banking webinar - combined content 071413(notes)
TRANSCRIPT
Managing a Multi-phase Implementation of IBM Cognos ICMPresented by
Luke MarciniakProject Manager OpenSymmetry
Brad BurnamanIBM Cognos SPMIndustry Solutions
and
Moderated by: Laura RoachCMO, OpenSymmetry
Data…
Data…
Data…
©2012 IBM Corporation©2012 IBM Corporation
Luke MarciniakProject Manager
6+ years in the Sales Performance Management Space
Introductions
Brad BurnamanCognos SPM Industry Solutions
13 years in Incentive Compensation and Sales Performance
©2012 IBM Corporation©2012 IBM Corporation
Agenda
§ Incentive Compensation in Banking– Risk and Compliance– Financial Performance– Technology
§ Huntington Bank Case Study– Vendor Selection– Phase I– Phase II– The Future
©2012 IBM Corporation©2012 IBM Corporation
Agenda
§ Incentive Compensation in Banking– Risk and Compliance– Financial Performance– Technology
§ Huntington Bank Case Study– Vendor Selection– Phase I– Phase II– The Future
©2012 IBM Corporation©2012 IBM Corporation
Risk and Compliance
6
Incentive compensation at banks has faced changing regulatory conditions and increased scrutiny on compensation practices •Reduce risk amidst increased regulatory oversight (e.g. Basel, Dodd-Frank)
•Balance risk mitigation and growth motivation
•Need for increased audit tracking and improved record keeping
•Desire for scenario modeling capabilities
©2012 IBM Corporation©2012 IBM Corporation
Risk and Compliance
► Workflow based on approval levels
► Exception reporting
► Comprehensive audit trail
CONTROLS & WORKFLOW
REGULATORY REPORTING
HANDLING DEFERRALS & CLAWBACKS
SCENARIO MODELING
► Understand comp spend at different future economic conditions, loan defaults rates, etc.
► Per Basel Accord and U.S. Federal Reserve…
► Payment of awards should be deferred so that the payments can be adjusted as risks arerealized or become better known
► LCBOs will need to submit reporting 90 days after each fiscal year – regarding their plan summary, process, governance, and how theirplan deals with minimizing excessive risk-taking.
©2012 IBM Corporation©2012 IBM Corporation
Improve Financial PerformanceIncreasing the bottom line is a common business driver for many different business decisions, including incentive compensation•Align individual production and organizational financial performance
•Drive cross-selling
• Increase consistency of practices across the organization
©2012 IBM Corporation©2012 IBM Corporation
Align Incentives With Corporate Goals
< Canadian Bank >
§ Bonus for bundling multiple key products together (e.g. mortgage along with insurance)
§ Recognizing cross-selling new product families to their customers (e.g. first long-term debt product for that customer/ household)
§ Rewarding employees for referring customers to another employee/BU
©2012 IBM Corporation©2012 IBM Corporation
Institute a Culture of Selling
“Our industry historically has generated a long line of order-takers”
“Cross-sell ratio has gone from 2 to 5.66”
Executive Vice President, Retail Sales
< Retail Bank in U.S. >
©2012 IBM Corporation©2012 IBM Corporation
TechnologyKey reasons technology drives companies to change incentive compensation solutions• Integrate disparate compensation and performance systems
•Lower system maintenance costs
• Improve responsiveness in an uncertain economic environment
•Reduce error rates caused by system complexity
©2012 IBM Corporation©2012 IBM Corporation
An All Too Common Scenario
12
©2012 IBM Corporation© 2013 IBM Corporation
A better example?
