En   abling  the  

T   ransforma0on  of  the  

I   ncen0ve  

C   ompensa0on  

E   xperience  

Greg Peiker, Senior Director Solution Mgmt, Microsoft Corporation���Dirk Weber, Principal Solution Mgr, Microsoft Corporation���Joe Kaddis, GM Excentive International North America���

���

Venice, April 2013���

EnTICE  

Slide  2  

EnTICE - Leading to Business Transformation

•  IC  Plan  Understanding      

• Par0cipant  IC  Experience  NSAT    

•  IC  Plan  Mo0va0on  

•  IC  Plan  Alignment  with  Business  Unit  Goals  

•  Leadership  NSAT  on  IC  as  a  Strategic  Asset  

•  IC  Plan  ROI  Effec0veness  

• Opera0ons  Cycle  Time  Metrics  

• On-­‐0me  &  Accurate  Payments  

•  IC  Opex/Par0cipant  

Plans  That  Drive  Appropriate  Sales  

Ac0vi0es  at  the  Individual  Level    

Aligned    Comp  &  Future  Business  Strategy  

Op0mized  Opera0onal  and  Administra0ve    

Effec0veness  

Objec0ves  

Measures  

Org  Transform

a0on

 

Transac0onal  As-­‐Is  

End  State  

Transac0onal  

“Business  Insight”  “Business  Insight”  

Slide  3  

EnTICE  

VIDEO

Slide  4  

���Managed Service & benefits expected ������

EnTICE

Slide  5  

EnTICE Our 12 month Journey

Vision & Scope

Build vs. Buy

Tool RFP Process

Requirements & Processes

Define IC Model

Core vs. Context

Program Evaluations

EMEA Pilot

Combined Strategy

System Integration

RFP

Vendor Consolidation

RFP

Slide  6  

EnTICE Due Diligence "   24 different ICM vendors "   8 month evaluation "   60+ stakeholders "   9 Use Cases "   4 Scenarios/8 Process Areas "   Scalability testing "   Site Visits

Pay Line Graphs

Payment Calculation

Calculate Attainment Measures

Regular Caps

Pay Lines

Determine Pay Line

Tenure CapCap AA/OSA based on days on incentive plan

< 60 days 0%>= 60 days No cap

Award Type CapsCap AA based on Award Type

Award Type CapQ1 – Q3 Advance 100%Q4 Payment 300%

Termination Involuntary RIF 300%Misconduct/Unsatisfactory Performance 0%Voluntary (YTD Rev/Prorated Quota) 100%

(YTD Rev/Full Year Quota) 300%

Transfer 300%

Months on Quota CapCap AA based on Months on Quota

<= 1 Month 100%> 1 Month <= 2 Months 200%> 2 Months No cap

Algorithm ParametersAll Quotas and Actuals to be calculated as Cumulative Annual except for BOS Attach which is calculated as Absolute Full Year.

Payout is Quarterly

Transition Allowance is set at 60 days.

Transition Allowance periods are set at 100% Payout, until final payment where it is set at 100% Payout, or the Calculated Payout, whichever is greater.

Paid LOA periods are set at 100% Payout.

Terminations take the greater payout of provided from a YTD Rev/YTD Quota or YTD Rev/FY Quota attainments.

YTD Rev/YTD Quota Terminations do not include partial final fiscal months.

PPA CapCap AA/OSA based on PPA

PPA not signed 0%PPA signed No cap

Version 1.0 FY12

SMSG 75-130

Example (No TA or LOA):RBI Payout% = 234% : RBI Payment = RBI Payout% x RBI Payout = 234% x $14k = $32,760 OS Payout% = 190% : OS Payment = OS Payout% x OS Payout = 190% x $6k = $11,400Total Payment = $32,760 + $11,400 = $44,160

Payout CalculationRBI Payout% =

Minimum (Capped Accelerated Attainment, Accelerated

Attainment)

OS Payout% =Minimum (Capped OS

Accelerated Attainment, OS Accelerated Attainment)

Determine Pay Line Accelerator1. 100% of PGs Attain at least 100% then Pay Line 3 (Green)2. 66% of PGs Attain at least 100% then Pay Line 2 (Yellow)3. 50% of PGs Attain at least 100% then Pay Line 1 (Red)4. 33% of PGs Attain at least 100% then Pay Line 1 (Red)5. 0% of PGs Attain is at least 100% then Pay Line 1 (Red)

