Discover the Secret to R12 OIC

Lakshmi Sampath, Dell, Inc.

Presenter Qualifications
• Global EBS Architect at Dell, Inc.
• Expertise in implementing EBusiness Suite 11i
& R12 – including IStore, ISupplier, CRM –
OIC, RM/TM, OM, PA, Financials & HRMS
• Presented several Papers and hosted
several Panels at the OAUG, Oracle Open
World, Austin Oracle Users Group etc.
• ENCORE Presenter @ COLLABORATE-2006
• Board Member of the Oracle Business
Intelligence Special Interest Group (OBISIG)
and Austin Oracle Users Group (AOUG)
Session Objectives
• Learn about new Release 12 overview for
Oracle Incentive Compensation and Territory
Manager along with Integration points
• Review the Steps to Implement OIC
• Review some of the undocumented secrets
uncovered during our POC sessions.
• Take away tips and techniques to use Oracle
Incentive Compensation (OIC) and Territory
Manager (TM)
Target Audience for This
Presentation
• Oracle Customers currently evaluating Oracle
Incentive Compensation module
• Oracle Customers who are planning to
upgrade to R12 from prior releases
• Oracle Implementers who are planning or in
the process of implementing Oracle Incentive
Compensation and Territory Manager
modules.
Overview of Incentive
Compensation
• Eligible Transactions are determined
• Eligible Credits are determined
• Payments are calculated and processed
• Territory Manager calculates the credits
based on sales reps assigned to Territories
Oracle Incentive Compensation
Overview
• Oracle Incentive Compensation (OIC) is a global variable
compensation application that automates the design,
administration, and analysis of incentive-based
compensation programs to successfully drive corporate
goals.
• OIC enables "pay for performance" while maintaining
necessary financial controls.
• OIC allows organizations to connect sales incentives to
business objectives to motivate workers (sales reps).
• OIC automates the complex task of modeling and
calculating incentive payments.
Oracle Incentive Compensation
Overview

Collection Calculation Engine

Interface Tables

• Multi-threaded/Grid processing
• Configurable data mappings • Retro active calculation
• Transformation & enrichment • Incremental calculation
• Post collection actions / filters

• Complex formulas • Date effective

• Flexible expression builder components
Compensation • Link to external logic • Reusable components
Plans • Linked objectives • Currency conversion
• Multiple rate dimensions
Territory Manager Overview
• Territory Manager enables organizations to align territories
accurately and efficiently.
• Territory Manager is used in OIC to determine who the credit
receivers are for sales transactions
• In OIC, Sales Credit Allocation is run to determine the how
much
• TM has added new features that OIC has adopted in R12:
• Allows custom attributes to be created and used as
territory qualifiers
• Provides effective dated territories for correct assignment
by the Territory Engine
• Batch processing for assignments with new parameters
• Additional seeded mapping
Territory Manager Overview
The Benefits of the TM to OIC Integration Include:
– Correct assignment using effective dated territory resources and
roles
– Improved performance
– Less setup for mapping and calls to the Territory Assignment
Engine (TAE) through Oracle Incentive Compensation for a more
rapid implementation

Territory Rules

Transactions
Collection Engine
Calls Credit Transactions
TAE
OIC Integration with Other Modules
Steps to Implement OIC
1. GL Setups
2. Multi-Org Setups
3. OIC Initial Setups
4. Resource Manager Setups
5. OIC Setups
6. Compensation Plan Setup
7. Pay Groups
8. Pay run
GL Setups

• Base GL Setups (4C’s)

– Currency, Calendar, Chart of Accounts,
Convention
• Accounting Flexfield Setup
• Ledger (COA)
• GL Calendar to be opened
Steps to Implement OIC
1. GL Setups
2. Multi-Org Setups
3. OIC Initial Setups
4. Resource Manager Setups
5. OIC Setups
6. Compensation Plan Setup
7. Pay Groups
8. Pay run
Multi-Org Setups
Hierarchy
• Business groups
• Primary ledgers
• Legal entities
• Operating units
• Inventory Organizations
Multi-Org Setups
Organization Structure Example
Multi-Org Setups