312-UCLA317 – FAS
Daily Producer dataDaily Reconciliation file
Daily Agency dataDaily Terminated writing codes
302 – GEMS 19
286 – GEMS 13
Direct tableAccess of producer info
- Producer & Agency Shared Tables- Monthly FR Stmt- Annual FR Territory File- 1099 File
286 – Agent EAP
Monthly Results FileAnnual Results File- Producer & agency
Shared tables- Shared VFC tables
402 - Zeus
603 - CLOAS
605 - HAS
304 - Unity
201 - BARS
308 - LCS
315 - NBT
200 – Transcend /
SAMS
307 - Leverage
612 – Money Mgmt
Extract file for Joe Carlton
955 – MMCS
258 – Agency
Accounting
330 – Agency Paid For / AMR
Backup File
8035 – Clubs & Awards
DistributionAlliance File
- Daily Producer Info- Xref File- Monthly GA & Preferred Files- Monthly FR Stmt- Berkshire Run-off- GA Contract Eligibility- Active & Terminated Agents- Preferred Leaders Club
AC02 – LRC
Producer TableProducer Results
2 Compensation History Integration Files
PayrollSalary Adjustments
253 – FR Comp
Direct table accessFor LRC results
FR History Spreadsheets
Daily Trans
Daily Trans
Daily Trans
Daily Trans
Daily Trans
Daily Trans
Daily Feed of Payroll adjustmentsMid-month Feed of Payroll adjustments
Monthly reconciliation feedPowerstack Adjustment UI
Daily Adjustments
Daily IV Phase Files
Daily PowerstackAdjustments
Daily PowerstackAdjustments
H04 Table
LRAS
NY Ref TableFor Max Life Premium
- Berkshire FormNumber Xref- Product List for QRS FP- Fictitious PA Codes Xref (needed for term rider)- Accounting Codes for PS - Product Issue Age Xref- DA Cluster (config & product rates)- QRSS Codes- Mid-month Roscoe Adjustment Files- CDM No Manager File- Partial Vesting Options File- Health Persistency Xref- 1099 Merge File- 1099 Guardian Payer File- 1099 Delete File
Daily DI/LTC TransactionsMonthly Terminated FRs
Monthly NameCodeMonthly Converted FRsDistribution Alliance Xref
FR Persistency InfoFR Anniversary Calcs
Leaders ClubFile Access
Daily Schedule ADaily Primary/Secondary Agency Xref
Monthly FR Statement
AC01 – APR Agent
Productivity & Retention
- Monthly extract ofProducer comp- Monthly extract of terminationsAnd appointments
AC03 – Recruiting &
Retention
Daily New &Terminated
Producer Data
- Daily Extract of FR Results- Annual Extract of FR Results
Daily Primary/Secondary Agency Xref
Daily Primary/Secondary Agency Xref
Producer & Agency shared tables
306 – Integrated Illustration
Daily Agency & Producer data
AC4 - GDW
FR Comp Daily
- 10.98.200.73 File includes SSN- Extract for Joe Carlton- HCSP Extract- GEMDWNLD Extract
Daily extractMonthly extract
Producer & Agency shared tables
Producer & Agency Shared Tables
328 – Actuarial Paid For
Producer & Agency Shared Tables
256 – Commission
Expense Process
Weekly Compensation
- Weekly Reconciliation Files- Weekly Producer & Agency Files
- Monthly NamecodeFirst of Month Feed of Results
302 – GEMS 2
Monthly FR Statement
326 - ESD
Monthly FR Statement
Monthly DI, LTC, Multi-Life
Producer & Agency Shared Tables
- Producer & Agency Shared Tables- Annual YTD Premium
316 – GA Admin / GA
Contract
Monthly Producer DataMonthly Agency ResultsMonthly 1% Renewal File
YTD RenewalPersistency Results
Monthly NameCode
100 – PeopleSoft
GL
Monthly accountingMonthly checks
Monthly Agency History
Bi-monthly Payroll
- Monthly Inventory File- Monthly Life PD File, PFStat, FR Pren
Monthly FR Income ContinuationMonthly FR salary adjustments
280 - EFT
948 – PCA(units)
321 – Guardian University
964 – GA 1099
863 – GA Firm
Valuation
254 – Agent Comp Model
Monthly CompResults
PVO ProducerEligibility
Producer & agencyShared tables
132 - CCDB
- Daily Trx.- MTD Trx.
