abling the ransforma0on of the ncen0ve ompensa0on xperience

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1 En T I C E abling the ransforma0on of the ncen0ve ompensa0on xperience Greg Peiker, Senior Director Solution Mgmt, Microsoft Corporation Dirk Weber, Principal Solution Mgr, Microsoft Corporation Joe Kaddis, GM Excentive International North America Venice, April 2013

2 EnTICE Slide 2

3 EnTICE - Leading to Business Transformation Objec0ves Plans That Drive Appropriate Sales Ac0vi0es at the Individual Level Aligned Comp & Future Business Strategy Op0mized Opera0onal and Administra0ve Effec0veness Measures Par0cipant IC Experience NSAT IC Plan Understanding IC Plan Mo0va0on Leadership NSAT on IC as a Strategic Asset IC Plan Alignment with Business Unit Goals IC Plan ROI Effec0veness On- 0me & Accurate Payments Opera0ons Cycle Time Metrics IC Opex/Par0cipant Org Transforma0on As- Is Business Insight Transac0onal End State Business Insight Transac0onal Slide 3

4 VIDEO EnTICE Slide 4

5 Managed Service & benefits expected EnTICE Slide 5

6 EnTICE Our 12 month Journey Vendor Consolidation RFP Define IC Model Core vs. Context EMEA Pilot Program Evaluations Vision & Scope Requirements & Processes Build vs. Buy Tool RFP Process Combined Strategy System Integration RFP Slide 6

