How Does Your Enterprise Manage Incentives?

By Malcolm Fleschner

Recently executives at Blue Cross Blue Shield of Florida (BCBSF) faced the daunting task of restructuring the 17 different compensation systems that had cropped up across the organization. The unwieldy set of systems required intensive manual processes with multiple touch points to maintain; as a result the accuracy of the systems was compromised and the costs of funding and maintaining the systems had become prohibitive.

In search of a strong dose of aspirin for such a bureaucratic headache, BCBSF turned to Callidus, a leading Enterprise Incentive Management (EIM) solutions provider. Callidus vice president and CMO, Shanker Trivedi, identified some of the key issues facing BCBSF in continuing with the status quo.

“With the existing system even small changes to comp plans and organization structures were cumbersome and costly,” Trivedi says, “and the systems simply lacked the flexibility to make quick changes and adapt and implement new strategies. A detailed reporting system was also not readily available.

“Fundamentally, BCBSF needed a solution that could improve the management and administration of commissions and reduce the risk exposure associated with commission errors and overpayments, decouple commissions from medical cost inflation, establish incentives to drive the business corporate objectives and enhance channel partner performance and morale.”

The agreed-upon solution was TrueComp, a Callidus program that is able to process more than 60,000 transactions per month and provide BCBSF’s compensation managers with an entirely new licensing and appointment system.

“It also provides tools to effectively drive sales performance, and promptly adjust plans to meet changing market requirements to ensure accurate, real-time delivery of payouts and results,” Trivedi explains. “BCBSF also benefits from greater visibility into agent and broker sales behaviors enabling faster, more dynamic business decisions to improve performance and align business activities to corporate objectives. In short, using TrueComp, BCBSF has a fast and flexible system that can respond quickly to market trends, a far more accurate compensation and incentive system where commissions errors and overpayments are no longer a significant problem and the robust audit and control capabilities required in complex compensation environments.”

TrueComp is currently the preferred EIM solution for a number of Fortune 1000 companies in industries ranging from life sciences and insurance to banking, manufacturing and telecommunications. With regard to pharmaceutical companies, Trivedi says, sales representatives are typically offering more products to their sales targets but spending less time with each physician. As a result, reps have to continually sharpen their go-to-market strategies and deepen their knowledge of each medication while learning how to communicate the benefits more clearly. This is where a solution like TrueComp can play a role, he adds.

“Using TrueComp, Callidus customers report that business is executed faster and more effectively, including faster incentive ‘time to market’ to promote new products and services, additional focused selling time among the sales force and increased mindshare with broker channel and dealer networks,” Trivedi says. “TrueComp’s effective use of incentive compensation budget dollars maximizes market potential, including motivation and morale improvements in salespeople, better visibility into sales performance, reduced cost of sales and more effective use of targeted incentives. Finally, TrueComp customers report that incentive compensation productivity is vastly improved, eliminating errors, payment redundancy and administrative systems previously necessary to support inefficient compensation processes, as well as improved financial predictability and better use of staff for value-added business processes.”