- Daily Trx- MTD Trx
- Inforce Counts for Persistency
Daily Life extract
- Monthly Inforce File- Monthly C&A Results
- Monthly Inventory File(Berkshire)
Monthly PF Stat
Monthly PF Stat
Monthly PF Stat
Monthly PF Stat
Monthly DI Inforce
MTD Life Inforce
Monthly Life Inforce
- MTD Trx- Daily Trx
- Persistency Info
- Persistency Info- InForce Info
- FY Lives- Persistency Lives- Berkshire Inforce
- Extract for Joe Cox Reporting
Service Fees
Milliman
GA Retirement Data- Roscoe File- Distribution Alliance File (DART)- Product File
Daily Trx
Pre-merger FileDaily Changes
- Product File- Form Number File- ValdRules File- File Header Layouts- Leaders Club Combine- Bonus Credit Product File- Producer SSN Xref- 10 Threshold Files (1 for each program)- MDRT product files- APR Requirements- Dummy Records for Initialization
Net APR
Middle Mgr File
Joe Cox Files- Middle Mgr File- IUS File- Leaders Club Files- Production Credit File- Pending Production File- Agency Recognition File- Backups of all input files
- Innovative Underwriter File- Berkshire Bypass File- Monthly Adjustment File
DI Inforce
Equity GIAC
Steetscape - RIA
Asset MgmtFees
706 – Group Pension
Comp Sys.
214 – M&O
251 – Consolidated Commission
AgencyDatabase
281 – HO Bills
802 – Agency
Commission Download
803 – Terminal Equity
622 – Agency
Agent Comp
620 - DataEase
AC27 - 588 Special
Premium
Daily Trans.
Agent Data
645 - Alchemy
648 – Agency Sales
Record
625 – HR Field Payroll
700 – OmniPlus
Recordkeeping System
111 – Recon Plus
637 – PAS Chase Bank
Transfer
617 - Paybase
113 – CheckFree
1099
-
606 – HCCH (Health Claims
History)
909 – UCV Client
Manager
257 - SmartOffice
©2012 IBM Corporation©2012 IBM Corporation
Slide 14
Gartner MarketScope for Sales Incentive Compensation Management (2010)
Impact of Improving Technology
©2012 IBM Corporation©2012 IBM Corporation
The Effect of Compensation Errors
$400 millionVariablecompensationspendperyear
0.5%overpayment
$2Million
1%overpayment
$4Million
3%overpayment
$12Million
©2012 IBM Corporation©2012 IBM Corporation
Poll Question
16
What is the primary driver for your interest in Incentive Compensation Programs?
A. Reduce Risk and Improve Regulatory Compliance
B. Manage Financial Performance
C. Improve Technology and Responsiveness
D. Something else
©2012 IBM Corporation©2012 IBM Corporation
Huntington Bank Drivers“We knew it was time to rethink our approach to compensation
management. Our CEO wanted to be able to compare sales performance against incentives paid across the whole business. Achieving this level of transparency with our home-grown legacy systems was difficult. Moreover, the systems were becoming increasingly costly to maintain, and the lead time for our IT team to deploy updates when we wanted to make a change to one of our compensation schemes hindered our ability to respond quickly to the sales environment. We realized that moving to a single central compensation management platform could address both of these issues.”
Barbara WeigelVice President, Huntington Bank
©2012 IBM Corporation©2012 IBM Corporation
Agenda
§ Incentive Compensation in Banking– Risk and Compliance– Financial Performance– Technology
§ Huntington Bank Case Study– Vendor Selection– Phase I– Phase II– The Future
©2012 IBM Corporation©2012 IBM Corporation
Customer Interviews
POC
It Started Like Any Other Project
Vendor Selection
DemosRFPBusiness
case
©2012 IBM Corporation©2012 IBM Corporation
And Then…The Project Started
§ Phase I
§ Organizational Restructuring
§ OpenSymmetry
§ Phase II
§ The Future
©2012 IBM Corporation©2012 IBM Corporation
§ Project Scope– 300 Payees– 15 Plans– 16 Presenter Reports– 20 Web Forms– 34 Data Feeds– Complex Crediting and
Eligibility Rules– Complete Incentive Data
Mart/ETL Build
§ Project Team– 2 PM’s: Varicent/HNB
– 2 Full time HNB IT resources + 3 contractors
– 1 Full time business segment resource
– 2 part time HNB Incentive Admin team resources
– 4 Varicent consultants
Phase I – Project Profile
©2012 IBM Corporation©2012 IBM Corporation
Top 7 Sales Compensation Improvements Requested
22
83%
83%
69%
66%
62%
59%
55%
Improve reporting to the sales force
