Solution in Detail Insurance Executive Summary Contact Us Rewarding Sales to Maximize Revenue 2013 2014 SAP AG or an SAP affiliate company.
Serving Volatile Customer Segments Volatile Customer Segments Cascading Sales Strategy Customers are well informed, demanding, connected, and can be fickle. Attracting and retaining customers requires a strong customer orientation, a deeper relationship with them, and the ability to provide new products quickly. Agile and Efficient Sales SAP Innovations 57% Lower customer churn for the top 25% of organizations compared to average organizations An insurance company s challenge is to provide a wide array of products to well-informed customers who have no qualms about switching providers. Companies need to continually evaluate new sales channels and integrate those with the company s sales strategy. The sales force must have the expertise to prevent legal complications and focus on creating a positive reputation for the company. The success of the new products offered for new customer segments hinges on their ability to attract the attention of sales personnel. The best means of this is compensating successful sales fairly and quickly. A company s current customer base is just as demanding as its potential customers. Developing and maintaining strong customer relationships is an important means of safeguarding premium income. Insurance companies must quickly meet changing customer expectations with new sales channels and product innovations while safeguarding sales quality and retaining their existing customer base. 2 / 26
Aligning Sales Behavior and Strategy Volatile Customer Segments Cascading Sales Strategy Insurance companies can reach volatile customer segments more effectively by cascading sales strategy. Agile and Efficient Sales SAP Innovations Insurance companies must be able to respond quickly to the needs of current and potential customers, who shop for insurance not only through traditional purchase channels but also by social networking and surfing the Web. To efficiently target the changing market, companies need to constantly leverage existing sales channels and integrate new ones. Each element of the sales organization needs to be effectively integrated into one centralized compensation management system. This enables a company to implement its sales strategy in all branches and break down sales objectives into smaller targets. Offering new products is a proven means of attracting new customers. With a centrally managed organization, companies can quickly spread these product innovations to all compensation plans and integrate temporary campaigns in response to current trends. SAP solutions can help insurance companies streamline their sales activities and enable comprehensive, target-driven, innovative compensation plans. 3 / 26
Sales Agility Improves the Bottom Line Volatile Customer Segments Cascading Sales Strategy Agile and Efficient Sales SAP Innovations The SAP Incentive and Commission Management application can help insurance companies quickly offer sales channel and product innovations, giving a distinct competitive advantage. As soon as a company detects a new area of opportunity, it can rapidly embed new organizations into its sales structure, integrate compensation for new-product sales, and motivate its sales force with prompt rewards. With SAP Incentive and Commission Management, companies can: Promote innovative sales concepts by flexibly adapting the compensation model 11% Higher sales achievement for top 25% organizations compared to average organizations Create a faster and more efficient sales force by focusing on clearly set and rewarded objectives Avoid fines by securing producer credentials Improve customer retention by clearly consigning portfolio segments Boost operational efficiency by automating routines 4 / 26
SAP Innovations Volatile Customer Segments Cascading Sales Strategy Agile and Efficient Sales SAP Incentive and Commission Management for Insurance leverages the latest technology innovations to enable quick response to customer dynamics, highly flexible sales compensation options, extended analytical information, and ready access as well as a range of low-cost, low-risk deployment options. SAP Innovations Database and technology solutions that are powered by the SAP HANA platform enable rapid processing of high-volume data, such as evaluating current sales compensation strategies and running alternative compensation models. Analytics solutions from SAP provide role-specific views into activities and related compensation. For example, sales and compensation professionals can gain insight into their specific data slice. Mobile solutions enable sales personnel to view compensation, targets, and achievements. When used with a customer relationship management system, these solutions enable sales reps to seek opportunities and simulate commissions to identify and focus on the most promising deals. Cloud-based solutions offer options that can be leveraged when combined with compensation management solutions. For example, the SAP Cloud for Customer solution helps insurers manage, motivate, and support broker companies. 5 / 26
Targeted Compensation Boosts Sales Compensation Planning Sales Portfolio Sales Accreditation Compensation Operations Why SAP? Compensation Planning Set up a coherently designed incentive plan and easily cascade changes to align sales targets with company strategy and reduce time to market. Sales Portfolio Assign field services to customer segments and manage business portfolio relationships to increase customer loyalty and identify new opportunities. Sales Accreditation Verify sales force qualifications and link credentials to compensation to maintain high-quality sales processes and comply with legal requirements. Compensation Operations Use automated compensation processing and recipient-oriented analytics to speed rewards and increase sales force motivation. 6 / 26
