HR Value, LLC

with the click of a mouse

Delivering exceptional results

Automating Sales Commissions – a case study

Roy FarrellRoyFarrell@4hrv.comwww.4hrv.com(614) 266-5926

Who we are, What we do

The Information ImperativeThe Information Imperative

The HR Value Point of View - An Alternative IT Strategy

Fool proof Workflow

Example of developed Commission tool

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The Process –Populate the tools

Discussion OutlineCase Study – Automating Sales Commissions

How we do it – Excel with VBA

Tool Development & Next Steps

HR Value Who We AreHR Value, LLC provides unbiased advice and counsel to management and boards of directors regarding executive and incentive compensation, sales compensation, talent and performance management. We have distinctive capabilities in aligning talent and rewards with the real drivers of the business. We help companies increase the return on their Human Capital.

We have long realized that clients want innovative rewards programs, but they have difficulty administering complex designs. The unfortunate reality is that the client is tied to the capabilities and functionality of systems that deliver a standard process, and their systems drive rewards programs. We believe there is no competitive advantage in doing things just like the competition.

We show clients that with just a little effort, they can have the most powerful set of customized, on-demand software tools that their leadership team will find indispensable in running and planning the business.

All at fraction of the cost of alternatives.

We work in the U.S. and in Europe with The Reward Practice.

We help companies with custom solutions in two key areas:

• Business Analytics and Information management

• Automation of time intensive processes

We take the most complex process and give clients “click of the mouse” ease, all at a cost that is a fraction of system modifications or additional software.

The client can easily access data from multiple systems, HRIS, payroll or outsourced solutions, and refresh that data at any time. They can access even the most complex analysis, reports and charts. All with tools that are sitting- largely underutilized - on their desktops.

We add value, and save our clients time and money

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HR Value What We Do

This is not a sales pitch. We want to introduce you to an Excel you may not know exists, by using a very specific example. We provide help in these techniques, but everything discussed here is available on your desktop.

The Boardroom can be a lonely place, especially if you’re from HR……

Sorry HR - the meeting was yesterday

A seat at the table…

“I want to pay for market potential, product mix and growth rates by product. But the data are all in different systems”

“We know who is paid the most, but I have no clue if they are our best sales people.”

“We need to change plans more frequently to reflect market conditions, but IT takes 3 months just to write a proposal!”

“I get reports two months late. I lose the opportunity to take action!”

“So HR – can you deliver? This is what we expect from you……

“We seem to reward budgeting prowess rather than effective selling.”

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What we expect from Rewards Professionals and HR:

Confidence with big ticket issues – if you can give the

business a real boost, you belong in this room.

Demonstrate mastery of the numbers – and not just headcount.

Help us hammer down costs and ramp up payroll productivity.

Give us tools to use, not rules to follow.

Help us to see our people in a new perspective– a value

perspective!

Give us practical ways of finding and keeping talent.

Help us turn data into actionable information

Don’t let process slow down effective decision making

Create incentives that give us a competitive advantage!

Memo to HR Team: Great challenge:

– but HOW do deliver all this ??

What the Business expects…

Reality Check -

You cannot deliver

ANYTHING

without the enabling technology

HR Value Point of View

Technology is the overlooked barrier to successful a Rewards Program.

Even when using the “best” available software, you are tied to the capabilities and functionality of those systems. Modifications are slow and expensive. Add-on packages claim to solve your problems, but you soon discover you simply trade one set of limitations for another, or create information silos that restrict meaningful analysis - all at a considerable expense.

We will show you that you do not accept these technology limitations. You can develop Software Solutions without limits:- Solutions tailored to fit your exact business requirements- Solutions that can change as quickly as your business requirements change

With the software you already own.

We will introduce an alternative HRIS strategy that is better, faster and cheaper.

Every Sales process is large and complex

Charts an actionable growth plan

Matches roles, resources, and process to customer needs

Aligns execution with the growth strategy

Provides information for planning and strategy development

The Revenue RoadmapInsight

Customer Evaluation

Macro Market

Environment

Competitor Performance

Business Performance

Enablement

Sales Strategy

Action PlanSegmentation and Targeting

Value Proposition

Approach to Market

Customer Coverage

Sales Channels

Sales Roles and

Structure

Sales Process

Sales Deployment

Incentive Comp Plans

Recruiting and

Retention

Training and Development

Enabling Technology

High performing organizations plan, operate, and manage around four major competency areas.

INFORMATION

REQUIREMENTS

underlie all of the

the competency

areas.

ENABLIING

TECHNOLOGY

underlies

information

delivery

Compensation tools are often the weakest in the HR suite of tools.

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The unfortunate reality is that core HR technology solutions are built to address the compliance and administration tasks of their profession, with tools that are largely driven by Payroll, Benefits, and record keeping.

