Clearion Software

Click to edit Master subtitle style -- Group 7

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Headcount & Quota Allocations

Comparing all regions and expecting them to achieve the same levels of revenue per unit is not sensible; and its not practical. Federal Region, which concerns its activities with mostly the Govt will tend to have longer sales cycles and complications like licensing. (Unlike East & West where they had quick and nimble high technology enterprise wide clients) Lead to dissatisfaction However; Since East & West typically dealt with the same customers; they could have similar targets.

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RANK 1

Ranking PERSON
Cheng

REASON No major changes made. The %tage of headcount allocated is also much greater than the targeted growth rate. Target reduced & headcount increased A drastic change in the way inside sales force is allocated. Difficulties could be faced. Uses a lot of shared resources which will be counted from now on. Also division into a new territory; will face some resistance to that

2 3 4

Chapas Jacoby Dreyer

Hall

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Can Jacobys model for allocating headcount and quotas equitably account for realistic new hire productivity levels and still accelerate hiring times?

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Profitable Investment
Region H1 targets (mn) 38.2 45.1 2.8 6.3 New Headcount Additional Incremental quota revenue per new allocated headcount unit (mn) 6.2 5.5 0.3 -0.7 0.31 0.196 0.06 East West Latin America Federal 20 28 5 8

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East v/s. West

Should be equally profitable as the customer profile is more or less the same As per new allocation

The revenue per unit for east region should be 0.19

To be as profitable as west east must achieve 41.8 mn revenues instead of 38.2 mn. with headcount of 220 units

Or with revenues fixed at 38.2 mn, the headcount should be reduced to 202.

East needs to improve on revenue per unit to be as profitable as west

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Rank
1. Chapas (Federal Region) 2. Hall (west region) 3. Cheng (Latin America)
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Analysis
In H2 2005 revenue per unit was 0.11 - even with 20% lesser revenue per unit, targets will be achieved (accounted for new hires) To achieve targets will have to achieve 0.19 RPU - vast experience , previous track record favors him
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In H2 2005 RPU was 0.13 - can achieve targets with 10 % lesser RPU as compared with last year but large % of new hires will bring down RPU
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4. Garton (East)

In H2 2005 RPU was 0.16 - to achieve target RPU should be increase to 0.17 (with 20 new hires this will be difficult) - engaged in Lobbying, gaming etc.
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5. Mellisa

Depends on achievement of others - East & Latin america are unlikely to achieve quotas (may be compensated by overachievement by west)
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6. Jacoby (VP) 8/28/12

New-hire Productivity Levels

The new model will definitely accelerate the hiring times

Region

H1 2006 New Total RevenueRevenueExpecte targets Headcount Headcount s/unit s/unit d RPU (mn) H2 2005 H1 2006 for new (targets) hires

East West Latin America

38.2 45.1 2.8

20 28 5

220 242 24

0.16 0.19 0.13

0.17 0.19 0.12

0.31 0.19 0.06

Federal 8 72 0.11 0.09 0 Assumption: 6.3 Existing manpower operates at same levels of revenue per unit New hires productivity is taken to account only for Latin America & 8/28/12 Federal

Designing Quotas

Quotas must include 3 parameters

Sales in terms of volume Activities carried out to achieve sales Financial aspect (profitability)

Quotas should be judged on profitability

Costs (no. of units) employed to achieve quotas must be considered Employing excess resources to achieve quotas is not sustainable for long term

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Adjustments in model

The model is too objective

There is no factor accounting for dynamic changes in the market if any

RPU for the new hires must be accounted for in the initial period

Activities carried to achieve sales should be accounted for in some way while designing a quota

In case of federal, since the sales cycle is long

Some other parameter like no. of calls (activity based ) can be used to assess performance of sales people Sales people can be compensated basis on yearly sales quota achievements

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Hiring Policy

Advantages of

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Goal-Setting Process
Americas region contributed to

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