Compensation Management Compensation Planning Sales Portfolio Sales Accreditation Compensation Planning Sales Portfolio Assignment Sales Force Accreditation Compensation Operations Compensation Operations Why SAP? Design Incentive Business Configuration Plan Maintenance Incentive Plan Definition Business Portfolio Segmentation Credential Catalog Definition Compensation management solutions delivered by SAP help drive efficient, compliant, and customer-oriented sales activities throughout the sales organization. Master Data Processing Portfolio Assignment to Sales Reps Sales Rep Determination Sales Reps Credential Registration Credential Check Processing Sales Reps and Contracts Master Data Compensation Processing 7 / 26
Strategy-Based Compensation Planning Compensation Planning The SAP Incentive and Commission Management for Insurance application helps a company design a consistent remuneration plan, break down its strategy to specific sales targets, and cascade plan changes. An insurance company coordinates its sales activities by modeling its business-based compensation structure in a central compensation system that is integrated with transactional sales systems. The insurer specifies distribution channels and defines a set of compensation rules based on a number of elements, such as activity-related commissions and period-based incentives. Using compensation management solutions delivered by SAP with prebuilt, basic structures enables an insurance company to easily build new organizations into its sales composition and swiftly integrate compensation for the sale of newly designed products. 8 / 26
Translating Strategy into Action Compensation Planning 34% Higher new-product revenue (as % of total revenue) for organizations that drive growth with continuous innovation Incentive business configuration provides holistic and flexible compensation modeling functionality, based on a step-by-step breakdown of sales objectives that conform to sales structures. Organizational management centralizes sales force maintenance, integrates all distribution channels, and enables insurance companies to quickly adapt sales force compensation to organizational changes or extensions. Incentive plan definition comprises the fine-tuning of the compensation elements. Valuation enables the quick modulation of activity benchmarking for respective weighting of activity-specific remuneration. Activity-related commissions encompass multiple agreement categories with graded validity, allowing use of predefined agreements. Targets and on-top remuneration complement the compensation plan with period-based and renewed rewards, including combined single and complex targets. 9 / 26
Speed Product and Sales Channel Innovations Compensation Planning Compensation management solutions offered by SAP provide a modeling framework and harmonized rules that enable insurers to steer sales activities throughout the organization based on their strategy. 12% Of organizations have the mature capability to change compensation plans as business conditions demand, using what if modeling functionality Centralizing the maintenance of a sales organization and remuneration model with SAP Incentive and Commission Management for Insurance enables insurance companies to establish a cross-line-of-business (LOB) compensation plan with adaptable target settings. A logically designed remuneration plan and the ability to calculate all types of commissions and incentives enable a sales force to focus on clearly set and consistently rewarded objectives. The architectural structures, cross-lob operation, and prebuilt remuneration logic decrease the time to implement new distribution channels, products, and compensation rules. Insurance companies can lower the cost of new-product introductions, thanks to a fast, user-friendly setup process for remuneration models. 10 / 26
Innovations for Compensation Planning Compensation Planning By pairing technology with data, insurers can fine-tune sales strategy and the compensation model and collaborate with partners. 48% Of organizations foresee a need to have predictive modeling and complex optimization techniques for analyzing Big Data Big Data Strategy-based compensation planning is boosted when insurers deploy database and technology solutions powered by SAP HANA. You can assess the effectiveness of compensation rules, simulate compensation models, and evaluate what-if scenarios. Analytics Analytics solutions can provide role-specific views into sales activities and related compensation and offer insight for business and compensation analysts. Dashboards and drill-down features address analysts need. Cloud Cloud technology facilitates hybrid environments. The SAP Cloud for Customer solution enables insurers to conduct business on a common platform with independent channels such as brokers and banks. 11 / 26
Customer-Centric Sales Portfolio Sales Portfolio Enhance customer relationships, create credibility, and spot up- and cross-sell opportunities with portfolio assignment functionality for portfolio segmentation and logical sales force assignments. Acquiring new customer contracts, decreasing the churn rate, and keeping existing customer bases are crucial to ensuring premium income. The challenge is to stay in touch with customers despite the constantly changing face of the sales force. SAP Incentive and Commission Management allows insurance companies to assign field services to customer segments and easily manage assignment transfers. Providing customers with seamless, reliable, and qualified service can increase customer loyalty and reveal valuable new sales opportunities. 12 / 26
Provide Holistic Customer Care Sales Portfolio 27% Of financial institutions surveyed tailor customer services based on customer segmentation to ensure alignment of customer revenue and cost to serve Business portfolio segmentation offers the framework to segment policy portfolios based on various criteria, such as lines of business, products, and regions. The segmentation logic uses multiple parallel types and assignments, including pro rata assignments. Portfolio assignment to sales reps allows insurers to assign the company s portfolio to the sales force by supporting the maintenance and management of the relationships between policies and agents commission contracts. The object assignment framework allows insurance companies to automatically manage both individual transfers (from agent to agent) and mass portfolio transfers involving huge data volumes. Sales rep determination identifies account executives eligible for on-top commissions that may be offered for perfect customer care, resulting in business renewals. Compensation management solutions delivered by SAP provide the reports needed to maintain visibility into high-volume business portfolio relationships and assignment transfers. 13 / 26