It is very difficult to develop robust planning tools or administer multiple approaches with a payroll system.

Add-on packages claim to solve your problems, but you soon discover you simply trade one set of limitations for another, or create information silos that restrict meaningful analysis - all at a considerable expense.

The technology challenge

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You have dedicated applications that don’t talk to each other:• Commissions• Equity programs• Investment and Retirement plans• Other retention arrangements

There are also tasks for which there is no specialized application:• perform an analysis on information• build a financial model• integrate information from multiple sources • automate a business process like report generation

And there is little interest in spending more money on expensive system modifications that cannot demonstrate a positive ROI.

But all these tasks need to get done!

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So your day becomes consumed with paperwork or repetitive spreadsheets.

Let’s face it – technology scares people.

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We all want enabling technology, but few people have the time or inclination to spend the hours necessary to become proficient in the specialized languages necessary to control and use the multiple programs. It is often difficult enough just to learn the report writing language to make sure you get the right data. Line managers especially have little time to learn a system they may use several times a year

Managers want “push the button” simplicity, but this is difficult to achieve, and multiple systems create data silos.

Technology costs are often most frightening of all.

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It is not just the acquisition cost:• new investments in infrastructure• annual maintenance• periodic upgrades• training• additional IT staff required with most software• the need to hire “power users” to your team to work the tool

The five and ten year total costs can be staggering, and it is often difficult to demonstrate a positive return on investment. Few enterprise wide solutions cost less than a million dollars and many end up costing ten million or more.

software solutions without limits at a fraction of the cost

of alternativesNow, imagine…

Spreadsheets provide all the flexibility and you need to administer even the most complex plans, but they can quickly become unwieldy.

You can automate them.

Let us introduce to the Excel you never knew

existed

Think beyond your spreadsheets!- Using Excel with VBA

The bottom line is that you already have powerful software and a network available for employees to use, so the investment in software and computer infrastructure has already been made. We will show you how to improve your use of MS Office capabilities, to its fullest extent possible.

Excel with VBA – Visual Basic for Applications - can create sales and software solutions without limits.

Technology is complicated by designDataSources

Extract,

Transform

and Load

ETL Architecture

Enterprise Data Warehouse

Staging Area

Operational Data Store

Data Warehouse

Virtual Data

Massive Parallel

Services – Web/Data

Messaging

Real Time Analytics

Virtual Reporting/Analytics

Virtual Dashboard

Virtual Applications

PORTAL

Legacy

Sales

Purchase

Orders

Inventory

Flat File

Relational

XML

Internal

External

It doesn’t have to be this complicated

It doesn’t have to be this complicated

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Legacy

Excel and VBA provide the capability to rapidly integrate information from different applications, without a costly infrastructure.Excel and VBA integration

features come pre-built, so using Excel as an information integration platform avoids the time and cost of developing applications from scratch that perform the same tasks.

Excel and other Microsoft Office products utilize a programming language called Visual Basic for Applications or VBA.

Take the hours and cost out of any process. Automatically: • Import data from multiple systems, and easily refresh data • Verify billing accuracy and streamline billing process • Accelerate payments: match billing with payments and receipts• Calculate all sales commissions • Integrate data from inventory, sales and Purchase Order systems• Automatically create sales reports, with email delivery• Print Sales Contracts or Performance Appraisals• Monitor and analyze effectiveness of any business process

Sales

Purchase

Orders

Inventory

Flat File

Relational

XML

Internal

External

Excel and VBA provide the capability to rapidly integrate information from different applications, without costly infrastructure.

Unfortunately, many of Excel's features are still largely unknown or dismissed prematurely

DataSources

It is easy to import data from multiple sources, analyze that information, and refresh the data as often as you want.

Excel comes standard with tools, that can be rapidly configured to provide task support in areas such as:

Excel to the rescue!

Microsoft Excel fills the niche of being able to perform complex business analysis tasks or automate business tasks rapidly and cost effectively

Excel is one of the most powerful, flexible packages on the market today

Excel has tremendous capabilities that can help streamline your business tasks

Unfortunately, many of Excel's features are still largely unknown or dismissed prematurely

Information analysis, organization and processing

Report and form generation

Creating and combining planning tools

Import and combine data from multiple databases

Integrate information from different applications

Charting and Modeling

Budgeting and Planning

“What if” scenarios

Accruals

And anything else you can imagine

How you do it

Excel and VBA gives you:1. Graphic User “click of the mouse” interface2. Flawless Workflow3. “Foolproof” process4. Tools maintained by non-technical users

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1. GUI Design – Intuitive Graphic Interfaces

1. Excel has built-in capabilities, which allow elaborate graphical user interfaces (GUI’s) to be developed.

2. The Excel controls used to develop these interfaces are easy to employ, basically just draw them and set a couple of options.

