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Oracle Incentive Compensation at Merial Ltd.

Oracle Incentive Compensation at Merial Ltd. Paula Harris, Merial Ltd Kathy Lancy, Merial Ltd Chetan Rischie, Consultant. Company Background. ” Dedicated to the health, well-being and performance of animals.”

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Oracle Incentive Compensation at Merial Ltd.

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  1. Oracle Incentive Compensation at Merial Ltd. Paula Harris, Merial Ltd Kathy Lancy, Merial Ltd Chetan Rischie, Consultant

  2. Company Background ”Dedicated to the health, well-being and performance of animals.” Merial is a world-leading, innovation-driven animal health company, providing a comprehensive range of products to enhance the health, well-being and performance of a wide range of animals. • Merial employs approximately 5,000 people and operates in more than 150 countries worldwide. • Merial's 2004 sales were in excess of $1.8 billion. • Merial Limited is a joint venture between Merck & Co. and sanofi-aventis • Merial's best known products: • IVOMEC® (ivermectin) -- the world’s single most successful animal health product, is used for treatment and protection against parasites in large animals such as cattle, sheep and swine. • FRONTLINE® (fipronil) -- is now the world’s best selling flea and tick treatment for dogs and cats.

  3. Oracle Implementation Background • Oracle Modules Implemented in 2002 for US Headquarters Operations • Financials • Supply Chain • iStore • Incentive Compensation • First Commission payment through Incentive Compensation in 2003 (OIC was part of the portfolio in 2002, Merial US was not fully configured until Oct 2003) • Internal Sales-Force (350+) • Partners/Sales Agents (700+)

  4. Challenges and Issues Implementation Challenges • Custom Sources needed to be defined to accept Sales data from Partners • Frequent Changes in Compensation variables (Rate Structure, Hierarchy, new Partners) by the business • Delay in receiving Sales Data from Partners • Customizations in the form of Rollup Tables for Bonus calculations designed • Design needed for paying multiple recipients (Sales Person, Sales Agents) on each transaction • No interface to AP or HR

  5. Challenges and Issues Business Versus IT • Adhoc Implementation • Lack of Project Plan for OIC Implementation • OIC was a secondary priority during implementation • Lack of In House OIC Expertise • Consultants worked directly with Business with no governance • Users knew the front end application, not the mechanics • IT Business Analyst assigned to transition knowledge from Consultants almost 1 year after implementation • Testing Best Practices not utilized • Concepts were tested in Production leading to proliferation of junk data • Mapping for sources was defaulted to fields that caused miscalculations in commissions

  6. Challenges and Issues Post Implementation Issues • Delay in receiving partners data and business model/OIC configuration required re-calculation of entire commission pool each month. This would take weeks at quarter end and year ends to finalize numbers • Data Growth was phenomenal. For every transaction OIC replicates • Additional transaction for each person in the Hierarchy • Additional transaction for matching Plan Elements • OIC recalculations and Database Maintenance activities took significant time, causing issues with testing any OIC modeling effort and other Oracle initiatives • Sales reporting was a challenge due to multiple OIC transaction lines for each AR transaction line • Business and Sales Partners lost faith in OIC capability to calculate accurate commissions due to system problems. Considered it inflexible and prone to error

  7. Post Implementation Cleanup • Recognized the need for joint governance (Business and IT). Analysts familiar with pricing and sales assigned by Business to facilitate/coordinate/validate business requirements • Recognized that Data Archiving was the top priority. Without archiving in place, impossible to even test any changes to comp plans • IT developed (in-house) archiving scripts for OIC transactional data. Reviewed by Oracle Support to ensure compliance with Oracle’s standards.

  8. Post Implementation Cleanup • Recognized the need to address the data growth • Review of Compensation Plans resulted in combination of several plans into single plan by expanding the Input/Output formulas • Utilization of Customized Rate Tables allowed to keep the same compensation plan without creating complicated multi-dimensional Rate Tables • Addressed Quarterly/Annual Bonus Plans. By creating a few custom views on the transactional tables to provide the roll-up information, converted the “Commission” Plans to “Bonus” Plans • Complete re-evaluation of mappings for all sources in order to speed processing and ensure data integrity.

  9. Engaging Business • Reconciliation effort was completed with each business unit. Analysts assigned by Business played a critical part in validation of requirements • Tied OIC sales numbers to Merial US sales with all variances thoroughly explained • Engaged business leaders to communicate commission plans as early as possible (3 months +) to allow for proper development and testing of plan changes • For ad-hoc changes through out the year, followed proper Change Control process • Continue to encourage business to simplify compensation plans wherever possible

  10. Lessons Learned Project Management/Resource • Ensure Business actively participates in project management and assigns experienced Compensation Analyst(s) • Consultants and IT work with Compensation Analysts on design/testing before engaging the end users • Institute Change Controls, all changes to Plans must be tested and signed off prior to migration to Production. • Request sufficient lead time to implement and test changes • Ensure that OIC Consultant/IT Analyst must have technical skills

  11. Lessons Learned OIC • Review the data pipe and project the data growth. This allows you to evaluate closing cycles towards the end of Fiscal Year. • Simplification of Compensation Plan Elements. You may be able to create more complex Input/Output Formulas and customized Rate Tables to eliminate unnecessary Plan Elements/Plans • Utilize the “Bonus” type of plan element. This may require assistance from IT technical staff to create some custom views, but this will certainly reduce the data growth

  12. Presenters • Paula Harris, Business Operations Analyst • Functional analyst specializing in Oracle Incentive Compensation and Advanced Pricing implementation and maintenance • Email: pshtech@yahoo.com • Mobile: (770) 639 0786 • Kathy Lancy, Senior Business Analyst • Analyst experienced in Oracle Incentive Compensation and Accounts Receivable implementation and technical support • Email: katherinelancy@yahoo.com • Mobile: (678) 458 4799 • Chetan Rischie, Independent Consultant • Specializing in architecting and managing Oracle ERP/CRM implementations • Email: rischiec@yahoo.com • Mobile: (770) 853 7597

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