• Create Security Profile

• Attach the Security profile to responsibilities
• Run Security List Maintenance
Steps to Implement OIC
1. GL Setups
2. Multi-Org Setups
3. OIC Initial Setups
4. Resource Manager Setups
5. OIC Setups
6. Compensation Plan Setup
7. Pay Groups
8. Pay run
OIC Initial Setups

• Open the Compensation Periods

• Navigate to Incentive Comp Administrator,
Configuration Workbench and define the
following parameters
• Application Parameters
• Collection
• Calculation
• Payment
• Credit Allocation
OIC Initial Setups
OIC Initial Setups
 OIC Initial Setups
Some of the 11i Profile Options are Configuration Workbench
Parameters in R12

OSC: Default
Conversion Type

OSC: Default
Custom Flag

OSC: Reporting
Hierarchy

Display Draw
 OIC Initial Setups

OSC: Reset Error

Transactions

OSC: Apply Non Revenue

Split to Quantity

OSC: Collect on Acct

Credits

OSC: Negate during

Revenue
Adjustments
Collection
 OIC Initial Setups

OSC: Commission
OSC: Prior Rate Precision
Adjustment

OSC: Income Planner

Disclaimer

OSC: Customized
Summarization

OSC: Roll Summarized

Transactions
Steps to Implement OIC
1. GL Setups
2. Multi-Org Setups
3. OIC Initial Setups
4. Resource Manager Setups
5. OIC Setups
6. Compensation Plan Setup
7. Pay Groups
8. Pay run
Resource Manager Setups

• Setup Resources and Salesreps or Import

from HRMS
• Setup Roles
Sales Compensation Role types
• Setup Groups (Hierarchy)
• Setup Teams
Steps to Implement OIC
1. GL Setups
2. Multi-Org Setups
3. OIC Initial Setups
4. Resource Manager Setups
5. OIC Setups
6. Compensation Plan Setup
7. Pay Groups
8. Pay run
OIC Setups

• Collection
– Transactions can be collected from AR
– Oracle Order Management (Order Capture)
– Custom data sources
 OIC Setups
Eligible Products (Formerly Revenue Classes)
• OIC determines the corresponding eligible products for a transaction
to determine whether the credit receiver can receive compensation for
that type of revenue.
• Eligible products serve two purposes:
– They let you vary compensation by type of revenue.
– They help determine whether a salesperson can be paid
compensation for the type of revenue represented on the
compensation transaction.
OIC Setups

Transaction Factors for Eligible Products

– Key transaction factors used to assign sales
credit:
• Upon order
• Upon invoice
• Upon payment
– Other transaction factors include (default set):
• Clawback
• Credit Memo
• Giveback
• Manual Adjustment
• Write-off
OIC Setups

• Define Products/Product Hierarchy (upload

available)
• Classification Rules
– Rules that determine the nature of revenue class
for each transaction
• Synchronize Classification Ruleset
Steps to Implement OIC
1. GL Setups
2. Multi-Org Setups
3. OIC Initial Setups
4. Resource Manager Setups
5. OIC Setups
6. Compensation Plan Setup
7. Pay Groups
8. Pay run
 Compensation Plan Setup
Plan creation pre-R12 R12 plan creation
“Bottom-Up” “Top-Down”
Compensation Plan Setup

Benefits of Top down creation

Simplifies plan creation
 Start with a blank plan and create plan
components as necessary
 No advanced planning for plan components

Reduces maintenance complexity

 Dependencies between plan components are
easier to track
 Streamlines/simplifies demo flow
 Compensation Plan Setup
Building Blocks of a Compensation Plan
Resource
Resource Sales
SalesGroup
Group
Roles
Roles
Compensation Plan Setup

Formulas
Formulas are composed of several components:
 Input expressions: Transactional data that determines
commission rates
 Rate Tables: Designates commission rates based on
input expressions values comparisons with rate
dimensions
 Output expressions: Determines the commissionable
amount
 Performance Measures: Accumulates expression to
use in Year-to-Date Summary reporting
 Forecast Expressions: Used to estimate commissions
from Oracle Quoting
 Compensation Plan Setup
Formula Components
FORMULA
FORMULA