3. Because GUI’s are so easy to construct in Excel, Excel can be utilized very effectively and cheaply as a pre/post information processor for business data

4. And most important, they can be used to build a flawless and foolproof workflow.

2. Workflow managed by Menu functions, tailored to your requirements– no

compromises “Click of the Mouse” ease

Tool Creation is fully Automated

Consolidate data – no “Cut & Paste”

Import new data from multiple sources

Reports dynamically updated

Unlimited Planning and Budgeting functionality

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3. Workflow creates a “foolproof” process

Users cannot change tools:

Separate User and Admin menus

Editing functions disabled

Core data cannot be changed

Calculations cannot be altered

Documents cannot be altered

Database updated automatically

Reports automatically updatedWorkflow managed by Menu functions, tailored to your requirements– no compromises. No errors.

VBA automates repetitive, time intensive tasks, and gives you “click of the mouse” ease.

4. “Non-Technical” users can update tables, without IT or “power user” intervention

Administrator can change all plan parameters without IT support or programming

The Commission tool for a Brightree client

The OrganizationA privately held company specializes in the supply of durable medical equipment to patients through surgical centers and hospitals across the United States. 

They operate through regional sales organizations throughout the USA, which they call Distributor Principals (DP). Each DP has its own sales territory and hires its own salespeople.

These Sales Reps handle all the billing paperwork and inventory to minimize or eliminate any time needed by the surgical center staff.  

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NOTE: All names in the examples are completely fictitious

A very complicated processThe reporting and commissions complexity comes from a variety of factors:• Some surgical centers may have more than one Sales Rep, but their

software allows only one Rep per referral• Some Reps distribute only certain products from a referral, but either Reps

name could be on the paperwork from the medical facility• Sometimes an independent Rep will work for both the regional sales

organization and the corporate organization for different products• There are Multiple Customer types – DVT, Billing, Corporate, Urology – but

these are not tracked in the Brightree system and are added manually• Multiple commission rates, and many “guaranteed” commission rates• Need to track Principals and States for reporting, not tracked Brightree • New facilities added monthly, and Reps change frequently• Data inconsistency in Brightree system, and missing data

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A very time intensive processSo the accounting staff was forced to use some very large and cumbersome spreadsheets to manipulate the sales transactions to pay their sales commissions correctly.

They used macros, multiple sorts, cut and paste, and detailed notes to validate the marketing rep for the referral.

After they got the sales reps straightened out, they had to apply their commission and multiple exceptions with commissions rates to the sales.

It took a lot of staff time. About two weeks a month.

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We fixed it.Their commission process that took weeks to complete every month was turned into a half hour exercise. They can now send out sales reports weekly, instead of monthly. The process is being turned over to a clerk, instead of more senior accounting staff.

In building the tool:• Brightree remains the system of record – no changes needed or

required to system• We used existing reports - Doctor’s file, Facilities report, AR file• We delivered a completely custom solution, developed to the

client’s exact specifications• Workflow to support the client process• No change to current procedures, although process re-engineering

is easily achieved if so desired

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The New Process

New process has four steps:1. Import Brightree reports – Doctor, Facility, AR2. Make changes, if necessary, to

a) marketing reps tableb) Commissions table

3. Process data, i.e. click a button4. Run Reports, i.e. click a button

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Import Brightree Files

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Tool compares the Doctors file to the previous Doctor’s file stored in the system, and shows changed reps. User can accept or reject changes.

Tool reads the facility report to check for changed reps by referral.

After the tool reads these two files, tool checks for changed reps by referral as stored in the tool. User can accept or reject changes.

Rask Surgical Hospital

Christiansen, Thomas

Bangsbro, Klaus

Sørensen, Ann

Sørensen, Ann

Marketing Rep Table

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Tool maintains the “validated” marketing rep for each referral. This includes:• Principal• State• “Who gets paid”• Customer type• Referral type – Doctor or facility• The marketing rep for the referral, subject to exceptions

Rask Surgical Hospital

Christiansen, Thomas

Bangsbro, Klaus

Sørensen, Ann

Sørensen, AnnAll fields in table are completely editable by the user

Users Manage any Exceptions

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Referrals with multiple Reps( Brightree allows only one rep per Referral)

Reps without certain items (Some Reps work for both Corporate and Principals, and depending on the product sold it gets credited differently for commissions)

Adjust Commission rates

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User can make any changes to commission rates at any time in the process.

User can assign standard or guaranteed rates.

Even the most complex commission arrangements can be automated – build exceptions down to the individual or item level, or items by individual.

All automatically applied during the calculation process.

User can add items or change rates. The tool detects and notifies the user if a “new” item is detected in the AR file.

Unlimited Flexibility

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URO commissions have a monthly threshold to hit before commissions are paid.

