Clearion Software
Group 1, SM - B
Raghav Raj Jaggi G024 Sachi Ahuja H004 Aishwarya Deshmukh H013
Yajur Gulati H019 Niharika Mishra H038 Apoorva Somani H058
1) Analyse the performance of the regions for the H2, 2005. What do you think are the
issues in the various regions?
Revenue increase from 2004 ($129 million) to 2005 ($155 million): 20%
Manager Region Achieved % Shortfall H2 Headcounts Revenue/ Reasons
Quota or % Revenu (Units) unit
Surplus e
Jerry East No -15% 32 200 0.16 Quotas were imposed without any explanation
Garton which resulted in resistance
2) Given Difficult goal which appeared
unachievable to sales manager and resulted
poor performance (lack of data)
3) It could be a low potential territory but there
was no mechanism to measure it
Steve Hall West Yes 20% 39.6 214 0.19 1) Best shared Resource utilization
2) Potential Territory
Allision Federal NO -19% 7 64 0.11 1) Longer Sales Cycle
Chapas 2) Slow Decision Making at client side
3) Multiple Processes (Time Consuming)
2) What are the differences between Jacoby’s new model and the old model of assigning
targets and resources? Is the new system better or worse than the old? Why?
Old Model New Model
● Quotas were assigned on a situational basis ● Quotas were assigned region wise (largely
(largely subjective) - dependent on tactics like objective) optimized for profitability and to
sandbagging, lobbying and gaming make better investment decisions
● Headcounts were assigned on an Ad-hoc basis ● Headcounts were now converted into units and
(didn’t address immediate needs, were loosely then contribution was calculated per region
tied to goals) Ratio was fixed. (1 CAM to 1 TSM (Revenue earned / no of units)
& 1 SE)
● Shared resources were unevenly utilized by the ● Managers were to be penalised for utilizing
domineering managers with no penalties for more shared resources than required (this was
excessive use of shared resources measured by their contribution)
● Headcount didn’t come with any incremental ● Now, any director that wanted to hire additional
quota, so regional directors weren’t’ motivated people had to be willing to assume incremental
enough to hire new people immediately. quota associated with that headcount. This would
accelerate hiring times.
3) How equitable and sensible were the specific headcount and quota
allocations given out by Jacoby in January 2006?
Region Details Revenue/Unit Revenue/Unit
(2005) (2006)
East In spite of East not achieving 2005 targets; highest 0.16 0.17
increment in quota for 2006 + least increment in
headcount
West Even though they had achieved 20% surplus over 0.19 0.19
their quota, they also had a very high headcount.
West had utilized maximum shared resources
Latin America Headcount increased by highest % growth 0.13 0.12
In spite of shortfall, Quota also increased
Federal Quota reduced by 10% and headcount increased by 0.11 0.09
13 %
Not Equitable and Sensible
1. Not equitable as the case clearly talks about East-West regions equality but
when it comes to giving quota, East region is given more quota with smaller
territory. They also had a least headcount growth. Although this was given as a
punishment due to Garton due to his practices still it will create motivation issue
2. Federal region is fundamentally different as it is primarily catering to
government projects thus it is bound to have long sales cycle and various other
issues
3. The new model does not provide any quota percentages, it only provides the
parameters associated with it. In the end, Jacoby is taking the decision on his
feeling garnered from those numbers.
4) Which region would likely yield the most profitable investment of headcount in H1 2006: east,
west, federal, or Latin America?
%
Quota H2 2005 Quota 2006 % growth % shortfall or Headcount Headcount Headcount
Year (Rev $ in mn) (Rev $ in mn) Quota surplus in 2005 H2 2005 H2 2006 Growth
East 32 38.2 19% -15% 200 220 10%
West 39.6 45.1 14% 20% 214 242 13%
Latin
America 2.5 2.8 14% -10% 19 24 27%
Federal 7 6.3 -10% -19% 64 72 13%
Revenues/Unit = (Quota/Headcount)
Region 2005 Achieved 2006 Targets
14% growth in quota and a high
headcount of 13%.
West 0.19 0.19
19% quota increment, the highest of
all in 2006 where as lowest 10%
East 0.16 0.17 increase in headcount
27% Highest Headcount growth and
14% Quota growth
Latin America 0.13 0.12
Quota reduced by 10% and
Federal 0.11 0.09 headcount increased by 13%
Therefore the most profitable investment : West > East > Latin America > Federal
5) What areas, if any, of Jacoby’s model and processes for allocating headcount
and quotas needed to be adjusted?
Areas and processes for allocating headcounts and quotas that need to be adjusted:
1. Optimize the profitability
To ensure profitability and growth by setting quotas on both top line (revenue) as well as
bottom line (profit).
2. Improve understanding of spending allocations
Sales cycles and existing pipeline to be taken into consideration (like the case of Federal
region where although there was a dip in the target but the headcount actually increased)
3. Merge decisions about headcount and quota allocations
Newly employed and experienced should be assigned different units and quotas. A new
Sales person should not have the same head count as an old sales person in the same role
4. Make managers assume the cost of TSMs and SEs
Separate hiring agency that collaborates with the team of Davitian and based on the
quotas assign an equitable mix of TSEs, SMs and CAMs(to avoid an all CAM organisation)
6. Jacoby received a $92 million goal from Davitian representing the Americas
share of the overall corporate goal. The case does not provide any information as
to how that corporate goal was established. Who do you think should be
involved, and what processes should be employed in this goal setting? What are
the issues that a company should consider in establishing the corporate sales
goal? For each of the issues, how does this affect the various constituencies?
Who do you think should be involved, and what processes should be
employed in this goal setting?
Balance Top down approach with
bottom-up approach based on
ground realities
What are the issues that a company should consider in establishing the
corporate sales goal? For each of the issues, how does this affect the various
constituencies?