Sales Portfolio Cultivate Customer Loyalty and Uncover New Opportunities Clear assignments of a company s portfolio to the sales force enhance their advisory services for greater customer loyalty and more new sales opportunities. 67% Of financial institutions surveyed believe that growing customer share of wallet is one of the main goals of customer-centric initiatives Gain a clear picture of the business by consistently splitting up policy portfolios by multiple segment types. Improve customer retention and loyalty by making precision assignments of portfolio segments and responsibilities to the company s sales force, enabling them to build stronger customer relationships. Detecting up-sell and cross-sell opportunities is easier when customers insurance coverage is more visible to the sales force. Insurance companies can also reduce administrative tasks and manual activities by streamlining agent portfolio assignments. Uninterrupted customer care is maintained when insurers automatically and flexibly handle both agent-to-agent and mass portfolio transfers. 14 / 26
Innovations for Sales Portfolio Sales Portfolio SAP innovations enable insurers to visualize sales portfolios and reinforce customer loyalty with cloud and mobile options. 40% Higher employee productivity when mobile access is provided to employees across all levels Big Data With database and technology solutions powered by SAP HANA, insurers can improve portfolio segmentation by evaluating portfolio designs and simulating scenarios. Analytics SAP BusinessObjects business intelligence solutions deliver visualizations of portfolio segmentation while enabling access to deep, granular-level details. Cloud Using the SAP Cloud for Customer solution, sales people benefit from having access to customer-related data in terms of assigned customer contracts and policy portfolio. Mobile Mobile devices give producers real-time access to customer information, such as policy-coverage, claims, and payments, when they need it, anytime, anywhere. 15 / 26
Credentialing Builds Trust and Loyalty Sales Accreditation An effectively managed insurance sales force that provides reliable, wellinformed customer service can help increase customer loyalty and improve a company s reputation. SAP provides compensation management software that enables insurers to verify sales force qualifications and link sales force credentials to compensation. This helps keep the sales force up-to-date on the latest rules, regulations, and company standards. Credentialed sales professionals let customers know that their insurance provider is committed to providing the best possible service. Building a positive reputation by maintaining high-quality sales processes and complying with legal requirements help insurance companies not only build and maintain a positive reputation but also avoid legal complications and fines. 16 / 26
Maintain a Compliant Sales Process Sales Accreditation 40% Of companies believe that complying with [new] regulations is among the top strategic priorities Credential catalog definition provides a solid basis for compliance with both company and legal requirements. Sales force management solutions offer flexibly definable credential structures and a credential catalog in which quality criteria and attributes can be maintained. Sales reps credential registration is easier, because the application reuses master data that is already available in compensation processes. You can obtain sales reps' credentials by working with the credentialgranting authorities via enterprise services. Credential check processing can be combined with the compensation process or linked to quotation, application, or policyissuing processes. Directly linking sales compensation to the fulfillment of required licenses motivates sales people to step up their quality improvement efforts. Reports generated by compensation management software enable managers to monitor and track current and expiring credentials. 17 / 26
Establish a Reputation As a Credible Customer Advisor Sales Accreditation SAP Incentive and Commission Management helps insurance companies stay on top of the latest regulations and provide reliable service so that customers can confidently put their trust in their provider as a knowledgeable advisor. 39% Lower compliance and risk management FTEs when a risk management system supports automated reporting and alerting to facilitate risk management Having a sales force of skilled, credentialed professionals helps ensure that an insurance company s sales and service are of the highest quality and are legally compliant. A credential catalog in which legal and internal quality criteria are managed can enhance compliance and risk management. It is easy to keep up-to-date credentialing information by using enterprise services to interact with credential-granting authorities. Avoid company and individual fines by acting before credentials expire and by ensuring that the sales force has the credentials they need. An insurance company can enhance its credibility by directly linking sales compensation to gaining required licenses and openly sharing producers qualifications. 18 / 26
Innovations for Sales Accreditation Sales Accreditation Augmenting on-premise solutions with cloud technology enhances compliance management with current sales qualification insight. 65% Of companies believe that cloud technology will amplify other technology megatrends, such as mobile, Big Data, and analytics Cloud By combining sales qualification functionality with SAP Cloud for Customer as the front end, insurance companies can inform sales agents on the qualifications needed to sell each product. Complement this information by linking to corresponding training and qualification options. Mobile To help ensure that salespeople have product and required credential information wherever they are, SAP Cloud for Customer can deliver up-to-date qualification information to mobile devices. Analytics Analytic applications provide credential and broker managers with role-specific insight into available, expiring, and potential credentials of sales personnel and brokers. 19 / 26
