The journey to SPM self-sufficiency
A case study on Abbott’s sales compensation success
Industry: Healthcare
Challenge
Making the most out of an SPM investment
The beginning of Abbott’s (formerly St. Jude Medical) sales performance management (SPM) journey was a surprising one. They faced some challenges that, even after they went live with their SPM technology solution, continued to consume valuable time and resources. Abbott partnered with OpenSymmetry’s OS EDGE managed services team to develop a strategy for realizing the long-term vision for a successful and easy-to-maintain SPM system. “Abbott needed to be strategic about where it invested money,” explained Robert Blohm, SVP of Sales and Alliances at OpenSymmetry. “They were looking to OpenSymmetry to help them assess the low-cost/high-value items so they could figure out what to address first.”
After an initial discussion, the OpenSymmetry project team was tasked with finding ways to:
• Reduce the significant time and effort expended on manual procedures
• Eliminate redundant processes
• Help the field make sense of confusing contracts
Though there were many challenges, the goals were clear: Abbott needed solutions that ensured accuracy, reliability, and predictability from its compensation processing. Ultimately, the goal for Abbott was to reach self-sufficiency for the management of their SPM program.
Solution:
The 5 Cs approach
OpenSymmetry utilized its proprietary 5 Cs approach to assess Abbott’s sales compensation program. This unique approach provides OS customers with a comprehensive assessment that identifies opportunities for improvement for any SPM solution. Following are the five areas evaluated by the 5 Cs approach:
1. Collect – Since accurate data is the key to a successful SPM solution, OpenSymmetry works to make sure that the data feeding into the solution is accurate and fully integrated.
2. Credit – Credits must be assigned properly to ensure accurate compensation. Therefore, OpenSymmetry helps validate crediting rules and their parameters so that employees are being paid based on the correct criteria.
3. Calculate – At the heart of every SPM solution is the complex calculations required for generating payments. OpenSymmetry validates and automates the rules that trigger these calculations to ensure employees are being compensated fully and accurately each pay period.
4. Compensate – Sales teams are only motivated if they are compensated competitively and on time. OpenSymmetry helps compare a company’s metrics against others in the industry to assess how it measures up.
5. Communicate – The quality of reports generated by the SPM solution will make or break the system’s usefulness and overall acceptance by the company. OpenSymmetry has a number of reporting products that can help with the communication of company goals to the sales organization.
5 Cs PAVE THE WAY TO RESULTS
By collaborating with OpenSymmetry and utilizing the proven 5 Cs approach, with reliable industry benchmarks, Abbott gained the skills necessary to identify wasteful costs, optimize its analytical capabilities, and become more self-sufficient.
Applying findings from the 5 Cs approach
Upon completion of the 5 Cs assessment, Abbott discovered that it could save both time and money by making the following modifications to its sales compensation program:
• Automating nightly pipeline runs
• Validating data prior to loading it into the compensation system
• Utilizing analytics to identify cost-saving measures
• Optimizing the technology that supports the sales comp reporting program
OpenSymmetry’s 5 Cs assessment confirmed many of the assumptions Abbott held about the problems it faced, while also breaking down larger problems into distinct and addressable issues, which could then be easily prioritized. Furthermore, by using the industry benchmarks, Abbott was able to take a critical look at many of its practices including how it created compensation teams, how compensation teams were spending their time, the efficiency of comp-to-payee ratios, and the number of reports being run each month.
From there, the OpenSymmetry OS EDGE managed services team presented a quarterly action plan that outlined for Abbott solutions that could be implemented in both the short and long term. This was based on Abbott’s most urgent needs and budgetary requirements. Short-term solutions included setting up a test environment and continued testing of various plans. Long-term solutions included the deployment of new technology for business intelligence.
USE OF INDUSTRY BENCHMARKS
Each year, OpenSymmetry conducts a Sales Compensation Administration Survey to gather data and information from hundreds of organizations on the processes, approaches, and technologies used to design and administer sales compensation programs.
Result
Not just monetary savings
Abbott’s long-term project resulted in the following savings:
• Fully automated nightly calculations, eliminating the need to have the vendor run them manually. Approximate savings to Abbott were $120,000 annually.
• Enhanced data validation so that problems are identified before data is loaded into the system. Approximate savings to Abbott were $1,200 – $1,400 per month or the equivalent of one full-time employee working 3-4 days per month exclusively on data validation.
• Deployment of a robust analytics package for the sales team. Detailed results (costs & expenses) generated and displayed at the rep level by leveraging Abbott’s enterprise analytics tool, allowing for high-level decision making on a real-time basis.
• Replacement of the vendor reporting solution with a highly optimized reporting solution. Approximate cost savings to Abbott were $800 – $1,000 per month or the equivalent of one full-time employee focused on resolving reporting issues.
Perhaps most importantly, through OS EDGE managed services Abbott’s compensation team was able to become self-sufficient. Today not only are they better versed in their compensation system, but they now have access to important industry data and internal reports that allow them the competitive advantage of making quicker and better-informed decisions.
If you’re inspired by the Abbott story and would like to help your organization improve the administration of your sales compensation program, OpenSymmetry recommends starting with the following steps:
• Conduct a comprehensive yearly audit of your company’s compensation procedures to identify potential risks and problems.
• Consider an outside, qualified opinion to help articulate the challenges your company faces and provide prioritized recommendations for the execution of the lowest-cost, highest-value solutions.
