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Contents
Welcome to the Spring edition of Practique Perspective
According to finance and business adviser Grant Thornton’s ‘UK Workplace Productivity Report’, UK companies are missing an opportunity to link performance to pay. Although the majority of companies offer performance-related pay, these incentives are usually delivered as an annual bonus rather than being linked to a specific set of targets.
In today’s business it is now becoming imperative to link rewards directly to productivity; Incentive Compensation Management software is a powerful tool and software such as Practique’s INCA drives behaviour towards improved productivity, delivers growth, enhances enterprise value and fundamentally measures performance directly with against reward . The increasing number of companies which are implementing an ICM solution is a testament to the value it brings to an organisation; not only in attracting, motivating and retaining staff but by driving directing the right sales behaviours. The and the flexibility of a system such as INCA means organisations operating in a fast-paced sales environment can stay one step ahead of the competition.
In the Spring issue of Practique Perspective, Pay & Reward specialist’s Hewitt demonstrates how effectively risk and reward can be measured and our White Paper illustrates the swift return on investment typically associated with ICM as well as the clients who are taking advantage of the this software today.
Enjoy!
Jo Walker
Managing Director
Client Update
Telco sector leads the market in strategic ICM
Analysts Gartner have forecast that 90% of enterprises will focus on using ICM systems in 2008 and in Europe the telco and high tech sectors are the biggest purchasers of third party ICM solutions, accounting for over 40% of the market. This resonates well with Practique, who lead the field in Ttelco demonstrating a deep understanding of the cost saving and performance enhancing benefits which can accrue from enterprise ICM which now has a strong pedigree in the European telco sector and has been extending its reach in this market.
Orange UK, one of the world’s leading telecommunications operators with more than 163million customers on five continents has awardedselected Practique as its preferred supplier status in ICM vendor in Q4 2007. Practique will deploy its enterprise ICM software, INCA to 12,000 UK payees spanning direct, retail and indirect channels in in support of the Orange World Class Sales Performance Management programme, with a phased roll out across Orange’s five separate business divisions in the UK.
Practique has already implemented its INCA software into five separate divisions of BT and due to the ongoing success of these implementations we Practique has have been awarded contracts with BT Global Services and BT Business Services. One of the key factors of determining Practique’s appointment was INCA’s inherent ability to scale in line with BT’s diverse business requirements.
Practique will work with BT Global Services to create a Centre of Excellence which will provide a single commissioning platform to support its global pay plan principle. The contract for BT Global Services was awarded in Q4 2007 with immediate roll out to 1,400 payees and BT Business Services is for 800 licences and deployment started in February.
Hutchison 3G, an international mobile media company and a member of the HWL Group of 3G companies which launched the UK’s first 3G network, awarded Practique the contract to deploy enterprise ICM to over 3,400 of its payees. 3, as the brand is commonly known in the UK, is now Practique’s eleventh client in the telco sector.
Retail and leisure display similar characteristics and sales behaviours to the telco sector and Practique continues to extend its reach into the Travel and Leisure Sector. is building a solid reputation in these sectors. FCm Travel, a division of the Flightcentre brand has awarded Practique the contract to deploy 700 ICM licences in the UK. FCm wereas impressed by Practique’s rapid understanding of theirits requirements, andPractique was successful in this competitive pitch because of its understanding of FCm’s requirements, its experience of business change processes and its strong references in this sector. FCm strongly believes Practique will help them to transform their business by the end of 2008.
STOP Press!
INCA Product Tour
INCA, Practique’s Incentive Compensation Management software currently manages the commission of over 120,000 employees across Europe every day.
To understand how INCA can positively impact and influence sales behaviours, drive productivity and increase profit margins, take our short product tour which is available to view now, by clicking here.
Practique in press
ICM is a burgeoning market and companies wanting a competitive edge are investing in the this technology. As the only European specialist vendor operating in the ICM space Practique is proactively educating the media on why businesses will benefit positively from a strategic ICM solution.
