Incentives & Commission Management

Incentives & Commission Management

When structured and implemented correctly, good incentive plans enable companies to attract, motivate, and retain their best sales managers and representatives. Companies can increase revenue and improve profitability by employing incentive compensation strategically and aligning individual sales professionals’ goals with those of the organization.

 

mySAP CRM provides incentives and commissions management features so organizations can develop, implement, and manage compensation plans easily and effectively. Sales professionals can also track current performance levels and measure the potential compensation of sales in the pipeline.
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Business Benefits
Increased Revenue: Companies can increase revenue and improve profitability by employing incentive compensation strategically and by aligning individual sales professionals’ goals with those of the organization
Accurate Commission Payouts. The finance organization can better manage and predict commission expense, improve reporting timeliness and accuracy, while avoiding over or underpayments to sales
Improved visibility into the current performance and income of its sales people. It also has greater flexibility to change compensation plans as business conditions demand, using “what if” modeling capabilities that result in fact-based decisions with knowledge of the associated commission expense implications. With more sales energy directed towards selling, sales management can focus on future income opportunities vs. the accounting of completed deals
They will look at the quota potential of their pipeline to determine their ability to achieve both performance and income goals. Paying higher commissions on higher-margin products can now be highlighted. As sales representatives choose from different potential products, they can see the increasing commissions associated with higher-margin products as they are selected, and this will drive them to sell those products. The impact of the compensation plan becomes part of each solution, thereby increasing its ability to influence or control sales behavior
Customer
Vendor
Express interest in goods or services
Accept proposal
Pay invoice
Maintain incentive plan
Create sales opportunity
Create proposal and evaluate commission potential
Offer proposal to customer
Create sales contract/order
Calculate & award commission to sales representative
Process delivery & invoice for goods
Resale and Claim Message
Calculate & award commission to sales representative
Review incentive results
.
Business Benefits
Many enterprises are struggling with adoption and usage of CRM/OMSs by field sales organizations. Insufficient value for sales representatives is a frequently cited source of sales dissatisfaction with these systems. With the inclusion of ICM in mySAP CRM Sales value for sales becomes substantially increased. CRM now fulfills two important functions for sales representatives: it meets the sales management requirement for business status reporting, and it provides value to the sales representative as an income and performance-planning tool to prioritize their opportunities
Improved Pipeline and Opportunity Visibility. When ICM is integrated into a CRM sales implementation, sales people must leverage the opportunity management capabilities in order see their payout. By using the system, sales management will reap the benefits as they receive an unmatched, comprehensive view into every opportunities history, milestones, and key decision makers
Laser focus on the most profitable opportunities: When ICM is tightly integrated into mySAP CRM sales opportunity management capabilities sales representatives will be able to prioritize their strategies based on the commission or quota impact of each opportunity. They will look at the quota potential of their pipeline to determine their ability to achieve both performance and income goals
Increased Productivity: With 100% accuracy of commission payouts sales people spend less time reviewing and reconciliation their parallel order logs. The compensation plan becomes more effective in driving sales behaviors while building trust and enabling more selling time
 
Incentives & Commission Management

This scenario addresses the following business challenges:

 

  1. Historically, the tracking and reporting of transactions and commissions has been accomplished through a collection of manual spreadsheets or homegrown applications.  As these systems are notoriously inaccurate and difficult to understand, sales people are forced to create and maintain parallel order logs to ensure that they are paid correctly.  This reconciliation process consumes valuable selling time and creates an environment of mistrust.
  2. Rapidly changing and dynamic business environment that requires the best and brightest sales force to continue to drive revenues and ensure profitability. To retain top performers, organizations must ensure that commissions are paid correctly. 
  3. To ensure profitability and revenue growth, organizations must also ensure that commission structures are closely aligned with corporate goals and strategies.    

 

The next section describes the scenario in more detail:

 

By leveraging the ICM scenario, a corporation is able to maintain alignment between corporate strategy and individual goals, retain valuable sales talent, reduce cost-of-sales (improved productivity, reduce commission payout errors and administrative cost), and rapidly integrate acquired sales teams.

You maintain your incentive plan with the scenario.

As soon as your customer expresses interest in purchasing goods or services,

You create a sales opportunity using Opportunity Management.

As well, you create a proposal and evaluate the commission potential. The sales representative determines what items to include in a sales proposal and estimates the commission potential of the transaction. Using ICM Commission Simulation iView, he or she calculates the commission potential of the opportunity.

Your sales representative offers the proposal to the customer.

After accepting the proposal, the customer signs the order or contract.

Your sales representative books the sales order or contract. Sales orders or contracts can be maintained in CRM Mobile Sales, for example. Booking can trigger commission payment.

Commissions can be awarded to sales representatives when the order or contract is booked. This is done automatically with CRM ICM.  

An invoice is generated and sent for the items that have been delivered to the customer. Invoicing can trigger commission payment.

After getting the invoice, the customer pays it. 

You can send your customer a resale and claim message.

Commissions can be awarded at other stages of the sales cycle such as shipped and booked.

It is always possible to review your incentive results.

 

(*This scenario is written from the perspective of you as a Vendor)

 

This business scenario is supported as of SAP CRM Release 3.0.