One of the most impactful ways of automating an incentive compensation process is something people often forget, or assume cannot be automated. Some customers refer to this as pre-processing or territory management or payment rules or book of business or simply my biggest HEADACHE. Most customers manage the process manually or with highly custom, hard-coded jobs maintained by an IT team. At Oracle, we call this process sales crediting and we have found a way to solve this problem.
The concept of sales crediting refers to the process of determining who gets credit for a certain event. In the context of a sales organization, an example would be: after an order is booked, the sales rep who sold the order gets credit for the sale. In some cases, this is a very straightforward process. However, in the reality of complex organizations today, often times the answer to “who gets credit?” is not so straightforward. As an example, a current customer compensates, on average, nine individuals on a single transaction. They have inside sales reps, field reps, sales managers, account executives, product specialists, technical specialists, industry experts, project leaders, etc. that often work together to close a single deal. How do we know each of them should receive credit? And how much credit? Customers like this utilize Oracle’s unique capabilities with the Incentive Compensation solution to manage this process in an automated fashion.
Within Oracle’s Incentive Compensation solution, we have a robust crediting engine that automates the process of managing crediting rules. This engine is unique to our solution and a concept our customers are leveraging more and more. Our solution also includes an intuitively designed user interface that gives customers the ability to manage all of their crediting rules in a simple, easy to manage hierarchy. There is great flexibility in how customers can define their rules in order to accommodate extensive complexity.
The incentive compensation process often starts with an anonymous transaction, meaning we cannot identify credit receivers (individuals who earn credit) from the data contained on the transaction. As an example, we get an order transaction that contains the following information: Order Number: 123, Revenue: $50,000, Customer: ABC, Inc., Date of Sale: 4/1/2015, Product Sold: Red Widgets. We do not know who sold the order or who should ultimately receive credit. However, there are business rules in place for this. Let say John Smith is the account owner of ABC, Inc. and every time an order is booked for that account, he gets credit. Additionally, so does his boss and his inside sales counterpart. Our solution will take in this transaction and process it through the defined business credit rules and determine all three individuals should receive credit.
In modern, complex organizations, these rules and definitions get exponentially complicated. The process of mana
ging them manually is arduous and costly. One of our most complex customers compensates an average 42 resources per transaction and worked hand in hand with Oracle to implement our sales crediting technology. This customer had a $15M spend on processes related to variable compensation and it identified managing sales crediting as two-thirds of that spend. Once they implemented Oracle’s solution, they were able to cut their administrative costs in half.
Oracle’s unique solution to this problem is helping customers across industries cut costs and better align their sales crediting rules and incentive programs with their organizational goals and objectives.