Jo Walker has written a series of opinion articles for the Pay & Reward press, the latest of which is published in Executive Compensation Review which provides an introduction to ICM and examines the multiple areas which enterprises can benefit from ‘21st Century Strategic Incentives’. The full article can be downloaded from www.practique.co.uk/knowledge .
Practique also actively comments on issues and trends which impact ICM. This month Jo Walker was quoted in industry trade publication Pay Magazine with reference to the increasing use of variable pay at all levels in the business. And James Burr, Pre Sales Manager at Practique was quoted in the same publication, advising customers on the best way to prepare an RFP report. This was a result of Practique’s inclusion in the Forrester analyst report on considerations for completing an RFP in the ICM software market.
Look out for forthcoming articles in Payroll and Human Resources magazine on how technology can attract, motivate and retain talent and why the market is experiencing a shift from volume to value sales in Pay Magazine’s June issue.
Industry Eye - Hewitt
Figure 1 – Traffic Light risk summary
Assess your risk with the Hewitt Sales Incentive Plan Risk Reward Analyser
In an ideal world, effective sales execution is a blend of the right selling model, staffed with competent, engaged people and supported by effective sales plans and processes. However, in practice, the market is evolving; most notably there is a shift in market dynamics which has in turn led to a focus on the sales force and its performance.
The sales process has now become more complex; it is no longer just about selling volume, but selling value. This requires a more consultative approach, broader knowledge and commercial acumen from the salesforce.
Figure 1 – Traffic Light risk summary
Assess your risk with the Hewitt Sales Incentive Plan Risk Reward Analyser
In an ideal world, effective sales execution is a blend of the right selling model, staffed with competent, engaged people and supported by effective sales plans and processes. However, in practice, the market is evolving; most notably there is a shift in market dynamics which has in turn led to a focus on the sales force and its performance.
The sales process has now become more complex; it is no longer just about selling volume, but selling value. This requires a more consultative approach, broader knowledge and commercial acumen from the salesforce.
Handpick any number of companies and the picture is all too familiar: organisations often have almost the right selling model but sales roles are not properly aligned to customer needs, mostly competent and engaged people, however the salesforce may lack the required skills or may have become disengaged with a resultant talent risk; and somewhat effective programmes and processes, where the target setting may not be tailored to specific sales roles or limited in its ability to overachieve targets.
These factors, combined with problems in plan design, legislation and corporate governance issues have brought risk management to the top of the organisational agenda. Hewitt views risk in a broad sense, including risk in the traditional sense i.e. equal pay but also in a sales compensation specific context, i.e. having the right target setting model is in fact a risk mitigator.
In working with organisations to identify risk in relation to reward plans, Hewitt can testify that sales incentive plans can lay an organisation open to risk in a number of key areas, including legislative, financial, operational and also in the area of talent management.
These factors, combined with problems in plan design, legislation and corporate governance issues have brought risk management to the top of the organisational agenda. Hewitt views risk in a broad sense, including risk in the traditional sense i.e. equal pay but also in a sales compensation specific context, i.e. having the right target setting model is in fact a risk mitigator.
In working with organisations to identify risk in relation to reward plans, Hewitt can testify that sales incentive plans can lay an organisation open to risk in a number of key areas, including legislative, financial, operational and also in the area of talent management.
Figure 2 – Basic traffic light process
With this in mind, Hewitt, alongside technology partner Practique, has developed the Sales Incentive Risk Reward Analyser (RRA). In its simplest form this is a detailed set of questions which when answered give a ‘traffic light’ indicator to help identify areas of potential and existing risk, including where the company needs to act as a priority and what needs attention in the future (Figure 1). The RRA will pinpoint, whether the risks are legislative, talent related, financial or reputational and any identified risk can be set in the broader business context.
The Sales Incentive RRA leaves no stone unturned. It incorporates a thorough review of the individual components of the sales plans as well as Equal Pay risks and risks associated with a misalignment of talent as well as financial and reputational risks.
The RRA can be tailored to individual circumstances so that, for example, only a subset of risks will be examined. Figure 2 outlines the basic traffic light process.
