Welcome to Enterprise Incentive Software

RETURN ON INVESTMENT
There are two ways to look at payback or return on in acquiring an incentive compensation software (EIM) application investment (ROI). The first and most important measure is ‘hard’ dollar savings compared to the current cost of administering and supporting incentive compensation activities. These are typically the fully loaded salaries of the individuals charged with these tasks and any internal/external IT charges for maintaining whatever custom application is being used in making and tracking the incentive calculations.

This is a straightforward and easy cost comparison. Since software purchases are amortized, the turnkey price of the software (licensing the application, data conversion, incentive plan implementation, installation, training and support) is most typically ‘charged’ to earnings over a three-year period. An immediate saving is achieved if this amortized charge is equal to or less than the current internal costs that it displaces. Because CATS offers a unique matrix of license combinations, extraneous functionality is avoided and a more precise match of features to cost ratio is therefore achieved.

ONLY CATS HAS THE ABILITY TO PRODUCE IMMEDIATE ‘HARD’ DOLLAR ROI IN THE ECM/ICM SPACE. THIS IS A RESULT OF UNIQUE PERPETUAL AND UNLIMITED USER LICENSING THAT ELIMINATES ANTIQUATED ‘PER SEAT’ AND ‘PER PARTICIPANT’ LOGIC OFFERED BY ALL OTHER COMPETITORS.

A second way to measure ROI is to look at all of the ‘soft’ dollar benefits that accrue in implementing an incentive compensation (EIM) software application. While these ‘soft’ dollar benefits are often real, they are more difficult to analyze and receive credit for from the typical, skeptical nature of CFO’s of the 21st century. Nevertheless, since our competition persists in providing ROI calculators, we have outlined our own example below.

SAMPLE COMPANY PROFILE

$1 billion dollars (US) in revenue.
$50 million dollars (US) in total incentive compensation.
1000 sales reps, $1 million dollars (US) in quota.
$100,000 dollars (US) in Total Target Compensation: 50% Base/50% at risk.
15% annual attrition rate.
1 month to hire and1 month to train new representatives.

DIRECT SALES FORCE RELATED BENEFITS AND SAVINGS:

Reduce incentive compensation overpayments by 3%.
Reduce attrition rate from 15% to 10%.
Save on headhunter fees incurred through employee acquisition (typically 30% of annual base).
Save on training costs (1 week out of field per representative).
Overall $1.5 million dollars (US) in savings per year or approximately $15,000 per representative.

NO OTHER EIM SOLUTION ON THE MARKET TODAY CAN CERTIFY TOTAL COST OF OWNERSHIP NUMBERS FOR FORTUNE 500 COMPANIES AS THE FOLLOWING EXAMPLES DETAIL.

10 YEAR AVERAGE ANNUAL COST FOR CATS (INCLUDES ALL CHANGES, SUPPORT, (2) UPGRADES AND REPORTS)
Annual average cost based upon (850) salespeople	$55,589.00
Average annual cost per plan participant	$65.40
Average monthly cost per plan participant	$5.45

6 YEAR AVERAGE ANNUAL COST FOR CATS (INCLUDES ALL CHANGES, SUPPORT, UPGRADES AND REPORTS)
Annual average cost based upon (10,000) salespeople	$154,849.00
Average annual cost per plan participant	$44.00
Average monthly cost per plan participant	$3.66

INCREASED SALES FORCE PRODUCTIVITY AND PRODUCT PROFITABILITY
In reviewing the productivity enhancements below, it is important to understand that several key factors exist in thwarting sales efficiency. These include, salesperson turn-over, time to production for new representatives, total quotas, individual representative quotas, quaota attainment, estimated time lost by sales due to 'shadow accounting' (which Gartner estimates at 20% or 1 day per week), as well as the estimated percent of sales time spent in front of a given prospect (17%-23% generally accepted).

GOAL	RESULT
To save 2 months incremental quota time from hire to deployment in field	50 reps with $1 million dollars (US) in quota multiplied by 2 months ($166,667 x 50 reps = $8,333,333 in 1 year)
Increase amount of face-to-face time with prospects	Average 17% of time = 340 hrs/yr (40hr/wk 50wks * 17%)* $1mm in quota / 340 hr = ~$2941/hr of face-time
Up to 20% of reps time spent shadow accounting. Reduce accounting by 2% and replace with face-time	20,000/rep x 1000 reps = $20,000,000 w/ 2% increase in face-time

Dramatically increase sales revenue	Total Revenue Increase >$28,333,333 in 1 year

SALES REPRESENTATIVE RETENTION

Drives higher quota and attainment.
Drives higher customer loyalty.
Drives increased corporate knowledge.
Drives higher territory coverage.

MORE SELLING TIME

Increase face time at prospect to advance opportunity.
Less time reconciling pay.
Less shadow accounting and off-line tracking.

CUSTOMER PROFITABILITY

Develop retention, up-sell, or cross-sell activities.
Reduce effort on non-profitable customers.

DRIVE STRATEGIC INITIATIVES

Link Incentive Behavior to Competitive Wins.
Acquire early market share (product seeding).
Establish key channels (penetration).
Dominate specific verticals and territories.
Motivate consistent deal flow (timing).

ALIGN BUSINESS EVENTS WITH COMPENSATION

Pay on Collection.
Pay on Channel Sell-through.
Manage promotional programs and trial periods.

PAY ON COMPLEX CROSS-FUNCTIONAL INITIATIVES

Encourage interdepartmental cooperation.
Sales and Marketing.
Sales and Customer Service.
Sales and Professional Services.

ATTRACT AND RETAIN TALENT THROUGH EFFECTIVE CONTROL OF COMPENSATION PROCESS

Minimize Direct Sales attrition.
Engender dealer loyalty (esp. in non-exclusive channels).
Eliminate channel conflict.

OTHER AREAS OF POTENTIAL OPPORTUNITY

Discount/Payment Terms Management.
Mid-cycle adjustments due to poor forecasts. Pay for exceptional performance, not uncertain market conditions.
Accrue incentive compensation quickly and accurately.
Expand pay-for-performance to non-sales organizations.
Model and forecast scenarios.
Automate sales and incentive payment reporting and analysis up and down through the organization using ‘self service’ tools and password-protected portals.