Agile Compensation Operations Compensation Operations SAP Incentive and Commission Management for Insurance allows companies to offer appropriate rewards to new sales staff, automatically process deals, and provide producers and managers with useful reports. Motivate new sales staff and bring them up to speed quickly by embedding them into the sales organization, providing applicable compensation contracts, and offering appropriate rewards. Operational processes that are based on predefined logic and supported by checking routines let companies immediately calculate compensation once transactional sales data is transferred. Automated processing eliminates manual tasks and the errors associated with such tasks. Specific, meaningful reports motivate sales personnel, give management valuable insight, and improve sales-related decisions. 20 / 26
Motivate and Reward Sales Personnel Compensation Operations 21% Fewer errors in incentive payout for organizations with high maturity in incentive and commission management process Master data for sales reps and contracts enables companies to rapidly add new sales staff and assign and define their individual compensation contracts. The central business partner model enables companies to reuse HR master data already established for sales staff. The multistage concept takes a graded approach to using template contracts and agreements, which can be individualized as much or as little as needed. Compensation processing begins automatically once data is transferred from the operational sales systems. Combining predefined calculation logic with checking routines makes compensation calculations straightforward and highly automated, reducing the commission manager s manual activities to just clarifying questionable cases. The sales force can use their own portal to view their individual entitlements, target achievements, and payments. Managers can use the analytical tools to generate meaningful, recipient-targeted reports for insight into sales and compensation flows. 21 / 26
Compensation Operations A Motivated Sales Force Drives Business and Improves Efficiency Motivate channels and improve operational efficiency by rewarding sales personnel quickly and fairly, integrating new producers rapidly, and processing data automatically. 20% Lower sales force turnover rate for organizations where sales people can leverage opportunity management functionality to see their payout SAP Incentive and Commission Management for Insurance allows faster integration of new sales force members. Reduce both master data management and manual activities by assigning and individualizing predefined standard contracts. These factors can help increase the motivation of sales personnel and reduce their time to market. Rule-based compensation, calculation accuracy, and custom and predefined checking routines support straightforward processes and the automatic identification of questionable cases. Software significantly reduces the commission manager s workload by automatically processing calculations and making remuneration information available as a self-service feature for sales representatives. Accelerate sales managers decision making and response to changing customer expectations by adding the optional tools to deliver recipient-specific, meaningful reports. 22 / 26
Innovations for Compensation Operations Compensation Operations SAP innovations improve compensation operations by accelerating information delivery and improving sales channel efficiency. 40% Greater ability to use Big Data to gain insights with a wellestablished analytics and data modeling center of excellence Big Data Rapid analysis of huge volumes of data makes it easier to monitor and evaluate the sales force s sales and commissions by line of business, region, product, or campaign. Mobile Mobile solutions enable the sales force to seek leads and opportunities and identify and focus on the most promising deals wherever and whenever they need to. Analytics Sales agents and managers gain insight into role-specific data by using dashboards and drill-down functionality. Cloud SAP Cloud for Customer offers mobile and analytic functionality, while on-demand software for compensation and talent management from SuccessFactors, an SAP company, provides a straightforward approach to managing performance. 23 / 26
Why SAP? Compensation Planning Sales Portfolio Sales Accreditation Compensation Operations Why SAP? SAP Incentive and Commission Management enables insurance companies to combine sales compensation with customer portfolio and compliance management to motivate their sales force by providing them with the tools they need to drive business. Develop a holistic sales strategy and comprehensive customer centricity. Flexibly define and cascade a sales strategy into a fine-tuned set of targets throughout the sales organization, while staying in touch with customers and keeping track of their changing expectations. Sustainably safeguard quality and compliance in the selling process and provide the sales force with prompt and fair compensation, motivating them to further increase the bottom line. 60% Of financial institutions surveyed believe that improving customer centricity is the most important strategic priority Leverage key breakthrough innovations and harness the power of Big Data, mobile devices, cloud computing, and intuitive analytics to fine-tune compensation plans, track sales qualifications, monitor sales efficiency and bolster customer loyalty. 24 / 26
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Solution in Detail Insurance Executive Summary Contact Us Studio SAP 31841enUS (14/07) For more information, visit us online at: www.sap.com/insurance http://scn.sap.com/community/insurance http://facebook.com/sapforinsurance http://twitter.com/sapforinsurance 2013 2014 SAP AG or an SAP affiliate company.
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