Oracle Incentive Compensation at Merial Ltd.

1
Oracle Incentive Compensation at Merial Ltd.
Paula Harris, Merial Ltd Kathy Lancy, Merial Ltd
Chetan Rischie, Consultant
2
Company Background

• Dedicated to the health, well-being and
  performance of animals.
• Merial is a world-leading, innovation-driven
  animal health company, providing a comprehensive
  range of products to enhance the health,
  well-being and performance of a wide range of
  animals.
• Merial employs approximately 5,000 people and
  operates in more than 150 countries worldwide.
• Merial's 2004 sales were in excess of 1.8
  billion.
• Merial Limited is a joint venture between Merck
  Co. and sanofi-aventis
• Merial's best known products
• IVOMEC (ivermectin) -- the worlds single most
  successful animal health product, is used for
  treatment and protection against parasites in
  large animals such as cattle, sheep and swine.
• FRONTLINE (fipronil) -- is now the worlds best
  selling flea and tick treatment for dogs and cats.

3
Oracle Implementation Background

• Oracle Modules Implemented in 2002 for US
  Headquarters Operations
• Financials
• Supply Chain
• iStore
• Incentive Compensation
• First Commission payment through Incentive
  Compensation in 2003 (OIC was part of the
  portfolio in 2002, Merial US was not fully
  configured until Oct 2003)
• Internal Sales-Force (350)
• Partners/Sales Agents (700)

4
Challenges and Issues

• Implementation Challenges
• Custom Sources needed to be defined to accept
  Sales data from Partners
• Frequent Changes in Compensation variables (Rate
  Structure, Hierarchy, new Partners) by the
  business
• Delay in receiving Sales Data from Partners
• Customizations in the form of Rollup Tables for
  Bonus calculations designed
• Design needed for paying multiple recipients
  (Sales Person, Sales Agents) on each transaction
• No interface to AP or HR

5
Challenges and Issues

• Business Versus IT
• Adhoc Implementation
• Lack of Project Plan for OIC Implementation
• OIC was a secondary priority during
  implementation
• Lack of In House OIC Expertise
• Consultants worked directly with Business with no
  governance
• Users knew the front end application, not the
  mechanics
• IT Business Analyst assigned to transition
  knowledge from Consultants almost 1 year after
  implementation
• Testing Best Practices not utilized
• Concepts were tested in Production leading to
  proliferation of junk data
• Mapping for sources was defaulted to fields that
  caused miscalculations in commissions

6
Challenges and Issues

• Post Implementation Issues
• Delay in receiving partners data and business
  model/OIC configuration required re-calculation
  of entire commission pool each month. This would
  take weeks at quarter end and year ends to
  finalize numbers
• Data Growth was phenomenal. For every transaction
  OIC replicates
• Additional transaction for each person in the
  Hierarchy
• Additional transaction for matching Plan Elements
• OIC recalculations and Database Maintenance
  activities took significant time, causing issues
  with testing any OIC modeling effort and other
  Oracle initiatives
• Sales reporting was a challenge due to multiple
  OIC transaction lines for each AR transaction
  line
• Business and Sales Partners lost faith in OIC
  capability to calculate accurate commissions due
  to system problems. Considered it inflexible and
  prone to error

7
Post Implementation Cleanup

• Recognized the need for joint governance
  (Business and IT). Analysts familiar with pricing
  and sales assigned by Business to
  facilitate/coordinate/validate business
  requirements
• Recognized that Data Archiving was the top
  priority. Without archiving in place, impossible
  to even test any changes to comp plans
• IT developed (in-house) archiving scripts for OIC
  transactional data. Reviewed by Oracle Support to
  ensure compliance with Oracles standards.

8
Post Implementation Cleanup

• Recognized the need to address the data growth
• Review of Compensation Plans resulted in
  combination of several plans into single plan by
  expanding the Input/Output formulas
• Utilization of Customized Rate Tables allowed to
  keep the same compensation plan without creating
  complicated multi-dimensional Rate Tables
• Addressed Quarterly/Annual Bonus Plans. By
  creating a few custom views on the transactional
  tables to provide the roll-up information,
  converted the Commission Plans to Bonus Plans
• Complete re-evaluation of mappings for all
  sources in order to speed processing and ensure
  data integrity.

9
Engaging Business

• Reconciliation effort was completed with each
  business unit. Analysts assigned by Business
  played a critical part in validation of
  requirements
• Tied OIC sales numbers to Merial US sales with
  all variances thoroughly explained
• Engaged business leaders to communicate
  commission plans as early as possible (3 months
  ) to allow for proper development and testing of
  plan changes
• For ad-hoc changes through out the year, followed
  proper Change Control process
• Continue to encourage business to simplify
  compensation plans wherever possible

10
Lessons Learned

• Project Management/Resource
• Ensure Business actively participates in project
  management and assigns experienced Compensation
  Analyst(s)
• Consultants and IT work with Compensation
  Analysts on design/testing before engaging the
  end users
• Institute Change Controls, all changes to Plans
  must be tested and signed off prior to migration
  to Production.
• Request sufficient lead time to implement and
  test changes
• Ensure that OIC Consultant/IT Analyst must have
  technical skills

11
Lessons Learned

• OIC
• Review the data pipe and project the data growth.
  This allows you to evaluate closing cycles
  towards the end of Fiscal Year.
• Simplification of Compensation Plan Elements. You
  may be able to create more complex Input/Output
  Formulas and customized Rate Tables to eliminate
  unnecessary Plan Elements/Plans
• Utilize the Bonus type of plan element. This
  may require assistance from IT technical staff to
  create some custom views, but this will certainly
  reduce the data growth

12
Presenters

• Paula Harris, Business Operations Analyst
• Functional analyst specializing in Oracle
  Incentive Compensation and Advanced Pricing
  implementation and maintenance
• Email pshtech_at_yahoo.com
• Mobile [phone]
• Kathy Lancy, Senior Business Analyst
• Analyst experienced in Oracle Incentive
  Compensation and Accounts Receivable
  implementation and technical support
• Email katherinelancy_at_yahoo.com
• Mobile [phone]
• Chetan Rischie, Independent Consultant
• Specializing in architecting and managing Oracle
  ERP/CRM implementations
• Email rischiec_at_yahoo.com
• Mobile [phone]