• Use industry benchmarks, as revealed in industry surveys, to gauge your company’s compensation practices and ensure you’re aligned with best practices.
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ABOUT ABBOTT
Abbott is committed to helping people live their best possible life through the power of health. For more than 125 years, they’ve brought new products and technologies to the world – in nutrition, diagnostics, medical devices and branded generic pharmaceuticals – that create more possibilities for more people at all stages of life. Today, 99,000 of them are working to help people live not just longer, but better, in the more than 150 countries they serve.
FOR MORE INFORMATION ABOUT OS EDGE
To begin your journey to a world-class sales compensation program, contact us at hello@www.opensymmetry.com.
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About Us
OpenSymmetry enables clients to achieve greater operational efficiency and get better sales results. We are a global consulting company specializing in the planning, implementation, and optimization of industry leading technology suppliers of sales performance management solutions.
CONSIDERATIONS WHEN REPLACING YOUR SPM TECHNOLOGY SOLUTION
Understanding the challenges companies face when migrating Sales Performance Management (SPM) technology solutions can be a significant undertaking. This paper is designed to provide high-level guidance to stakeholders who carry this responsibility. As OpenSymmetry has helped many companies evaluate and effectively migrate to new technology solutions, we are sharing seven key areas that we find critical to completing this kind of effort.
1. CURRENT STATE ASSESSMENT & FUTURE STATE PLANNING
A critical initial step before migrating to a new SPM solution is understanding how well your current program is performing across people, processes, and technology. From there you can devise a future state vision for how your SPM program should operate. By understanding both current state gaps and what your future state needs look like, you can effectively begin defining requirements while also clearly articulating success criteria. It’s important to recognize that your previous or initial SPM implementation may not have gathered all necessary processes/requirements, so it’s vital to take a fresh, holistic view in this first step.
2. DATA INTEGRATION
One of the most complex and time-consuming requirements is determining how to best leverage current source data feeds to support the new platform. Within the context of your current state assessment and future state planning, the team should review what their reporting, analytics, and any future state compensation elements needs are to ensure a meaningful inventory of data requirements are defined. SPM solutions vary in terms of how data is gathered, translated, and uploaded into the system. Some solution applications may have a standardized format requiring additional configuration, whereas others may have the ability of data field mapping, which provides additional flexibility. The ability to own the data translation from your source systems to the SPM platform is key. Another focus point is to ensure that you evaluate all manual feeds to incorporate automation, as well as any additional error validation processes.
3. HISTORICAL DATA
Migrating historical data is an often-overlooked requirement when moving from one SPM platform to another. To keep costs down and minimize complexity, clients may want to ID only the data that is needed to ensure ongoing management of comp (e.g. payment history) and then transfer detail-level data into data storage to be referenced at a future date. It is important to consider what historical data is needed for the new system for reference on future payments
4. PROCESS IMPROVEMENT
Each SPM solution may require users to interact with the system in different ways. This area may need additional attention, especially as it has the potential to improve processes currently employed to manage sales compensation. Understanding the impact a new system will have on current processes, as well as those who manage the processes, is critical to ensuring a successful launch and ongoing management of core processes. As an example, two of the leading solutions in the market have very different expectations regarding the skills users need to possess to effectively maintain compensation plans and reports and, in some cases, execute the day-to-day activities. Defining expectations of your staff related to the new technology, prior to the project, will ideally give your organization the necessary time to introduce training that ensures effective ongoing management of the program.
5. WORKFLOW
SPM solutions vary widely in their ability to support automated workflow. As a result, there are significant challenges for sales compensation teams related to an SPM migration. Capabilities can range from templates to existing documentation, levels of routing, and even implementation of a stopgap for a payee to accept plan documentation prior to payout. Within the context of your future state definition, capturing and defining areas where automated workflows can be leveraged is a necessary part of the core requirements. Before a new system is deployed, it is important to map these processes out to drive user adoption, leverage the SPM system as an auditable repository, and minimize email management.
6. REPORTING & ANALYTICS
It is critical to develop a holistic vision of information distribution to the various stakeholders and tools used to deliver this content (i.e. static pages vs. dashboards). Similar to workflows, different vendors have various capabilities related to reporting for the end users. Assessing these capabilities against your business requirements is imperative to the success of the roll-out. For example, some vendors require more robust configurations in the system (e.g. crediting logic) to enable specific analytics capabilities, while some solutions, architected specifically for reporting and analytics, have much more robust capabilities. Another area for consideration is the use of the vendor’s reporting solution against your in-house technology stack. Some solutions make it easy to port data into new environments, which could be a consideration in helping to keep the number of reporting tools requiring management to a minimum.
7. DEPLOYMENT
The implementation of a new solution should be designed to minimize the impact on payees and managers. One of the most critical aspects of your effort is assessing how all stakeholders will be impacted and how to mitigate any disruption. It is important to identify upcoming changes for your sales organization, administrators, and other internal partners with a plan in place to offer the steps needed to ensure the best chances for solution adoption.
The first step when considering a new SPM platform is an assessment of your current program and the development of a future state vision. OpenSymmetry offers a no-cost workshop to help you gain an understanding of how your current SPM program performs against your needs and industry best practices, as well as a readout on current solutions in the market.
Leveraging the OpenSymmetry assessment methodology and knowledge of the leading SPM providers, you will be equipped with:
• A current state analysis scorecard
• The framework for a business case to support change
• Contemporary intel on the SPM market and SPM vendor capabilities
• High-level deployment and license cost estimates