• March 1, 2006
  • By Marshall Lager, founder and managing principal, Third Idea Consulting; contributor, CRM magazine

Compensation Problems? Please Hold for Callidus

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Ask a handful of salespeople what they hate about their jobs, and they'll all list one thing in common: getting their actual commissions to match what they expect to receive. Payroll has a similar headache in trying to get commission checks to salespeople in a timely manner, and resolving the inevitable disputes when figures don't match. This is true in any industry that has incentives or commissions, from local furniture stores to national telecommunications firms like Sprint.

Jason Spacek, national sales staff manager for Sprint's local consumer solutions division, recalls the situation he faced when his unit was doing it the wrong way. "Back in September 2003, we were sitting on a homegrown compensation system that had clearly reached the end of its life," Spacek says. "The system couldn't keep up with fast-paced business changes, and failed to give us the flexibility and data we needed to make informed compensation decisions." In addition, the system was not user-friendly, nor did it provide the pay-for-performance (PFP) employees in Spacek's unit with an adequate amount of detail. Even worse, Spacek says, "The data itself could not be certified 100 percent accurate at all times, opening the possibility for under- or overpayment scenarios."

When you're dealing with a business unit that serves 4.5 million households across 18 states, sales compensation isn't a small problem. That's what Callidus Software faced with implementing its TrueComp solution for Sprint. Richard Furino, vice president of client services for Callidus, recalls the challenge of getting the job done. "Sprint needed a robust, secure, and maintainable solution to calculate variable compensation and distribute payments to its 4,000 representatives," Furino says.

He mentions the usual implementation speed bumps, including changes to scope and requirements, and steadily increasing pressure from both the business and user communities for an on-time rollout. "Additionally, because of Sprint's unique and complex preprocessing requirements for all commissionable transactions, we were challenged by the combination of very large data volumes (up to 2.5 million commission credits per month), a relatively short available batch window, and the need to process data on a nightly basis."

According to Spacek, the implementation took 16 months, including some time running parallel with the original system. "Overall, the process went very smoothly and we have now been operational for 26 months and counting," he notes, listing a series of business improvements. Chief among them is the vast improvement in conflict resolution. "We've cut our time to resolve a dispute, from the time the rep initiates it to when it is approved or declined, from 60 days to just six days," Spacek says. "In some cases we can get it resolved the same day." Sprint is now able to deliver timely and accurate compensation information to all of its associates.

Sprint has realized several other real-time benefits. "The sales team now has an updated daily view of their sales and PFP detail," Spacek says. The Callidus system also allows Sprint to generate sales reports in a number of different formats in real time, which lets the company manage the business "like never before," Spacek says. "We are also able to implement compensation changes and incentives quickly to match the needs of our business." Sprint is a company that handles phone calls, but its own call to Callidus Software may have been the most valuable call of all.

The Payoff

Switching to Callidus TrueComp enabled Sprint to:

  • complete 26 consecutive payroll submissions successfully and on time;
  • resolve conflicts the same day or week instead of two months later;
  • implement incentives and program changes as quickly as needed; and
  • acquire real-time insight for sales performance.

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