There is unlimited flexibility that be used to handle even the most complex commission arrangements.

Tool prepares the data for processing commissions

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Tool then reads the AR file. If the tool finds new reps, the tool asks the user to validate the Marketing RepAfter new are reps validated, the Tool reads the AR file again and this time:- Corrects data problems (eg, extra spaces in record) - Processes Marketing Reps against any exceptions- Adds up all write-offs- Assigns Principal, State, Customer Type- Creates and saves a new “Revised” AR file

This is what previously took much staff time, using lookups, sorts of data, cut and paste, copying formulas, and running macros.

The tool calculates summary statistics to test and validate the data, shows missing information, and shows the user if there are new reps, new doctors or referrals, new product items and new facilities.

All reporting completely automated

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The tool creates a “Revised” AR file that is used to calculate• weekly sales reports• monthly reports• all commissions & reports

The user can also modify the format of all reports

Tool Performance

1. Reads and processes 80,000 AR file records in about 12 minutes

2. Creates all 31 commission reports, and summary commission report in about three minutes

3. Creates all month end reports in about two minutes

4. Creates all weekly sales reports in three minutes

Tool Development Process

1. Half-day planning meeting

2. Present detailed workflow and project plan

3. Tool development – 3 to 8 weeks

4. Acceptance testing – one week

5. Final tool delivered

What other things you can you do?1. Compensation planning tools – merit, incentives, equity

a) Automatically create thousands of tools, with email deliveryb) Automatically combine tools through the processc) Create the most complex reports, no “cut and paste”d) Create confirmation letters

2. Integrate Performance Management with Incentives3. Eliminate Paper 4. Create Sales Visualization reports5. Automate Sales Commissions6. Automate all reporting7. Integrate Sales, Inventory and Purchasing information 8. Create Sales productivity and profitability reports9. Build a Global Mobility, or Benefits “Open Enrollment” Calculator10. Build interactive Total Rewards statements

And anything else you can imagine!

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Eliminate Paper

All reports1,500 Equity agreements, previously

created in duplicate and signed

Electronic copies sent to recipient and the Compensation group

Delivered by email directly to the recipient, or HR

Any other Paper reports:

- Parsed for their business

- By email

- As often as you want or need the data

Data Visualization delivered with “click of the mouse” ease.

Previous report from SAP system delivered sales data, but Sales Managers had to “Cut & Paste” reports to see total team and salesperson results.

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Data Visualization delivered with “click of the mouse” ease.

Same report converted into a report, summarizing all products, with graphic

displays.

Information is displayed when you click anywhere in

the customer or salesperson row.

Reports parsed by sales manager, with

email distribution

Salary, Incentive and Equity planning done to your exact specifications

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This company wanted separate spending recommendations and summaries by Technical and Support functions

Integrated Performance Rankings and Incentive Planning

Snapshot of other data:• Retention plans• Pension plans• Benchmark• Perquisites• Other allowances

Anything you want to show

VBA allows construction of sophisticated business tools in Excel

Need to understand:

The basic principles of the VBA language.

The concept of a VBA project.

The concept of a VBA procedure.

How to manage and use VBA modules that store VBA code

The basic operation of the VBA Editor

The purpose of presenting these concepts is not to turn business professionals into full time software developers. The opposite is the case. The main reason for a business professional to use Excel and its capabilities are because they're pre-built.

Enabling Technology

• Automation of your compensation process• Breaks through “Data Silos” in the organization• Integrates all the aspects of the rewards process • A competitive advantage through data analytics• Allows quick changes to pay plans

The Value Proposition for Compensation Automation

Impact

• Give Management the information they need to manage customers, product and people

• Drive profitable sales • Retain the best Talent• Ability to understand value

Cost

• Reduce I.T.& administration expense• Eliminate software expenditures, annual

maintenance, per-user fees• Automate time intensive activities• Improve accuracy and eliminate errors

Too good to be true?

We introduced you to a powerful tool sitting on your computer, one that is largely underutilized. Organizations that fail to deliver timely data and powerful diagnostic capabilities will not maximize Rewards effectiveness.

It could be part of a Technology strategy that uses the best of technology – keep your HRIS and other systems for their core functions, and the powerful functionality of Excel and VBA for the good stuff you need but don’t have.

A good place to start is to identify the pain points. Listen to the questions being asked by the business in terms of cohesive, centrally available and reliable information. This information is at the core of implementing an enterprise solution. A relatively easy first project could be drawing data from a database and automating a report. Your first project should utilize an experienced VBA programmer. But give it a try. Then let your imagination run wild. You won’t be disappointed.

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HR Value, LLCwith the click of a mouse

Delivering exceptional results

Roy FarrellRoyFarrell@4hrv.comwww.4hrv.com(614) 266-5926

Too good to be true?

Questions and Discussion