Banking Webinar - Combined Content 071413(notes)

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


Agenda

§ Incentive Compensation in Banking– Risk and Compliance– Financial Performance– Technology

§ Huntington Bank Case Study– Vendor Selection– Phase I– Phase II– The Future


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


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.


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


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


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. >


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


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


256 – Commission

Expense Process

Weekly Compensation

- Weekly Reconciliation Files- Weekly Producer & Agency Files

- Monthly NamecodeFirst of Month Feed of Results

302 – GEMS 2


326 - ESD


Monthly DI, LTC, Multi-Life


- 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


Slide 14

Gartner MarketScope for Sales Incentive Compensation Management (2010)

Impact of Improving Technology


The Effect of Compensation Errors

$400 millionVariablecompensationspendperyear

0.5%overpayment

$2Million

1%overpayment

$4Million

3%overpayment

$12Million


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


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


Agenda

§ Incentive Compensation in Banking– Risk and Compliance– Financial Performance– Technology

§ Huntington Bank Case Study– Vendor Selection– Phase I– Phase II– The Future


Customer Interviews

POC

It Started Like Any Other Project

Vendor Selection

DemosRFPBusiness

case


And Then…The Project Started

§ Phase I

§ Organizational Restructuring

§ OpenSymmetry

§ Phase II

§ The Future


§ 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


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


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


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


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


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


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


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


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


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


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


Thank You


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!


Questions & Answers

Luke MarciniakOpenSymmetryProject [email protected]

Brad BurnamanIBM Cognos Sale Performance ManagementSPM Industry [email protected]

Banking Webinar - Combined Content 071413(notes)

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Transcript of Banking Webinar - Combined Content 071413(notes)