Optymyze Helps Leading Healthcare Distributor to Successfully Manage Both Acquisition and SPM Change Faster

Situation

One of the largest distributors of medical and surgical equipment in the United States – with over 150,000 products, thousands of sales reps, and a monthly transaction volume of 10 million – decided to acquire their biggest competitor. With the acquisition came a big challenge: combining the variable compensation plans of two organizations and managing a sales force nearly double the size.

The organization quickly realized their homegrown compensation system would no longer fit their requirements. They needed a solution to streamline and automate sales compensation, and provide reps with transparency and value. Here is where Optymyze stepped in. We offered an agile solution that allowed them to quickly adapt to change and successfully manage the acquisition.

Challenges

Before working with Optymyze, the company managed sales compensation through a manual homegrown system, which reps could not access. It simply generated an individual earnings report and sent it to salespeople. This created a frustrating lack of transparency and control over performance, which demotivated reps. Moreover, the system was slow and unreliable, and didn’t allow the organization to make ongoing changes and to plan in a timely fashion.

The company had already completed several small acquisitions, but faced with one very large acquisition, it needed a total compensation system overhaul. After the acquisition, the organization had to manage:

  • 2,300 sales reps (1,400 before acquisition)
  • 10 million transactions per month (double the previous volume)
  • Five product categories with multiple commission rates per category
  • Seven different data sources as inputs

The organization needed a sales performance management solution that would:

  • Harmonize the sales teams and compensation plans after the acquisition
  • Improve the company’s ability to make ongoing and timely changes
  • Improve their flexibility and agility to adapt to the market
  • Provide greater transparency to sales reps
  • Create a data warehouse to centralize data and to improve reporting
  • Work well on mobile devices

Solution

The company considered four external vendors and asked two of them to do a proof of concept. The healthcare distributor chose Optymyze because the solution met all the requirements and enabled them to successfully overcome challenges. Moreover, the user interface was intuitive and provided reps with real added value.

Optymyze provided an end-to-end solution:

  • Complete sales compensation management system, including software and process expertise
  • Ongoing services to improve processes
  • Knowledgeable consultants, with broad experience in sales performance management

Outcomes

Deployment was completed in 12 months, with new sales compensation plans, a redesigned data warehouse, and improved business processes. Optymyze took an agile approach, focusing on smaller implementation cycles and introducing change gradually, based on client priorities.

The healthcare distributor is now able to execute sales compensation processes faster. Executives have access to more meaningful and timely analytics, while sales reps enjoy a single point of access to information about their performance and compensation.

Here are a few key outcomes of the project:

  • The successful harmonization of the sales teams and compensation plans
  • Ability to make plan changes in one month versus 8-9 months
  • More accurate and meaningful analytics
  • Increased ability to motivate desired sales behaviors
  • Better transparency and real-time reporting for reps
  • Mobile capability
By adopting the Optymyze solution and taking an agile approach, the company has reduced the time required to make changes in compensation plans from 8 or 9 months down to one.
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