Improve reporting to management
Improve service to the sales force (to provide a quicker response to inquiries)
Improve administration productivity
Increase credibility with the sales force & management
Improve payment accuracy
Ease the creation & tracking of adjustments
Source: 2012 SPM & Technology OpenSymmetry Survey Results
©2012 IBM Corporation©2012 IBM Corporation
Change Management
§ Organizational Change§ Goal of a Future Mode of Operation (FMO)
– Staffing models– Production support
– Future phases
§ Training/Communication Strategy– Payees/Managers– Business sponsors and management
– Future segments
©2012 IBM Corporation©2012 IBM Corporation
Organizational Change
Recognized need for expertise in
compensation organization structure
Recognized need for future state planning
Recognized need for custom training
Engage an SPM partner to assist
How to Execute
Where does your Sales Comp Sit in your organization?Sales…Finance…Sales Support…Human Resources
©2012 IBM Corporation©2012 IBM Corporation
OpenSymmetry Overview
§ Global experts in Sales Performance Management headquartered in Austin, TX with offices in 7 countries
§ Service Offerings:– Strategic Services
– Implementation
– Training
– Testing
– Managed Services
§ Why OpenSymmetry?– We deliver value added consulting
– We partner with you, it’s all about teamwork
– We can provide independent advice
– We deliver successful results, whatever the challenge
©2012 IBM Corporation©2012 IBM Corporation
OpenSymmetry Partnership
§ Side-by-side player/coach with customer team
§ In-depth knowledge of IBM Cognos
§ Organizational assessment/staffing needs
§ Future Mode of Operations (FMO) Playbook
§ Training
§ Testing
©2012 IBM Corporation©2012 IBM Corporation
Phase II – What did it include?
§ 3 Business segments– Call Center
– Branch and in store channel
– Business banking
§ Project Scope– 5,000 Payees
– 48 Plans
– 2,000 Calculations
– 300 Tables
– 45 Data Feeds
– 30 Reports
– 20 Webforms
©2012 IBM Corporation©2012 IBM Corporation
Phase II - Scope
§ Complete redesign of incentive plans for 2013– 90% rework of IBM Cognos calculations already complete and
implemented for the call center
– 100% rework of Phase I presenter reports
– 10 new or redesigned data feeds
– Design considerations for building 2013 on top of 2012 plans in production
And…Go Live in 7 Months
©2012 IBM Corporation©2012 IBM Corporation
Phase II – How did we do it?
§ Pre-project on site player/coach activity with customer and OpenSymmetry
§ Global OpenSymmetry resources
§ Dedicated customer project team
§ Dedicated IT Staff with augmentation
§ Team Profile included: 3 PM’s from key stakeholders: IT, HR Incentive Team, OpenSymmetry
§ Business segment participation
§ Dedicated Customer Incentive Team Resources, QA and UAT teams
©2012 IBM Corporation©2012 IBM Corporation
Phase II – Smart Project – turned challenges into Success
§ Leveraged existing integration and reusable components while keeping integrity of system
§ Requirement gathering approach
§ Volume of requirement documentation
§ Reduced learning curve of client and OpenSymmetry team
§ Large team with independent assignments
§ Use of standard testing methodology across team
§ QA team with limited experience in SPM tool
Identified challenges early and turned them into strengths
©2012 IBM Corporation©2012 IBM Corporation
Leverage experts internally and externallyStaff and train project effectivelyGet early and often buy-in/feedback from key stakeholdersGenerate excitement – “Who or What is next?”Planning for the future phase – use a pre-discovery questionnairePlan for the future and continue to evolve
Tips for Future Projects
©2012 IBM Corporation©2012 IBM Corporation
Thank You
©2012 IBM Corporation©2012 IBM Corporation
Thank You
Take the OpenSymmetry SPM and Tech Survey! Direct Link at: bit.ly/157TqIu
Or go to www.opensymmetry.com and click on banner
Participants receive a free copy of results!
©2012 IBM Corporation©2012 IBM Corporation
Questions & Answers
Luke MarciniakOpenSymmetryProject [email protected]
Brad BurnamanIBM Cognos Sale Performance ManagementSPM Industry [email protected]