Input
Input Rate
RateTable
Table Output
Output
Expressions
Expressions Results
Results Expressions
Expressions

Green = Provided to Incentive Compensation

Blue = Calculated by Incentive Compensation
Formula Parameters
• Below are the valid combination of options available for
formulas :
– Transactions
— Group By Interval
— Cumulative
— Individually
— Cumulative
— Cumulative and Interval To Date
– Split
— No Split
— Non-Proportional
— Proportional
 Formula Parameters – No Split
Rate Table

Transaction Amount Percent

$0-250,000 4%
$250,000-500,000 5%
$500,000-1,000,000 5.5%
$1,000,000 – Up 7%

Transaction Amount = $400,000

Calculation:
$400,000 x 5% = $20,000
Formula Parameters – Non-
Proportional
Rate Table
Transaction Amount Percent
$0-250,000 4%
$250,000-500,000 5%
$500,000-1,000,000 5.5%
$1,000,000 – Up 7%

Transaction Amount = $400,000

Calculation:
$250,000 x 4% = $10,000
$150,000 x 5% = $ 7,500
lTotal = $17,500
 Formula Parameters –Proportional
Rate Table
Transaction Amount Percent
$0-250,000 4%
$250,000-500,000 5%
$500,000-1,000,000 5.5%
$1,000,000 – Up 7%
150,000
= 0.6
Transaction Amount = $400,000 250,000

Calculation:
($250,000 x ($250,000/$250,000) x 4%) = $10,000
($150,000 x ($150,000/($500,000-$250,000)) x 5%) = $4,500
Total = $14,500
 Four types of Rate tablesRate Dimensions
Amount: The rate dimension is defined in quantities. Multidimensional Rate Table
Units Sold Commission %
1-250 2 Revenue Amount Country Product

250-500 4 0 – 250 USA Product X

500-99999999999 6 250 - 9,999 Japan Service Y

Germany
Percent: The rate dimension is defined in percentages.
Percent of Quota Commission %
0 - 25 0
25 - 75 1 License Revenue Country Product Rate
75 - 100 3 0 – 250 USA Product X 1%
0 – 250 USA Service Y 5%
Expression: The rate dimension uses previously defined expressions. 0 – 250 Japan Product X 1.5%
Percent of Target Commission % 0 – 250 Japan Service Y 4.5%
0 - 0.25 * ITD Target 5 0 – 250 Germany Product X 1.25%
0.25 * ITD Target - 0.75 * ITD Target 10 0 – 250 Germany Service Y 6.25%
0.75 * ITD Target - Target 15 250 - 9,999 USA Product X 4%
250 - 9,999 USA Service Y 8%
String: The rate dimension uses alphanumeric data. 250 - 9,999 Japan Product X 4.5%
Country Commission %
250 - 9,999 Japan Service Y 7.5%
USA 5
250 - 9,999 Germany Product X 4.25%
Japan 4
250 - 9,999 Germany Service Y 9.25%
Germany 7
OIC Calculation Process
Sequence
• Revert
• Classification
• Rollup
• Population
• Calculation
Steps to Implement OIC
1. GL Setups
2. Multi-Org Setups
3. OIC Initial Setups
4. Resource Manager Setups
5. OIC Setups
6. Compensation Plan Setup
7. Pay Groups
8. Pay run
Pay Groups

• Can be assigned to a Role or a Resource

• This needs to be assigned for the Calculation
process to run
• Each pay group is based on frequency of
payment or business units.
Steps to Implement OIC
1. GL Setups
2. Multi-Org Setups
3. OIC Initial Setups
4. Resource Manager Setups
5. OIC Setups
6. Compensation Plan Setup
7. Pay Groups
8. Pay run
Pay run

• Need Payment analyst role to create and

maintain the payment batches (pay run)
• Create Payment Batches
• Export the Payment batches
Multi-Org Access Control
Setup and Process
For OIC Responsibilities,
assign the following MOAC
profile options:
MO: Security Profile
MO: Default Operating Unit
(MO: Operating Unit is not
required since Security
Profile is defined)
Multi-Org Access Control
Setup and Process
R12 OIC New Functionality

