Solutions for Variable Compensation Management

Transcription

1 Solutions for Variable Compensation Management

2 In the US 7% of all exempt employees participate in incentive plans-the trend is to extend the reach of such incentive plans to lower level employees, Comp & Benefits Review, Sept/Oct 96 All told, Amdahl was spending more than $900,000 annually to maintain and program compensation systems that couldn t keep up with the business. CIO Magazine, 4/1/97

3 For the Three Months Ending 9/97 Cadence Spent Spent 6% of Revenues on F&A, Accounted For by SAP. For the Three Months Ending 9/97 Cadence Spent 10% of Revenues on Sales Compensation, Accounted For by Excel!

4 TallyUp Software is: Revenue Profit Clear Value Proposition $2 Billion Market Best of Breed Supplier State-Of-The-Art Applications Design. IPO 3 Years $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 ($5,000)

5 Reed Taussig, President and CEO Founder and President, inquiry.com inc. SVP Sales and Marketing, Gupta Corporation SVP Worldwide Operations, Unify Corporation Andy Swett, Founder and VP Technical Services Private Consultant, Database Architect. Scott Kitayama, Vice President Marketing Sybase, Verity, Ingres Rob Gillette, Vice President Engineering SVP Engineering and CTO, Shoppers Express Dir. Methods and Tools, Sybase

6 Sales Compensation Solution Executive Management Finance & Sales VPs Finance & Sales Ops Sales and Sales Ops Finance & Sales Ops Set Strategy & Objectives Any/All Data Determine Metrics Financial Accounting Order Entry Define Sales Comp Plan Implement, Communicate, Execute Plan TallyUp Report & analyze results Variable Compensation Automation Strategic Planning Functional Execution

7 UI Client TallyModel TallyCentral Intranet TallyBoard Java Win95 Server Applications TallyServer TallyMart Oracle, Sybase, MS SQL Server UNIX WIN NT System Interfaces Financials Intranet HRIS Payroll SFA UNIX WIN NT

8 Cutting Edge Technology Rules Based- ND Elements Engine Fully Object Oriented Written in Java Unix and NT Implementation Supports: Oracle Sybase SQL/Server Full ERP Integration with: SAP, Oracle Financials, Baan

9 TallyUp Target Customer: CFO and Director of Compensation Operational Benefits Accruals Audit Trail Financial Modeling and Reporting Cost Savings Vice President Sales and Sales Management Performance Reporting Resource Management Top Line Performance Management

10 $2 Billion Dollars Sales Compensation Administration: Estimated 1997 Spending $462 $1,540 Spreadsheets Custom Systems 11M+ US Sales People; 77% on Commission $2B annual administrative costs today No standard approach No Audit Trail No Modeling Error Prone Sources: Robertson Stephens, Dartnell,

11 Phase I Target Companies >$250M Revenue, 200+ Reps. Value Pricing $100,000 Server + $400 per Rep. Direct Sales Model Professional Services by TallyUp or in Partnership. Target $250K Average Contract Value

12 Enterprise Market Opportunity ,000 Source BLS/Dartnell ,850 3, US Companies Revenues > $300M US Companies Using Incentive Compensation US Companies Using Spreadsheet Solutions

13 $225,000,000 $200,000,000 $175,000,000 Market Value Company Revenues > $250 Million 1% Market Share = $8 Million Average Contract Value = $250K 30% 25% $150,000,000 20% $125,000,000 $100,000,000 15% $75,000,000 10% $50,000,000 $25,000,000 5% $- Revenue Per Year Market Penetration 0%

14 Target Companies $10M to $300M NT/SQL Server Solution Channel Sales Microsoft Solutions Providers IBM Business Partners Net Price to TallyUp $25K

15 Market Size $10M to $250M 120, ,000 Source BLS/Dartnell 80,000 60,000 40,000 20,000 - US Companies Revenues > $10M < $250M US Companies Using Incentive Compensation US Companies Using Spreadsheet Solutions

16 $400,000,000 $375,000,000 $350,000,000 $325,000,000 $300,000,000 $275,000,000 $250,000,000 $225,000,000 $200,000,000 $175,000,000 $150,000,000 $125,000,000 $100,000,000 $75,000,000 $50,000,000 $25,000,000 $- Market Value Companies Revenues of $10M- $250M 1% Market Share = $14 Million Net Packaged Product = $25,000 R P Y M k t P t ti 30% 25% 20% 15% 10% 5% 0%

17 Combined Market Value $700,000,000 $600,000,000 $500,000,000 Total Market Value = $2.2 Billion 1% Market Share = $22 Million 30% 25% 20% $400,000,000 $300,000,000 15% $200,000,000 10% $100,000,000 5% $0 Revenue per Year Market Penetration 0%

18 $1,300,000 Product Development Alpha Release - March 98 Beta Release - June 98 FCS - September 98 Company Launch QIII 5 Development Partners Signed at FCS 2 National Marketing Partners Signed at FCS 10 Paying Customers Year End $9,000,000 TallyUp Addresses Fortune 2000 Market Direct Sales Model Supported by Telesales and National Marketing Partners. Examples Include Andersen Towers Perrin Package Product for Channel Launch Channel Product

19 Year $20 Mil. TallyUp Capitalizes on Middle Market. IBM Business Partners Microsoft Solution Partners Begins Development on Next Application. Temporary Labor Resource Planning. IPO Year $40 Mil. TallyUp Launches New Products Solidify Middle Market Recognized Leader in Rules Based Application Products.

20 FY/98 Company Risks Product Development Design Goal is to Reach an 80% Solution to Minimize the Installation Overhead. Complexity of the Problem is Such That This May Not be Possible. Installation and Customization.

21 New Enterprise Software Market Sales Force Automation 1 $2 Billion ERP $20 Billion 2 Variable Comp. Systems $2 Billion Potential Market Human Resource IS 3 $1.2 Billion Financial/Acctg 4 $5+ Billion 1, 2, 3 Yr. 2000; Sources: Computer Industry Forecasts Q3 97

22 TallyUp Can Not be Built Using a Procedural/Relational Model. The Availability of Good Object Oriented Tools and Rules Engines Only Makes it Possible Today. Pay for Performance is Becoming Important. We Have a Window of Opportunity.

23 Architecture Market Price Stand Alone TallyUp Object/Rules F2000 $250K + Oracle Procedural Relational Yes F2000 $250K+ No Trilogy Object/Rules F500 $250K + ViComp Again Tech Procedural/ ISAM No F2000 $200K Yes PC/Access Dept. <$20K Yes

24 Architecture Market Price Stand Alone TallyUp Object/Rules F2000 $250K + Trilogy Object/Rules F500 $250K + Siebel Oracle ERP Vendors Object/ Relational Procedural Relational Procedural Relational F2000 $250K + F2000 $250K + F2000 $250K + Yes No No No No

25 TallyUp Development Partners CADENCE SYBASE Buyer: Field Ops/Finance Field Ops/Sales Driver: Field Ops/Sales Field Ops/Sales Influencer: MIS/HR MIS Pain Point: Managing Reps Plan Admin Plan Admin Current Solution: 400+Spreadsheets Vicomp Pricing: $100,000 $150,000

26 Projected Revenues Revenue $50 $1,300 $9,000 $20,300 $40,000 COGS 0 $625 $2,000 $3,100 $6,000 Expense $900 $4,600 $9,700 $15,200 $26,000 IBT ($850) ($3,365) ($2,700) $2,000 $8,000 Headcount Equity Capital $1,000 $3,500 $5,000 Revenue in,000 s