Implementing InsideOutside Sales Plans using Oracle Incentive Compensation

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Implementing Inside/Outside Sales Plans using
Oracle Incentive Compensation

• NCOAUG Training Day
• August 15, 2003
• robert.rentz_at_us.ssiworldwide.com

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Objectives

• Overview of Incentive Comp (IC)
• Outline a business problem
• Develop a solution using IC
• Define the set up
• Review the Process Steps
• Questions and Answers

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Overview of Incentive Comp

• Re-designed in 11.5.7 to be JSP based
• Integrated with AP or Payroll
• Pre-seeded feeds from Receivables, Order
  Management, and Quotes
• Supports User-defined collection sources
• Multi-tier formula calculations for Plan
  Development
• Multi-dimensional capability for establishing
  commission rates
• Excel import and extract utilities
• Payment manager roles for controlling payment
  review and approval
• On-line access to sales reps for reviewing
  commissions

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Outline a Business Problem

• Company has inside sales managers assigned to
  territories based on geography and sales channel
• Company contracts with outside sales groups to
  perform direct sales activities
• Company pays sales groups a commission based on
• Maximum commission for a customer
• New Customer (First sale is within the last two
  years)
• Shared commission with local salesrep in the
  geography
• Discounted revenue
• Company pays inside sales managers based on
  discounted revenue

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Company has inside sales managers assigned to
territories based on geography and sales channel

• Geography
• North East, East, West
• Sales Channel
• Wholesale, Retail
• Sales Territories
• North East Wholesale
• East Wholesale
• West Wholesale
• East Retail
• West Retail
• Receives 100 Sales Credit for the sale

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Company contracts with outside sales groups to
perform direct sales activities

• Spans geographies and channels
• Independent from inside sales managers
• Receive 100 Sales Credit for the sale
• Are assigned directly to a customer
• Can share sales credit with a local sales group
  also receiving 100 sales credit

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Sales Diagram
Order for 10,000
Customer Sales Group 10,000 Sales Credit
Shared Sales Group 10,000 Sales Credit
Inside Sales Manager 10,000 Sales Credit
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Company pays sales groups a commission based on

• Maximum commission for a customer
• Set maximum commission for a customer
• Is assigned to the sales group for the customer
• New Customer
• 2 maximum add-on for new customers lt 2 years
• Shared Commission
• Set percentage for a customer Ship-To
• Different sales group than the one for the
  customer
• Receives half of the New Customer add-on
• Discounted Revenue
• Assumes customer will ALWAYS get the terms
  discount

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Company pays inside sales managers based on
discounted revenue

• Assumes customer will ALWAYS get the terms
  discount

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Sales Diagram
Assume New Sale with 8 max and 2 shared
Order for 10,000
Commission 4,000 New Sale 1,000
Customer Sales Group 10,000 Sales Credit
Commission 2,000 New Sale 1,000
Shared Sales Group 10,000 Sales Credit
Inside Sales Manager 10,000 Sales Credit
Sales Credit 10,000
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Issues

• Cannot have more than 100 sales credits in Order
  Management
• Cannot credit two different sales reps in the
  same transaction at 100
• Sales credits cannot roll up to sales managers
• Sales groups do not report to the managers

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Develop a Solution using IC

• Make shared rep a Team member
• Problem
• Shared rep belongs to more than one team
• Would get credit for any sales his teams would
  get even if he was not assigned to the customer
• Develop an algorithm for giving the shared rep
  50 of the sale but twice the commission rate
• (10,000 x 50 5,000 x 4 2,000)
• Problem
• Not every customer has a shared rep
• Specific sales credits would have to be entered
  for every sales order cannot default

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Develop a Solution using IC

• Perform multiple collections for the same
  transaction
• (AR, Shared Rep, and Manager)
• Can assign 100 sales credit to each collection
• Can control what plan or plan element is used for
  calculation
• Does not require any additional data at Order
  Entry time
• Is a standard feature of the IC product (no
  customization)
• Looks Good!

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Develop a Solution using IC

• Components of the solution
• Create Sales Groups as Vendors and Vendor
  Contacts
• (Must pay them using AP Invoices)
• (Must use the AP interface and NOT Payroll)
• Assign Primary Salesrep to the Bill-To location
• (Defaulting rule must ALWAYS get salesrep from
  Bill-To)
• Capture Max in DFF on the Bill-To location
• Capture First Order Date on the Bill-To Location
• Assign Shared Salesrep to the Ship-To location
• Capture Shared in DFF on the Ship-To location
• Create IC Sales Groups with the sales managers
• Create territory mapping to sales groups
• Assign territory to Ship-To location
• (Defaulting rule must ALWAYS get territory from
  Ship-To)
• For managers, get salesrep based on territory

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Define the Setup(In Oracle AR and Sales
Administration)

• Create the vendor and vendor-contact records
• Create the necessary DFFs for Bill-to and Ship-to
• Set up the IC Sales Groups
• Assign the outside sales groups to their own
  group
• Assign sales managers to their territory group
• Create the Sales Territory Key FF
• Import Supplier-Contact Resources
  (vendor-contact)
• Assign resources to roles and groups
• Create a Payment Analyst Super User
• Create a Payment Analyst Manager
• Assign the PA manager as the Analyst for each
  resource

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Define the Setup(Incentive Compensation)

• Create the collection sources, queries and
  mappings
• Use Source column to define how to derive
  Commission
• Use Indirect definition to link to necessary
  tables
• Complete the formula, plan element, and plan
• No rate table is needed since commission is
  mapped in transaction
• Create a dummy rate table because IC requires at
  least one rate table in a plan element
• Create a Paygroup for AP
• Assign each resource to the Paygroup

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Create the collection sources, queries and
mappings
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Create the collection sources, queries and
mappings
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Create the collection sources, queries and
mappings
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Complete the formula, plan element, and plan
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Complete the formula, plan element, and plan
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Complete the formula, plan element, and plan
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Create a Paygroup for AP
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Assign each resource to the Paygroup
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Review the Process Steps

• Collect the transactions
• Receivables and Custom
• Load the Transactions
• Calculate Commissions
• Create the Pay Run
• Only the Payment Analyst Super User can do this
• Create the Work Sheets
• Review and Approve the Work Sheets
• Approve the Pay Run
• Only the Payment Analyst Super User can do this
• Submit the Pay Run
• Only the Payment Analyst Super User can do this
• Run the Payables Open Interface Import
• Source Oracle Sales Compensation
• Submit the Payment Batch

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Collect the transactions
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Collect the transactions
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Load the Transactions
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Calculate Commissions
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Create the Pay Run
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Create the Work Sheets
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Review and Approve the Work Sheets
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Approve the Pay Run
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Submit the Pay Run
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Run the Payables Open Interface Import
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Submit the Payment Batch
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Implementing Inside/Outside Sales Plans using
Oracle Incentive Compensation

• Questions and Answers
• robert.rentz_at_us.ssiworldwide.com