Determine OS Pay Line Accelerator1. Target >= 85% then OS Payline 1 (Blue)2. OS Payline 2 (Orange)

Pay Line 3 (Green): Accelerator Calculation(Accelerated Attainment) =

TWA% or TSA% within the range * MultiplierRange Multiplier RBI at Threshold< 75% 0.0000 ->= 75% < 100% 2.5000 37.5%>= 100% < 130% 6.7000 ->= 130% 1.5000 -

Example: TWA%=120% AA= 37.5% + 2.5 x (100%-75%) + 6.7 x (120%-100%)

=37.5% + 2.5 x 25% + 6.7 x 20%=37.5% + 62.5% + 134%=234%

OS: Payline 1(Accelerated Attainment) =

OSA% within the range * MultiplierRange Multiplier OS payment

at Threshold< 97.5% 0.0000 ->= 97.5% <=100% 40.0000 -> 100% <= 120% 10.0000 -> 120% 0.0000 -Example: OSA=109% OSAA= 40.0 x (100%-97.5%) + 10.0 x (109%-100%)

= (40.0 x 2.5%) + (10.0 x 9%)= 100% + 90%

= 190%

OS: Payline 2(Accelerated Attainment) =

OSA% within the range * MultiplierRange Multiplier OS payment

at Threshold< 95% 0.0000 ->= 95% <=100% 20.0000 -> 100% <= 120% 10.0000 -> 120% 0.0000 -Example: OSA=109% OSAA= 20.0 x (100%-95.0%) + 10.0 x (109%-100%)

= (20.0 x 5.0%) + (10.0 x 9%)= 100% + 90%

= 190%

Pay Line 1 (Red): Accelerator Calculation(Accelerated Attainment) =

TWA% or TSA% within the range * MultiplierRange Multiplier RBI at Threshold< 75% 0.0000 ->= 75% < 100% 2.5000 37.5%>= 100% < 130% 1.5000 ->= 130% 1.5000 -

Example: TWA%=120% AA= 37.5% + 2.5 x (100%-75%) + 1.5 x (120%-100%)

=37.5% + 2.5 x 25% + 1.5 x 20%=37.5% + 62.5% + 30%=130%

Pay Line 2 (Yellow): Accelerator Calculation(Accelerated Attainment) =

TWA% or TSA% within the range * MultiplierRange Multiplier RBI at Threshold< 75% 0.0000 ->= 75% < 100% 2.5000 37.5%>= 100% < 130% 4.0000 ->= 130% 1.5000 -

Example:TWA%=120% AA= 37.5% + 2.5 x (100%-75%) + 4.0 x (120%-100%)

=37.5% + 2.5 x 25% + 4.0 x 20%=37.5% + 62.5% + 80%=180%

Specialty Caps

OS Award Type CapsCap OSA based on Award Type

Type Type CapQ1 – Q3 Advance 100%Q4 Payment 300%

Termination Involuntary RIF 300% Misconduct/Unsatisfactory Performance 0% Voluntary (YTD Rev/Prorated Quota) 100%

(YTD Rev/Full Year Quota) 300%

Transfer 300%

Months on Quota CapCap OSA based on Months on Quota

<= 1 Month 100%> 1 Month No cap

Product Group 1(PG1)

PG1 Target : PG1 ActualsPG1 Weight

Product Group 2(PG2)

PG2 Target : PG2 ActualsPG2 Weight

Product Group 3(PG3)

PG3 Target : PG3 ActualsPG3 Weight

BOS AttachBOS Target : BOS Actuals

If Nonweighted RevMap:Total Straight Attainment (TSA%)

Sum of PGx Actuals/Sum of PG Targets

If Weighted RevMap:PG Weighted Attainment (PGxWA%)

PGx Attainment x PGx WeightTotal Weighted Attainment (TWA%)

Sum of PGx Weighted Attainment

PGx AttainmentPGx Actuals/PGx Targets

OS Attainment (OSA%)IF  Actuals  >=  Targets:                              1  +  (Actuals  -­‐  Targets)/(1  -­‐  Targets)IF  Actuals  <  Targets:                              Actuals/Targets

OptionalTarget & Actuals must be positive.

Target must be non-zero.

OptionalTarget & Actuals must be positive.

Target must be non-zero.

OptionalTarget & Actuals must be positive.

Target must be non-zero.

OptionalTarget & Actuals must be

positive.Target must be non-zero.

