clearion software (1)

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Clearion Software

-- Group 7


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Headcount & QuotaAllocations

Comparing all regions and expecting them to achieve the samelevels of revenue per unit is not sensible; and its not practical.

Federal Region, which concerns its activities with mostly theGovt will tend to have longer sales cycles and complications like

licensing. (Unlike East & West where they had quick and nimblehigh technology enterprise wide clients)

Lead to dissatisfaction

However; Since East & West typically dealt with the samecustomers; they could have similar targets.


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RankingRANK

PERSON REASON

1 Cheng No major changesmade. The %tage of

headcount allocated isalso much greater thanthe targeted growthrate.

2 Chapas Target reduced &headcount increased

3 Jacoby

4 Dreyer A drastic change in theway inside sales force isallocated. Difficultiescould be faced.

5 Hall Uses a lot of sharedresources which will becounted from now on.Also division into a newterritory; will face some

resistance to that


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Can Jacobys model for allocating headcount and quotasequitably account for realistic new hire productivity levels and

still accelerate hiring times?


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Profitable InvestmentRegion H1

targets(mn)

NewHeadcount

Additionalquota

allocated(mn)

Incrementalrevenue per newheadcount unit

East 38.2 20 6.2 0.31

West 45.1 28 5.5 0.196

Latin America 2.8 5 0.3 0.06

Federal 6.3 8 -0.7 -


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East v/s. West

Should be equally profitable as the customer profile is moreor less the same

As per new allocation

The revenue per unit for east region should be 0.19

To be as profitable as west east must achieve 41.8 mn revenuesinstead of 38.2 mn. with headcount of 220 units

Or with revenues fixed at 38.2 mn, the headcount should be reduced to202.

East needs to improve on revenue per unit to be as profitable as west


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Rank Analysis

1. Chapas (FederalRegion)

-In H2 2005 revenue per unit was 0.11-

even with 20% lesser revenue per unit, targets willbe achieved (accounted for new hires)

2. Hall (westregion)

-To achieve targets will have to achieve 0.19 RPU- vast experience , previous track record favors him

3. Cheng (LatinAmerica)

-In H2 2005 RPU was 0.13-

can achieve targets with 10 % lesser RPU ascompared with last year but large % of new hires willbring down RPU

4. Garton (East)

-In H2 2005 RPU was 0.16- to achieve target RPU should be increase to 0.17(with 20 new hires this will be difficult)

- engaged in Lobbying, gaming etc.

5. Mellisa -

6. Jacoby (VP)

-Depends on achievement of others- East & Latin america are unlikely to achieve quotas

(may be compensated by overachievement by west)


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New-hire Productivity Levels

The new model will definitely accelerate the hiring times

Region H1 2006targets

(mn)

NewHeadcount

TotalHeadcount

Revenues/unit

H2 2005

Revenues/unit

H1 2006(targets)

Expected RPU

for newhires

East 38.2 20 220 0.16 0.17 0.31

West 45.1 28 242 0.19 0.190.19

LatinAmerica

2.8 5 24 0.13 0.12 0.06

Federal 6.3 8 72 0.11 0.09 0Assumption: Existing manpower operates at same levels of revenue per unit New hires productivity is taken to account only for Latin America &Federal


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Designing Quotas Quotas must include 3 parameters

Sales in terms of volume

Activities carried out to achieve sales

Financial aspect (profitability)

Quotas should be judged on profitability

Costs (no. of units) employed to achieve quotas must beconsidered

Employing excess resources to achieve quotas is not sustainablefor long term


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Adjustments in model

The model is too objective

There is no factor accounting for dynamic changes in the market if any

RPU for the new hires must be accounted for in the initial period

Activities carried to achieve sales should be accounted for in someway while designing a quota

In case of federal, since the sales cycle is long

Some other parameter like no. of calls (activity based ) can be used to assessperformance of sales people

Sales people can be compensated basis on yearly sales quota achievements


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Hiring Policy

Advantages of


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Goal-Setting Process

Americas region contributed to


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