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The Flagship Enterprise Incentive Management Offering

Written By: Predrag Jakovljevic
Published On: December 12 2006

The Flagship Offering

The flagship offering of San Jose, California (US)-based Callidus Software is the Callidus TrueComp Enterprise software suite. This software bundle automates the modeling, design, administration, reporting, and analysis of pay-for-performance incentive compensation programs for enterprise-level sales and distribution organizations. The company's customers use the TrueComp suite to design, test, and implement sales compensation plans that reward on the profitability of the sale, discourage excessive sales discounts, encourage team selling, and promote new product introduction, as well as other desired sales activities. By allowing enterprises to develop and manage incentive compensation linked to the achievement of strategic business objectives, the software suite enables customers to acquire and reflect upon all relevant sales data more accurately; apply it to each payee's pay-for-performance program more precisely; and automate the day-to-day activities associated with administering transaction-driven, variable incentive compensation.

Part Two of the series Enterprise Incentive Management Leader Responds to Market Demands

The TrueComp suite provides a flexible system that users can easily maintain and modify to align either direct or indirect sales compensation with corporate goals and shareholder value. For more background on Callidus, see Enterprise Incentive Management Leader Responds to Market Demands.

The idea behind TrueComp's initial design was for it to be sophisticated enough to tackle and manage the most complex and variable compensation plans, and yet simple enough to administer without heavy reliance on information technology (IT) resources.

To that end, Callidus's products are based on its proprietary TrueComp Manager rules engine, which is implemented on the scalable TrueComp Grid computing architecture. This technology offers customers the functionality and flexibility of a rule-based architecture coupled with the scalability and reliability of grid-based computing. The products are Java 2 Enterprise Edition (J2EE)-based, enabling efficient implementation on multiple operating systems, and are designed to be operated by business users and compensation professionals rather than IT administrators. Callidus's product suite also features user-defined security combined with a complete audit trail, allowing for reduced errors in incentive compensation, enhanced trust and confidence between operations and finance personnel, and more effective investment in incentive compensation programs.

The Callidus core TrueComp application consists of four principal modules:

  1. the TrueComp Integration application collects and integrates the different data feeds used to compile applicable sales data, since most enterprises have sophisticated IT infrastructures composed of many disparate systems including enterprise resource planning (ERP), customer relationship management (CRM), sales force automation (SFA), supply chain management (SCM), and even internally developed proprietary solutions.
  2. the TrueComp Repository application serves as the database.
  3. the TrueComp Manager application serves as the user interface (UI) to set up compensation rules, run queries, and make manual adjustments.
  4. the TrueComp Grid application is Callidus' proprietary computing architecture.

The TrueComp suite's modular, structured approach to defining compensation plans avoids the reliability and maintenance issues associated with internally developed legacy solutions. The application enables systematic administration over a high volume of transactions and varied compensation plans that are not attainable when using manual methods. The TrueComp suite guides users through the process of paying variable compensation via a graphical and intuitive rule editor, and does not require compensation analysts to have coding or scripting skills.

The original TrueComp application was initially shipped in the second quarter of 1999, and to date has accounted for a substantial majority of Callidus's revenue. In late 2005, Callidus introduced TrueComp Enterprise 5.0, which included, for the first time, enhanced modeling capabilities, quota management features and guides, and a new, simplified interface for compensation administration. With TrueComp's new modeling capabilities, the impact of new incentive rules can be modeled and analyzed, whereby scenarios can be used to compare, plan, budget, and forecast compensation costs for future periods. Additionally, a new quota management workspace should enable users to distribute quotas across the sales force more quickly and efficiently. To take the pain out of compensation plan administration, TrueComp also brought another innovation to enterprise incentive management (EIM)—new easy-to-use guides, which are powerful wizards that aim to make everyday compensation administration tasks simpler and faster.

TrueComp Enterprise Major Applications

TrueComp Enterprise is comprised of three major applications that comprehensively automate incentive compensation business processes for major companies in all industry sectors. In addition to core TrueComp, these applications are TrueInformation and TrueResolution. TrueInformation is the reporting component of the TrueComp Enterprise solution, and serves to distribute goal and achievement information to the extended enterprise. Basically, it is a self-serve, scalable Web-based production reporting application for incentive compensation systems throughout an organization.

Seamlessly integrated into the Callidus Portal, the TrueInformation software provides sales and incentive reporting capabilities (information dissemination) via the Internet to the sales force, finance personnel, and business partners (dealer networks, brokers, and channel) of a company. It allows them immediate access to personalized pay-for-performance information, and a more accurate view of their personal or team sales performance. In circulating timely and accurate compensation information throughout the enterprise, the software aids in creating trust and confidence between operations and finance personnel. This should not only improve morale and operational results, but also reduce the occurrence of errors that increase the costs of incentive compensation.

The TrueInformation application includes date-effective organizational, positional, and title-based security that allows for appropriate controls on dissemination of sensitive compensation data. It is accessed through an intuitive Web-based interface that offers ease of use throughout the organization. It supports the deployment of new sales strategies and offers out-of-the-box organizational security, pre-built template reports, and the ability to adapt to and reflect organizational change. As a result, sales and channel partners should be confident they are receiving accurate credit for their sales performance. The original TrueInformation application was initially shipped in late 2002.