• Compensation Plan
 360 Degree View
 Top-Down Plan Creation
 Checklists & Wizards
• Plan Component Library
• Multi-Level Marketing Enhancements
• Export for Plan Assignment
• Terminology Changes
R12 OIC New Functionality
• New Features
 Configuration Workbench
 Multi-Org Access Control (MOAC)
• Changed Features
 Notes
 Improved Territory Integration leveraging R12
Territory Manager Capabilities
 Redesigned reports
 Plan Element Checklists
 Checklists enhance:
 Data Completeness
 Usability
 Accuracy

 System validation at end of each step

Roadmap for
Plan Element
creation
Track progress
 Plan Element Checklists
– The ‘Required’ field column lets the user know which steps need to
be completed
– The ‘Status’ column tells the user where they are in the process
– Each Area has a ‘Go To Task’ drill down with its own check-list
– The ‘Checklist Key’ explains the status icons
 Multi-Level Marketing Enhancements
Per customer requests, Multi-level Marketing (MLM)
features have been added:
 Rollup Level
 A column has been added to the OIC transaction to track
the level of the roll up for each transaction
 Direct vs. Indirect Credit Receiver
 Users can more easily distinguish if a credit is earned
due to a roll up or if it was directly assigned to the
resource
 Plan Element processing option to calculate
transactions rolled up through the Sales Comp
Hierarchy
 Now if users Rollup across the Sales Comp Hierarchy
they have the option, at the PE Level, to calculate
commission for those rolled up transactions
 Calculation  Configure Tables &
Columns task

Select the radio option

for
‘CN_COMMISSION_
LINES’

Navigate to the
Rollup Level
column, then click
the ‘Usage’ box
then Apply
 Create a 2-D Rate table. One
of the dimensions will be for
the Rollup Level.

Select the Rollup Level

attribute from the
Commission Lines
object to use in your
formula as an input
parameter.
 Add both input
expressions to the
formula

Both inputs (Attainment

Percent and Rollup Level)
are passed to the Rate
Table.
 Data Export for Plan Assignment
 Table data can be exported
as
.CSV
 Data to export
 Plan eligibility
 Plan search results

 Plan element search results

 Payment plan search results

Tips and Tricks 1
Instance Status active only after periods are open and
only if the Instance status is active, comp plans can be
saved.
Tips and Tricks 2
No. of expressions is limited to 200 expressions unless you
change the profile option FND: View Object Max Fetch Size
FND: View Object Max Fetch Size

Tips and Tricks 3

You can add any custom function to OIC Lookups and It will
show up in the expression builder while creating comp plans
Tips and Tricks 3 (Continued)
Here is an example. Adding the CN_API.GET_SALESREP_NAME
function to the OTHER_FUNCTIONS lookup.
Tips and Tricks 3 (Continued)
It shows up under Other functions in expression builder. Any
packaged function can be called from the form.
Tips and Tricks 4
Using Other Hierarchy, you can customize the Product
Hierarchy out of box and use your custom table
Tips and Tricks 4
Tips and Tricks 5

• Commission type Plan Elements – uses

transactions for calculation
• Bonus type Plan Elements – non transaction
base for calculation
• Creating Dummy PE and referencing it in the
next PE will make it as Commission type Plan
Element.
Tips and Tricks

• Use External tables or views and map them in

OIC and they can be used to create
expressions.
Acknowledgements
Special thanks to the following people at Dell
who made this presentation possible
• Steve Rivers, IT Director
• Michael Clark Sr. Manager
And the following sponsors for the POC Team
• Will Cornish, Sr. Manager
• Sue Patti, Sr. Manager
• Ken Allen, Sr. Manager
• Bill Uhlenhop, Director
Acknowledgements
And thanks to all the members of our POC Team
• Shanker Karpe
• Brent Perlinger
• Kalyana Elangovan
• Michael Mintskovsky
• Jim Cullis
• R Kirubakaran
• Phillip Woodruff
• Dave Ackron
• Sridhar Potluri
Acknowledgements

• A very special thanks to my husband Ram

Ganapathy for his full support and
encouragement in writing this paper
Q&A
Thank you all for attending!