In addition to its comprehensive product and service line, Novell attributes its success to its sales force and uses incentive compensation to continue to motivate profitable behavior. However, its compensation system lacked certain functionality required for long-term programme success. Its current system made it difficult for the compensation team to make adjustments to compensation plans. The team was dependent upon IT to facilitate compensation plan changes for most adjustments. This not only made the process time consuming and inefficient but expensive to maintain in both time and resources.
Because the system did not allow compensation team members to make changes quickly, compensation plans often did not reflect current business objectives that would yield the desired performance from plan participants.
Sales representatives realized the compensation system's inefficiencies and started a practice called "shadow accounting," in which they tracked their own commissions and progress.
"This accounting negatively impacted the amount of time representatives were able to focus on selling," says Jim Parker, Director of Worldwide Commissions at Novell. "It also placed a strain on compensation resources, as the compensation team was often called upon to validate data within the system."
After Novell's initial incentive compensation project fell short of expectations, the company realised it needed something that could withstand an entire range of tasks, from the ability to easily track and manage changes to paying incentives globally.
An evaluation team was formed from sales, finance, human resources, and IT, and it produced specific criteria that it required in a compensation system: heightened functionality to empower the compensation team with the ability to produce daily reports, pay on time and accurately, and change compensation plans quickly and easily; reduce resources and costs required to maintain the system; and improve visibility and modeling capabilities for management.
After several meetings with possible EIM vendors, as well as input from a key
compensation management analyst at Gartner, Novell made the decision to form a partnership with Callidus Software. It determined that Callidus Software fit its current and long-term needs.
"The Callidus Software solution was simply the best fit for our organisation: it demonstrated that it would be the reliable vehicle in which to communicate what was being paid, why it was being paid, and when it was being paid," says Jim Parker.
With Callidus TrueComp, Novell is able to use incentive compensation as it was meant to be used: to drive value-adding performance and accelerate profit and growth.
During the implementation process, the Novell and Callidus Software teams forged a strong partnership. "During the implementation, the Novell and Callidus Software partnership was etched immediately. Both teams were fully engaged in the project, providing us with constant knowledge transfer and the tools to manage the system after the implementation."
After implementing TrueComp, Novell noticed some immediate changes to the way it manages compensation. The compensation team no longer spends weeks trying to make simple changes to compensation plans. They now have the ability to quickly implement compensation plan changes, allowing them to tighten the link between corporate strategy and execution.
"There is no compensation plan we've implemented so far our system cannot handle," says Jim Parker. "The compensation team is no longer dependent upon IT, enabling 50% of system-dedicated IT staff to redirect their focus to other projects for the enterprise."
Because the system enables the compensation team to control compensation, it is much more confident in the data coming out of the system. "Because of TrueComp's automated functionality, we have been able to pay our sales representatives with increased accuracy. Confidence in the system has improved, which has enabled the sales force to spend less time reconciling commissions and more time selling," says Jim Parker.
If a question does arise regarding a payment, the compensation team has the tools they need to fully audit and trace the transactions. Managers and employees benefit from ad hoc and daily online performance reporting, providing immediate and up-to-date visibility into the performance of the organisation. With accurate and reliable historical data, management is now able to make better decisions to prepare for the future of the organization while being better able to judge the effectiveness of current compensation plans.
"TrueComp has enabled us make sound strategic decisions as we are able to identify what factors effectively motivate our sales team. We are now assured that we can handle any business landscape - both now and in the future," says Jim Parker.