door for disconnects.

As an example, your CRM system has the Sales Rep’s best guess about what the revenue for a potential sale will be.  The system in which the order is booked will have an event (or several) that looks a lot like the event in the CRM system, but which could well have different values, dates, or rules applied.  The fulfillment or supply chain management system might treat the business event completely differently (Widgets are out of stock until next month and will be shipped separately), and this might (or might not) be reflected in the invoicing system.  Then G/L gets its hands on the financial side of the event (can’t recognize the revenue for those Rugalators until we get the acceptance doc from the customer).  The odds are that some of these systems don’t play and share well with each other.  But these are the systems that could be feeding events to the incentive compensation management system.  So what is the “truth” of that sale?  Ask the sales rep, and she will tell you it’s the number she entered in the CRM system, and what’s up with the stupid commissions system that it can’t even pay on the right amount?

In a way, the truth doesn’t matter, so long as we can find some version of reality that we can all settle on.  If you have a nice chunky data warehouse that we can agree is the single source of truth (regardless of what the source systems say), it makes it easier to calculate, pay, report and justify incentives.  But if the source of truth is disparate upstream systems, yellow stickies and voice mails, it becomes harder.  Maintenance and synchronization of shared data becomes an important architectural consideration for bringing an incentive compensation system online.  If shared data can be edited in one system, then all the other systems that use that data must be notified of the changes as well if the systems are ever to be reconciled. So the point to all of this is that your compensation plans are not necessarily the hardest part of your SPM implementation.  The SPM system has tentacles that touch most systems in your company, and the interactions between them bring challenges that must be addressed as thoroughly as the comp plan “math”.  Otherwise, truth can become a pretty slippery concept.

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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.

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