7 EnTICE Due Diligence " 24 different ICM vendors " 8 month evaluation " 60+ stakeholders " 9 Use Cases " 4 Scenarios/8 Process Areas " Scalability testing " Site Visits ICM Operating Process Model 1.0 Strategy & Planning 1.1 Manage Objectives 1.2 Market & Administer Product 1.3 Plan Channel Coverage & Manage Capacity 1.4 Design Incentive Strategy 1.5 Model Incentive Plans 1.6 Set Targets / Quotas 1.7 Budget Compensation Expenses 2.0 Plan Setup & Implementation 2.1 Define Business Rules 2.2 Create & Change Plans 2.3 Manage Incentive Tech. Change 9.0 Supporting Capabilities 9.1 Manage Stakeholder Relationship 2.4 Communicate Compensation Plans 2.5 Manage Awards & Contests 9.2 Manage Operational Team 3.0 Participant Administration 3.1 Manage Participant Profiles 3.2 Manage Participant Relationships 3.3 Distribute & Manage Targets / Quotas 3.4 Ensure & Manage Compliance 9.3 Manage Business Processes 4.0 Domain Data Management 4.1 Manage Customer Data 4.2 Set up & Manage Reference Data 4.3 Manage Territory Definitions 5.0 Incentive 6.0 Incentive Comp. Processing Comp. Servicing 9.4 Manage Change 5.1 Integrate Transactional Data 5.2 Credit Revenue / Actuals 5.3 Calculate Incentives & Overrides 5.4 Adjust Commissions & Revenue 5.5 Process Awards & Contests 9.5 Manage Operating Calendar 6.1 Respond to Information Requests 6.2 Resolve Disputes 6.3 Process Adjustments 6.4 Provide Self- Service Content & Status 7.0 Payment Processing 7.1 Manage Payment Balances 7.2 Administer Draws / Guarantees 7.3 Process Payments 7.4 Account for Incentives in GL 9.6 Maintain Applications 8.0 Reporting & Analytics 8.1 Report on Sales Performance 8.2 Report on Operational Metrics 8.3 Provide Management Reports 8.4 Provide Business Perf. Dashboard 8.5 Provide Ad- Hoc Reporting 8.6 Adhere to Audit Requirements 8.7 Extract To Downstream Systems 9.7 Develop Applications Algorithm Parameters All Quotas and Actuals to be calculated as Cumulative Annual except for BOS Attach which is calculated as Absolute Full Year. Payout is Quarterly Transition Allowance is set at 60 days. Transition Allowance periods are set at 100% Payout, until final payment where it is set at 100% Payout, or the Calculated Payout, whichever is greater. Paid LOA periods are set at 100% Payout. Terminations take the greater payout of provided from a YTD Rev/YTD Quota or YTD Rev/FY Quota attainments. YTD Rev/YTD Quota Terminations do not include partial final fiscal months. Pay Lines Regular Caps Award Type Caps Cap AA based on Award Type Award Type Cap Q1 Q3 Advance 100% Q4 Payment 300% Termination Involuntary RIF 300% Misconduct/Unsatisfactory Performance 0% Voluntary (YTD Rev/Prorated Quota) 100% (YTD Rev/Full Year Quota) 300% Transfer 300% Months on Quota Cap Cap AA based on Months on Quota <= 1 Month 100% > 1 Month <= 2 Months 200% > 2 Months No cap Tenure Cap Cap AA/OSA based on days on incentive plan < 60 days 0% >= 60 days No cap PPA Cap Cap AA/OSA based on PPA PPA not signed 0% PPA signed No cap Payout Calculation Payment Calculation SMSG Version 1.0 Pay Line 3 (Green): Accelerator Calculation (Accelerated Attainment) = TWA% or TSA% within the range * Multiplier Range Multiplier RBI at Threshold < 75% >= 75% < 100% % >= 100% < 130% >= 130% Example: TWA%=120% AA= 37.5% x (100%-75%) x (120%-100%) =37.5% x 25% x 20% =37.5% % + 134% =234% RBI Payout% = Minimum (Capped Accelerated Attainment, Accelerated Attainment) FY12 RBI Split by RevMap Apply these weightings to non-cbi Incentive Target RBI 60% BOS/Windows Share 40% - Default RBI split if not otherwise overridden RBI Splits are specified by RevMap in the following file: BOS Attach Rates Example Revmap : Non-CBI Incentive Target = $20k RBI Payout = $16k = 80% of $20k OS Payout = $ 4k = 20% of $20k Calculate Attainment Measures Determine Pay Line Pay Line 2 (Yellow): Accelerator Calculation (Accelerated Attainment) = TWA% or TSA% within the range * Multiplier Range Multiplier RBI at Threshold < 75% >= 75% < 100% % >= 100% < 130% >= 130% Example:TWA%=120% AA= 37.5% x (100%-75%) x (120%-100%) =37.5% x 25% x 20% =37.5% % + 80% =180% Product Group 1 (PG1) PG1 Target : PG1 Actuals PG1 Weight Optional Target & Actuals must be positive. Target must be non-zero. Determine Pay Line Accelerator % of PGs Attain at least 100% then Pay Line 3 (Green) 2. 66% of PGs Attain at least 100% then Pay Line 2 (Yellow) 3. 50% of PGs Attain at least 100% then Pay Line 1 (Red) 4. 33% of PGs Attain at least 100% then Pay Line 1 (Red) 5. 0% of PGs Attain is at least 100% then Pay Line 1 (Red) Pay Line 1 (Red): Accelerator Calculation (Accelerated Attainment) = TWA% or TSA% within the range * Multiplier Range Multiplier RBI at Threshold < 75% >= 75% < 100% % >= 100% < 130% >= 130% Example: TWA%=120% AA= 37.5% x (100%-75%) x (120%-100%) =37.5% x 25% x 20% =37.5% % + 30% =130% OS Payout% = Minimum (Capped OS Accelerated Attainment, OS Accelerated Attainment) Product Group 2 (PG2) PG2 Target : PG2 Actuals PG2 Weight Optional Target & Actuals must be positive. Target must be non-zero. PGx Attainment PGx Actuals/PGx Targets If Weighted RevMap: PG Weighted Attainment (PGxWA%) PGx Attainment x PGx Weight Total Weighted Attainment (TWA%) Sum of PGx Weighted Attainment If Nonweighted RevMap: Total Straight Attainment (TSA%) Sum of PGx Actuals/Sum of PG Targets OS: Payline 1 (Accelerated Attainment) = OSA% within the range * Multiplier Multiplier OS payment Range at Threshold < 97.5% >= 97.5% <=100% > 100% <= 120% > 120% Example: OSA=109% OSAA= 40.0 x (100%-97.5%) x (109%-100%) = (40.0 x 2.5%) + (10.0 x 9%) = 100% + 90% = 190% Product Group 3 (PG3) PG3 Target : PG3 Actuals PG3 Weight Optional Target & Actuals must be positive. Target must be non-zero. BOS Attach BOS Target : BOS Actuals Optional Target & Actuals must be positive. Target must be non-zero. Determine OS Pay Line Accelerator 1. Target >= 85% then OS Payline 1 (Blue) 2. OS Payline 2 (Orange) OS: Payline 2 (Accelerated Attainment) = OSA% within the range * Multiplier Multiplier OS payment Range at Threshold < 95% >= 95% <=100% > 100% <= 120% > 120% Example: OSA=109% OSAA= 20.0 x (100%-95.0%) x (109%-100%) = (20.0 x 5.0%) + (10.0 x 9%) = 100% + 90% = 190% OS Attainment (OSA%) IF Actuals >= Targets: 1 + (Actuals - Targets)/(1 - Targets) IF Actuals < Targets: Actuals/Targets OS Award Type Caps Cap OSA based on Award Type Type Type Cap Q1 Q3 Advance 100% Q4 Payment 300% Termination Involuntary RIF 300% Misconduct/Unsatisfactory Performance 0% Voluntary (YTD Rev/Prorated Quota) 100% (YTD Rev/Full Year Quota) 300% Transfer 300% Months on Quota Cap Cap OSA based on Months on Quota <= 1 Month 100% > 1 Month No cap Windows Share WS Target : WS Actuals Example (No TA or LOA): RBI Payout% = 234% : RBI Payment = RBI Payout% x RBI Payout = 234% x $14k = $32,760 OS Payout% = 190% : OS Payment = OS Payout% x OS Payout = 190% x $6k = $11,400 Total Payment = $32,760 + $11,400 = $44,160 Optional Target & Actuals must be positive. Target must be non-zero. Specialty Caps Pay Line Graphs Slide 7