The Callidus TrueResolution software is a rule-based application that aims at streamlining and automating the resolution of incentive compensation disputes, thereby reducing the associated cost and diversion of management and sales resources. Scalable for the largest sales channel organizations, the application eliminates manual, error-prone sales operation processes and allows dispute resolution to be initiated from the field where the majority of disputes originate. The software automates functions such as changes, transfers and splits to territory assignments, quota adjustments, organizational changes, and payee information updates.

The TrueResolution application also enables sales professionals and business partners to submit and track their claims through a web-based self-serve workflow process, which should automate the evaluation, routing, resolution, and approval of day-to-day requests, and consistently communicate payment and resolution status to sales people. It allows sales professionals to request updates to such compensation data as sales credit, quota, and organizational changes, with compensation issues being resolved in a fraction of the time compared to manual, e-mail, and telephone-based systems, and with near complete accuracy. As a result of faster dispute resolution and increased trust in the compensation system, the sales force should be able to focus on closing business and not spend valuable time worrying about their compensation. What's more, the TrueResolution application keeps management informed of changes that may affect compensation, produces an audit trail for all requests and resolutions, reduces errors and the risk of fraud, and helps to promote enterprise policies. The application was first shipped in early 2002.

The Latest Product Introductions

Early 2006 saw the introduction of Callidus TrueAnalytics to the market. A new component of the TrueComp Enterprise suite, this application should offer sales, marketing, and finance executives and analysts the strategic insight and ad hoc analysis capabilities they need to drive sales performance. More specifically, as the system of record for sales and channel compensation, the TrueComp Enterprise solution is a source of sales performance information. The Callidus TrueAnalytics solution should then transform that information into strategic knowledge and insights that can be used to drive business to higher levels of performance and profitability. With such analytical software, organizations can further benefit from the valuable information within the TrueComp EIM suite of applications, and can combine it with other information to provide analytic dashboards, key performance indicators (KPIs), management reports, and ad hoc analysis.

Callidus TrueAnalytics software consists of graphical dashboards that can be configured to enable sales, marketing, and compensation professionals to monitor, analyze, and explore multidimensional elements including sales performance by region, team, product, or channel; customer growth; and sales incentive costs. Also available via such dashboards are focus and analysis of trends in business performance and product success by channel or segment; channel effectiveness; compensation plan effectiveness; attainment distributions, and many more critical business performance measurements. With such information, organizations should be able to quickly identify opportunities that will drive customer, product, geographic, and channel performance using new incentive plans, as well as analyze and optimize incentive spending and key profitability measures. Rapid insights into key issues are provided by exception variances, automated alerts, and personal indicators, which should all result in increased business agility and better decision making on how to drive revenue and grow profits. Upon receiving a performance exception alert, a user of the Callidus TrueAnalytics module can drill down to specific information and investigate. The product benefits from the TrueComp Datamart (the platform for sales and channel compensation) and delivers key benefits across sales, marketing, and finance functions.

Callidus recently announced its roadmap for future products which include producer administration (to address the challenges particular to the insurance industry), quota management, and service oriented architecture (SOA) offerings to connect to legacy systems of record. To that end, on October 31, 2006, the vendor announced that it has joined the business performance management (BPM) software leader, Hyperion's Global Partner Program, as an original equipment manufacturer (OEM) partner. As a partner of Hyperion OEM, Callidus will leverage the Hyperion System 9 Planning software for its new quota management software to answer the strong market demand. The solution aligns quota goals with business objectives to drive corporate performance, and the new offering applies to a broad range of industries including financial services, communications, life sciences, and high-technology.

Managing sales quotas in today's enterprises is an extremely complex, time-consuming, and costly endeavor. Businesses typically rely on manual processes with limited analytics tools and insufficient data to manage quotas, making it difficult to adjust them to changing market conditions or organizational realignments. As a result, inaccurate and inconsistent quotas are set that fail to align with the sales force's needs or the company's overall business objectives. Accordingly, Callidus Quota Management aims at taking the guesswork out of quota creation and management by enabling sales and finance executives to pinpoint and assign quota targets based on multi-dimensional analysis of historical sales, territory potential, growth, and quota performance data from the TrueComp Datamart. This should ensure that the right quota target is created for the right sales executive, in the right territory, and at the right time.

By using the Callidus Quota Management solution, enterprises will be able to build multiple top-down and bottom-up quota allocation scenarios, and compare them fairly easily through side-by-side views. The software automates quota processes with business rules and workflow processes, and communicates quotas and attainment across the entire organization through Web-based views and reports. Callidus Quota Management integrates seamlessly into Callidus' TrueComp solution, allowing final quota targets to be exported directly from Callidus Quota Management into TrueComp, thereby providing a more comprehensive sales performance solution offering.

Callidus claims the following potential benefits for customers:

  • Alignment of corporate business goals and revenue plans with quota targets to drive better corporate performance
  • Reduction of the quota setting process from months to days
  • Freeing up of sales management's time to focus on meeting quarterly goals and driving revenue
  • The building of trust within the organization that comes from using a transparent, automated system
  • Improvement in the morale and motivation of the sales force
 
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