Trials of the RRA have shown organisations don’t always have an accurate view of its risk and the results have been surprising. A full review RRA takes an average of 30 minutes to complete a survey in addition to time spent sending any quantitative data which is requested to support the RRA findings.
For more detail please contact Robert Miller, partner at Hewitt 020 7939 4621, Robert.miller@hewitt.com
Figure 3 3 – High level review of an organisation’s sales incentive plans where action planning would focus on the red and amber issues identified.
Talent Risk Financial Risk Reputational Risk Litigation Risk
High Risk: Act Now Hunter-farmer distinction unclear.
On-target earnings below market.
One-size fits all approach rather than role specific sales plans. Plan costs increasing despite flat revenues.
No incentive to sell high margin products. - -
Some concern: Future action required Performance management and training for salesforce not fit for purpose. No cumulative performance measurement – second half year results poor despite high awards in first half.
Governance process poor, unclear criteria for making changes to sales plans.
Individual regions adopting separate plans. Excessive new business focus rather than management of long-term relationships. Potential for exposure to equal pay claims on basis of like work.
No concern: Maintain practice - Target setting process clear and consistent.
Targets reconcile to top-line. - No evidence of recruitment discrimination
White Paper - Is the Rapid Return on Investment driving the demand for specialist Incentive Compensation Management software?
In an abridged version of this white paper, we highlight how Incentive Compensation Management (ICM) software is able to drive sales, increase
market share by gaining competitive advantage and offers a rapid return on investment. To download the full white paper, click here.
The impact of an ICM solution such as INCA pays dividends almost immediately after it has been deployed but measuring the return is essential; with enterprise software, the return
has to encompass more than what the software itself offers. Typical operational efficiencies with INCA provide up to 90% error reduction and 50% reduction in related IT and administrative staffing costs.
Typically many organisations in Europe
still rely on spreadsheets to calculate sales commission, bonus and reward, but systems such as Practique’s INCA are flexible and increase the effectiveness of compensation schemes, while providing a more scientific approach to improving profit margin. This is because spreadsheets and/or bespoke systems are difficult to manage, time consuming and often prone to errors from either within the system or via the operator – as a rule of thumb the error rate for manual input is 6-7%. Perhaps of greater significance is the high administration overhead associated with maintaining these systems, this is where companies can incur a cost, as high as £1,000 per person annually, for administering and tracking commission spend.
In addition, analysts such as Gartner estimate companies overpay between 5-12% of the annual compensation budget and research from Pay & Reward experts Mercer, shows an individual sales person spends just 30% of time actually selling and a massive 21% on admin. This resonates with Practique’s experience that sales personnel spend on average between one and four days each month recalculating their pay – that’s 5% of sales time every month!
Deployment of INCA can be within as little as six weeks for an unlimited number of licences and the actual return on investment in purchasing the
software is on average, an impressive 12 months. It is no surprise then that analysts such as Mercer now recognize incentive-driven organisations achieve real benefits; in fact it can make the difference between profit and loss.
Examining further the idea of ROI being more than the return on the initial software investment, but a value-add to the business, this can be witnessed with STA Travel, the market leader in student and youth travel.
By using INCA the business was able to influence directional selling by using defined incentives to promote more profitable areas of the business.
As a result, the productivity of sales advisors increased by 11% in a 12 month period but sales of more profitable travel insurance was up by 21%, accommodation by 14% and tours by 6%. At telecoms corporate, Cable & Wireless, implementing ICM meant a cut in operations of 37% and sales volume was driven up by 22%. Similarly, The Carphone Warehouse implemented INCA in summer 2007 and has already witnessed a 10% improvement in productivity, in addition to a 1-2% cost improvement as a percentage of gross margin.
Technology’s role in accelerating productivity gains has advanced dramatically, most notably, according to analysts Gartner, in the area of ICM. Gartner forecasts that more than 90% of enterprises will focus on using ICM systems in 2008 and the initial drive will be to use calculation engines to improve accuracy and administration time.
In Europe the telco and hi-tech sectors are the biggest purchaser of third party ICM solutions, accounting for over 40% of the market.