8 Partners " Greg Peiker, Director Solution Mgmt, Microsoft Corporation " Joe Kaddis, GM Excentive International North America Slide 8

9 9 Market Dev Funds/ Co-op Rebates and Discounts 1M+ Pay for Activation/Placement Revenue Share Sell Fee Subscriptions Joint Sell Slide 9

10 Paradigm Shift ü Simulate, take action and then change and/or refine Ops and Support business users are able to configure Agility and Time to Value EMPOWER PARTNERS! Slide 10

11 Business Process Context for Evaluation Usability, agility, flexibility and total cost of ownership Slide 11

12 Key Requirements " Analyze all the payees on a single deal " Insight into partners that drive or tax the business " Separate design, accruals, earnings and payments " Empower partners with analytics and simulations " Simulate, take action and then change and/or refine Slide 12

13 Slide 13

14 En abling the T ransforma0on of the I ncen0ve C ompensa0on E xperience Questions?

15 Appendix Slide 15

16 En abling the T ransforma0on of the I ncen0ve C ompensa0on E xperience Greg Peiker, Senior Director Solution Mgmt, Microsoft Corporation Dirk Weber, Principal Solution Mgr, Microsoft Corporation Joe Kaddis, GM Excentive International North America Venice, April 2013

17 Slide 17

18 Sales Bill of Rights ü Accurate view of incentives- payments/ accruals ü Ability to dispute prior to payments ü Early view of earning potential and forecast ü Ability to simulate ü Easy analytics ü Minimal internal support required ü Strategic & informed sales management Slide 18