At Carl Zeiss Inc. North America, the home-grown incentive compensation system no longer worked, creating distrust among the sales staff and administrative headaches for the IT organization. About 18 months ago, John Roulat, vice president of IS at Carl Zeiss North American headquarters, in Westchester, N.Y., undertook the task of finding a new system, ultimately choosing Synygy Inc.s Enterprise Incentive Management, or EIM.
According to Roulat, the old system couldnt keep pace with the way Zeiss did business. “As things got more complex, it became burdensome; it would fail, was difficult to maintain and slow to change,” Roulat said. “Back then, it was once a year we had a change in plans. We now have changes more than once a year, and this has forced us to evaluate alternatives.”
For a company to need an incentive management application, it must have a complex product mix, a complex incentive plan, or a complex sales distribution network involving third-party and direct sales. Carl Zeiss has all three of these issues. The company, which provides solutions for the optical and optoelectronic industry, now has the ability to manage incentive compensation for its sales team as well as its distributor network.
According to Roulat, the system creates reports for distributors, which they can then use to compensate their sales staff.
Roulat and his team could not find the employee incentive management feature set in enterprise resource planning and CRM (customer relationship management) programs. “While they may promise it or address simple models, they just dont handle a complex environment,” he said.
The biggest challenge was finding a solution at a price that matched Carl Zeiss size, which Roulat describes as a mid-cap company with a sales staff of 160 among the divisions that use the employee incentive application. After narrowing the field to three products, Roulat decided on EIM because of Synygys expertise and support structure.
Deploying the system took about seven months, and Synygy worked to meet a go-live date that coincided with the start of Carl Zeiss fiscal year. Roulat recommends that anyone installing an incentive management application be prepared for that process. “You probably dont know the process totally—maybe 80 to 95 percent, but you dont know all of it in the detail required for an EIM. Be prepared for an internal learning experience.”
Sales management often needs to override rules—for example, when salesperson A contributes to salesperson Bs sale. EIM provides the flexibility to override rules, making it easier for Carl Zeiss sales managers to get a handle on this aspect of their business.
Overall flexibility is important as well. “Plan adjustments happen periodically throughout the year. The only time it comes into question is when the business mix changes, product priorities change or we want to bump up a plan,” Roulat said. Synygys experience comes into play here as well. “Some changes we take care of ourselves; the admins go in and adjust tier-one and tier-two plan settings. If something more comes up, we ask for Synygys advice, and we test it, and thats it,” he said.
Roulat likens EIM to a payroll system. He found that developing the necessary expertise in-house just didnt make sense. He would rather have a service and the experts to back it up.
Roulat said he thinks the category still needs to mature, particularly when it comes to pricing. “For the mid-cap market, I was disappointed in pricing. Its not out of reach but not something you take lightly,” he said.
Carl Zeiss has seen a significant return on its investment, however. The product fits with strategic goals: Now the companys IT department rarely gets involved with the software. Instead of spending time double-checking sales pay, the company can be more proactive on sales analysis.
In fact, reporting has delivered unmeasurable benefits for Carl Zeiss, Roulat said. The sales personnel have regained confidence in the compensation system because it can easily track compensation, and management can dissect sales information in ways that few CRM or sales force automation tools allow.
Roulat has found that by analyzing information based on individual and team sales, rather than on the product and company approach often found in sales-tracking tools, Carl Zeiss can see what sales representatives are doing right.