The bottom line is that an ICM system can save companies a considerable amount of money and the ROI is not limited to initial investment alone, when overpayment, admin costs and forecasting are taken into consideration ICM will increase the effectiveness of compensation schemes and provide a more scientific approach to improving profit margin, to keep organisations one step ahead of the competition.
Deployment, training and maintenance are often hidden costs in the buying pattern that can affect the bottom line investment, which makes it harder for companies to recognise immediate returns. However, if companies understand ROI and demand tangible ROI models from vendors, they will see the true value of compensation systems to their business. In technical terms, deploying an Incentive Compensation Management system could be termed a 'no brainer'.
Partner in the Spotlight:
In every issue of Practique Perspective, we turn the spotlight on one of our clients or partners. For this issue we are highlighting Rackspace®, one of Europe’s fastest growing and most successful IT hosting companies.
Rackspace was founded 10 years ago in San Antonio, Texas and today has over 2,000 employees and 16,000 customers worldwide. The company’s European headquarters opened in 2001 and it has since been hosting and supporting mission critical websites, internet applications, email servers, security and storage services for customers including Renault, Confused.com and Vue Entertainment.
Rackspace’s experience incorporates managing hosting solutions ranging from simple web servers to complex online applications and email solutions. (Continued on page 6)…
Its premise is simple; by outsourcing your IT hosting to Rackspace, customers get the peace of mind that their hosting environment is being looked after by the experts, which in turn alleviates pressure on the IT department. In short, it takes away the day-to-day IT tasks and projects which are important but not always the number one priority. So implementing, updating, troubleshooting, patching, monitoring, administering, backing up and storing
and upgrading - all becomes Rackspace’s responsibility.
Rackspace support staff are highly trained specifically for supporting
complex hosting environments across Microsoft Windows and Red Hat Linux
Operating Systems and all support calls are handled by level III technicians.
Rackspace is built to handle highly-customised hosting environments and processes are all designed to adjust to customer needs quickly. This expertise and flexibility are not the only qualities which make Rackspace an industry leader. What sets the company apart is its passion and this infiltrates the entire company ethos, so much so that Rackspace has devised, a unique brand
of customer service – Fanatical Support®. This concept has won much industry recognition, including being voted the UK's best service company in
the Unisys/Management Today Service Excellence Awards in 2005.
In reality, what does this mean for customers? Fanatical Support means that Rackspace employees are available 24/7/365 to meet and exceed customer expectations. Every customer gets a fast response to critical issues, unlimited technical phone support, access to a huge online knowledgebase, guaranteed 100% network and infrastructure uptime. And in an ever automated world Rackspace still preserves ‘old fashioned’ practices – no answer phones, no voicemails, no forwarding, no press 1 to be taken seriously, no forwarding, no press 1 to be taken seriously, press 2 to be sent to the wrong department – just a real person at the end of the phone answered within five seconds.
Rackspace’s vision and work ethic is obviously working for both staff and
customers. 97 percent of customers would refer Rackspace to a business colleague and in the recent March 2008 Sunday Times, ‘Top 100 Best Companies to Work For’ Rackspace was highly ranked by its employees, with 85% of staff stating they are proud to work for the company.
Rackspace has been named three times as Microsoft’s Hosting Partner of the Year, it is First Red Hat Premier
Hosing Partner in Europe and the only MySQL certified hosting partner in the world.
Practique recognises that some clients have specific hosting requirements so when it sought to select a partner to host its INCA software, Rackspace was the obvious choice. This was due to its high specification criteria of dedicated servers, 24/7 support and a high level of in-house technical knowledge. British Gas Business, part of Centrica Plc was the first client to outsource its INCA hosting with Rackspace and as part of the Orange implementation Rackspace will provide a fully hosted solution for INCA.
Of the working relationship with Practique, Rackspace’s Brian Garvey, Channel and Alliances Manager (title) commented:
“There is real synergy between Practique and Rackspace on many levels; our customer service ethic and delivery methodology are in parallel as is our commitment to get the job done. At the end of the day, we are both working towards the same goal – a happy satisfied customer.”
