IBM Sales Quota

 

 

Gold Stevie Award Winner 2017, Click to Enter The 2018 Stevie Awards for Sales and Customer Service

Company: IBM, Armonk, NY
Company Description: IBM is a values-based enterprise of individuals who create & apply technology to make the world work better. Today, more than 377,000 IBM employees around the world invent and integrate hardware, software and services to help forward-thinking enterprises, institutions and people succeed on a smarter planet.
Nomination Category: New Product & Service Awards Categories
Nomination Sub Category: Sales Automation Solution – New

Nomination Title: IBM Sales Quota: End to End Automated Quota tools – Enabling quota targets assignment to IBM sellers in automated and transparent way.

Tell the story about this nominated product or service (up to 650 words). Describe its function, features, benefits, and sales to date:

Up until 2015 we did not have a standardized process or tool for assigning sales quotas. Each region would assign quotas using their own process, duplicating efforts and requiring more resources. But the major drawbacks were the inability to understand the lumpiness of customer buying behavior, and the ability to map quota to market opportunity causing discrepancies in quota allocations, poor sales performance and finally unnecessary attrition of the sales force.

The Global Quota team’s objective is to increase sales morale and reduce top performance attrition. Its role was to assess the impact of seller quotas on these objectives. The research indicated improved performance when quotas were better aligned to client and market opportunity.

With the collaboration of Sales, Finance, CIO and Research teams, we have achieved the following:

- Designed an interlock process between Finance and Sales Management which drives the alignment of quota to resources ensuring the highest rate of business success
- Developed a set of analytics based models which better align quota to opportunity
- Simplified and automated the conversion of the financial budgets to a commissionable quota
- Increased productivity for both Finance, Sales and Sales Operations

- Use of technology in the end-to-end quota process
- Financial budget alignment & interlock.

The ability to effectively and efficiently set revenue targets across the sales organization is critical to the brands achieving its revenue targets within IBM and a key driver of revenue growth and profitability.

Therefore, Global team has developed and deployed web-based sales targets setting tool that uses analytics to propose targets break-out. The target setting model is based on a combination of statistical prediction algorithm for achievable revenue and an optimization model that take into account:

- historical data by account
- external or internal view of customer future buying propensity
- backlog runout based on services contracts signings
- Most recent IBM sales organizational structure (territory/client accounts)

The targets are used as the start point by Brand General Managers and Client Executives in each region around the world to interlock and align quota to opportunity as well as ensures control totals tie to F&P annual budget. Once the targets are final, they are used into the quota calculation and allocation to sales managers and sellers.

Quota calculation & allocation.

We learned that the primary challenge of quota allocation consisted in having the most recent sales territory and client structure information to allocate the quota to sales managers and ultimately to their sellers. The allocation and deployment used to be done in excel spreadsheets that, among other issues, generated long processing time, technical issues with macros, and most importantly lacked of transparency – difficulty to understand the underpinnings behind the quota amount which generated satisfaction and performance issues from salesforce.

The tool provides a user-intuitive web interface and calculates commissionable revenue, allocating it based on sales territory and different measurement elements depending on the sales job roles. It runs in IBM's BlueMix cloud platform that increases application scalability and performance with on-demand network access that permits real-time updates and gains on processing speed.

Sales Managers can update their territory information in the tool which automatically re-assigns quota considering the updated territory. When the Managers finish their sellers’ allocation, the tool creates a draft of the Incentive Plan Letter to be sent to each seller. The manager has just to review the information and click on a button to submit it. Sales team spends less time with back-office activities investing more time with clients.

Benefits and feedback from the geographies:

Productivity - Delivered 30% productivity to the operational process: 3-4 weeks of savings out of 3 months;
Visibility & Transparency – provides sales leaders and sellers with greater visibility into the figures and logic behind targets and quotas;
Simplification – fewer steps, with less people touching the process;
Consistency – consistent across geographies, making it easier to provide support;
Insight –greater insight into actual business opportunity (analytical model).