RBI Split by RevMapApply these weightings to non-CBI Incentive Target

RBI 60% BOS/Windows Share 40% - Default RBI split if not otherwise overriddenRBI Splits are specified by RevMap in the following file:

ExampleRevmap 291.11: Non-CBI Incentive Target = $20kRBI Payout = $16k = 80% of $20kOS Payout = $ 4k = 20% of $20k

BOS Attach Rates

Windows ShareWS Target : WS Actuals

OptionalTarget & Actuals must be positive.

Target must be non-zero.

ICM Operating Process Model

1.1 Manage Objectives

1.5 Model Incentive Plans

1.6 Set Targets / Quotas

1.0 Strategy & Planning

1.4 Design Incentive Strategy

1.2 Market & Administer

Product

1.3 Plan Channel Coverage &

Manage Capacity

2.1 Define Business Rules

2.0 Plan Setup & Implementation

2.3 Manage Incentive Tech.

Change

2.2 Create & Change Plans

3.3 Distribute & Manage Targets /

Quotas

3.1 Manage Participant

Profiles

3.0 Participant Administration

3.2 Manage Participant

Relationships

4.1 Manage Customer Data

4.0 Domain Data Management

4.2 Set up & Manage

Reference Data

4.3 Manage Territory

Definitions

5.1 Integrate Transactional

Data

5.0 Incentive Comp. Processing

5.4 Adjust Commissions &

Revenue

5.2 Credit Revenue / Actuals

5.3 Calculate Incentives &

Overrides

6.1 Respond to Information Requests

6.0 Incentive Comp. Servicing

6.4 Provide Self-Service Content

& Status

6.2 Resolve Disputes

6.3 Process Adjustments

7.1 Manage Payment Balances

7.0 Payment Processing

7.2 Administer Draws /

Guarantees

7.3 Process Payments

8.1 Report on Sales

Performance

8.5 Provide Ad-Hoc Reporting

8.6 Adhere to Audit

Requirements

8.0 Reporting & Analytics

8.4 Provide Business Perf.

Dashboard

8.2 Report on Operational

Metrics

8.3 Provide Management

Reports

3.4 Ensure & Manage

Compliance

9.0 Supporting Capabilities9.1 Manage Stakeholder Relationship

9.2 Manage Operational Team

9.3 Manage Business

Processes

9.6 Maintain Applications

9.7 DevelopApplications

9.5 Manage Operating Calendar

2.4 Communicate Compensation

Plans

7.4 Account for Incentives in GL

1.7 Budget Compensation

Expenses

9.4 Manage Change

2.5 Manage Awards & Contests

5.5 Process Awards & Contests

8.7 Extract To Downstream

Systems

Slide  7  

Partners

"   Greg Peiker, Director Solution Mgmt, Microsoft Corporation���"   Joe Kaddis, GM Excentive International North America���

���Slide  8  

Market Dev Funds/ Co-op���

Rebates and Discounts ������

Pay for Activation/Placement ������

Revenue Share������

Sell Fee������

Subscriptions ������

Joint Sell���������

     1M+  

9  

Slide  9  

ü 

Ops and Support business users are able to configure

Simulate, take action and then change and/or refine

EMPOWER PARTNERS!

Agility and Time to Value  

Slide  10  

Paradigm Shift���

     Usability,  agility,  flexibility  and  total  cost  of  ownership  Slide  11  

Business Process Context for Evaluation���

Key Requirements���

"   Analyze all the payees on a single deal���

"   Insight into partners that drive or tax the business���

"   Separate design, accruals, earnings and payments���

"   Empower partners with analytics and simulations���

"   Simulate, take action and then change and/or refine���

��� Slide  12  

Slide  13  

En   abling  the  

T   ransforma0on  of  the  

I   ncen0ve  

C   ompensa0on  

E   xperience  

Questions?������

��� ���

Appendix���

Slide  15  

En   abling  the  

T   ransforma0on  of  the  

I   ncen0ve  

C   ompensa0on  

E   xperience  

Greg Peiker, Senior Director Solution Mgmt, Microsoft Corporation���Dirk Weber, Principal Solution Mgr, Microsoft Corporation���

Joe Kaddis, GM Excentive International North America���

������

Venice, April 2013���

Slide  17  

���ü  Accurate view of incentives- payments/ accruals ü  Ability to dispute prior to payments ü  Early view of earning potential and forecast ü  Ability to simulate ü  Easy analytics ü  Minimal internal support required ü  Strategic & informed sales management

������

                                                                       Sales “Bill of Rights”  

Slide  18