For more details on Rackspace please visit: http://www.rackspace.co.uk Rackspace’s vision and work ethic is obviously working for both staff and customers. 97 percent of customers
would refer Rackspace to a business colleague and in the recent March 2008 Sunday Times, ‘Top 100 Best Companies to Work For’ Rackspace was highly ranked by its employees, with 85% of staff stating they are proud to work for the company.
Training
New state of the art training facilities heralds a new portfolio of training courses
Practique has extended its training facilities at its head office in Century Court, Bracknell in order to cater for an increased demand for training training.
The new portfolio of courses which will be unveiled next month, will aid customers to in optimising optimise thetheir use of INCA, A.,
Practique’s flagship ICM software and facilitate best practice in enterprise compensation management. The courses have been designed to help with rapid skills and knowledge acquisition for new customers whilst providing existing customers access to the latest workshops and tutorials to aid further learning and deep system knowledge.
The new course portfolio is suitable for all system users from Stakeholders and Project Managers to Administrator Users, Management Groups and Analysts.
Courses can be purchased singularly or in bundles to attract preferential discounts and each course is limited to a maximum of 12 delegates at any time to ensure participants profit fully from the training.
To celebrate the opening of the new training facilities, Practique is offering a 25 percent discount off all courses booked on or before 301th st May. For full course details and to discuss individual requirements, contact Helen Wylde on 01344 865 109 or email: helen.wylde@practique.co.uk
The Practique Partner Ecosystem
Practique remains firmly committed to developing its rapidly expanding partner eco system. The partner programme has been designed to assure our customers of a differentiated and extended value proposition for enterprise wide ICM deployments.
The partner programme encompasses:
Technology and Solutions Partners who supply leading industry technology platforms and complementary business solutions
Business Consultants specialists who provide advisory services on workforce performance programmes; compensation strategies, employee incentives and benefits schemes
Systems Integrators who advise, design, implement, and support enterprise class ICM solutions with particular strength in integration; data migration, business transformation and programme management
Managed Service Providers who provide for 24:7 hosted and on-demand solutions
The combined resources of Practique’s highly skilled Consulting team and its growing partner network is designed to meet the individual needs of all clients and in doing so, provide a world class experience.
This month Practique welcomes DRQ S.A and Sapient Consulting into the Partnership Alliance programme.
DRQ S.A. is headquartered in Poland and is recognised as a leading Systems Integrator with established customers in the telecommunications, finance, media, the public and corporate sector. DRQ specialises in the provision of customised solutions which are seamlessly integrated with the clients core IT infrastructures and personalised to their individual needs. Practique's partnership with DRQ is in direct response to the strong market demand witnessed in Eastern Europe.
http://www.drq.pl
Sapient Consulting is one of two groups operating under the Sapient brand, which helps clients compete, evolve and grow in an increasingly complex marketplace.
Sapient Consulting provides a range of services from business and IT strategy, process and systems design, package implementation and custom development, in addition to outsourcing services such as testing, maintenance and support.
There is a strong synergy between Practique and Sapient Consulting whose industry expertise spans Telco, Media and Internet, Energy and Travel.
With regard to the partnership, Jo Walker commented, “Sapient has a solid reputation for its expertise in business processes, which enable technologies, applications and user-centered design to create solutions that achieve measurable business results. By aligning our businesses, customer and technology goals, and executable road maps are developed which will improve overall business performance.”
http://www.sapient.com
Specialist & Regional Consulting Firms
In February Practique strengthened its delivery capability in Europe and the
Middle East by partnering with regional Consulting specialists,
LeanCRM AG. With its heritage in CRM and a consulting partner for
Salesforce.com, LeanCRM has a strong pedigree in understanding how sales need to be rewarded for attracting and retaining customers.
LeanCRM offers a ‘lean’ approach to both consulting and technology; it embodies efficiency and adopts best
practice solutions which are scalable and repeatable and it offers customers a proven business model with a rapid return on investment.
http://www.leancrm.com/