Split Decision:  Analog Devices Solves Age-Old Business Problem around Commissions

—“Cognos' strength, both in terms of the product and the company as a Business Partner, won out in the end."— Henry Anderson, Project Manager, Enterprise Data Warehouse, Analog Devices

Analog Devices, headquartered in Norwood, Massachusetts, is a manufacturer of semiconductor silicon chips. The initial focus of the company, founded in 1965, was to build integrated circuits that convert analog signals (for temperature, motion, pressure, sound, and so on) into digital signals. In recent years, the company has expanded into a number of other related areas, such as digital signal processing (DSP) chip manufacture and micro machine chips, to enable portability, connectivity, and multimedia. With 8,600 employees, including 3,100 engineers, and 60,000 customers around the globe, Analog Devices is a world leader in their industry.

Analog Devices has a global sales force of about 400 individuals working in five major sales territories around the world. People within the sales force work directly with customers to both sell Analog products and to assist in any design challenges. The design implementations are handled by a number of design sales engineers who help customers integrate Analog semiconductors into their end products, whether a cell phone hand set or an airbag mechanism for an automobile.

Commissions for the sales force are based on how well individual salespeople meet their sales quotas. However, the collaborative nature of the sales process means that the design sales engineers are often included in the commission. In the past, determining the split on sales commissions has been a more or less manual process. This meant that the final payout on commissions took an inordinate amount of time and it was often difficult to determine exactly what the split should be. It usually took a month after the quarter closed to work out the details and finalize the appropriate commissions. The process also lacked transparency, so it was difficult for salespeople to see how the percentages were arrived at. This meant regional sales management would sometimes have to corroborate claims and work out the inevitable differences of opinion that ensued. Again, this questioning of the commission splits and working out agreements took up even more time.

When the sales group decided they wanted a reporting solution for sales commissions, they considered several possible vendors. Hyperion and Business Objects were both considered but were rejected in favor of a Cognos solution. Analog Devices was an early adopter of Cognos and it made sense to continue this positive relationship, as well as leverage their familiarity with Cognos products. The key factor, however, was that Cognos not only had a superior product but was highly regarded in the company as a business partner.

Once Cognos was selected to deliver the solution, Analog Devices called in Creative Computing to help implement it. Creative Computing has been a Cognos partner for about 12 years and their relationships with customers are almost 100 per cent based around Cognos technology. Creative Computing also has a longstanding relationship with Analog Devices. When Creative Computing came on board, they found that Analog Devices already had well-developed specifications and requirements, and had a fairly clear concept of what they wanted.

Because the solution employed Cognos Impromptu Web Reports (IWR), the role of Creative Computing was critical. Creative Computing was able to draw on their significant experience with Cognos IWR to meet Analog Device’s needs in a three- to four-week time frame.

Analog Devices was employing a homegrown data warehouse designed with Sybase DBMS, and front-ended with a Cognos BI tool suite. They were seeking a way for their sales organization to use the data warehouse to determine commissions for the sales force more quickly and efficiently, with more transparency and an ability to drill down for quick access to more detail. Henry Anderson Project Manager, Enterprise Data Warehouse of Analog Devices explains: “We had a fairly sophisticated drill through requirement, so we needed an experienced IWR developer such as Creative Computing.”

The reporting solution needed to handle a multi-level sales hierarchy. Furthermore, it needed to be able to summarize a single salesperson’s sales activity over the course of an entire year, yet that person may have reported to multiple regional managers in that year; or the account rep may have dealt with a combination of customers throughout the year. This meant the solution had to be dynamic enough to handle that type of complexity. At first, the sales group thought they might use the Cognos PowerPlay cube approach with which they were familiar. However, on further consideration, it was decided that Cognos IWR would deliver the right solution for their needs According to John Vermilyea, a Project Manager from Creative Computing, "The Analog solution demanded a combination of requirements that included recursive drill-throughs on sensitive commission data. We were able to deliver a technically elegant solution that greatly minimized administration and maintenance of security rules."

The solution was required to report off several applications already in operation: “Incentives”, for maintaining and deriving incentive payments, and “SR Quota”, for managing quotas and determining commission splits.

The solution is designed so that the employee at the vice president level receives a commission payout report as well as the detail of sales that comprised that payout. This detailed information consists of hyperlink entries for each of that VP’s sales directors and their sales totals. Clicking on the director’s link gives the next level down which shows all the regional managers that comprised the director’s totals. Again, clicking on a regional manager takes the user a further level down to the individual sales people in the region, their customer accounts, and their totals.

Now, reports are sent in a timely manner to every individual in the sales force once a quarter. These reports are first refined through a trial posting in which the sales administrators can confirm that the accounts are correct.

Creative Computing played a particularly critical role in assuring that the access security model that was implemented with the solution was appropriate for Analog Device’s needs and that it was easy to maintain. The Cognos partner was able to deliver functionality on the project in which users could drill through all the reporting relationships without having to maintain details in Access Manager. “We couldn’t be happier with Analog’s reception of this solution”, said Creative Computing’s President, David Doucette. “We’re proud to be one of the companies Analog trusts to deliver on the projects that require a bit more of the technical heavy lifting. Analog never fails to recognize innovative ways to leverage their investment in Cognos technology.”

The solution led to a number of significant benefits for Analog Devices:

Faster payout of commissions with less time invested to determine percent splits among sales people

More transparent process with complete underlying details as to splits on commissions, leading to less discussion and disagreement

Ability for VPs and directors to quickly and easily access reports on sales, commissions, quotas, and other sales data

Altogether, a less manual, labor-intensive, time-consuming process for the sales organization.

Analog Devices foresees a need to be more proactive in terms of measuring where sales stand in any particular region. They would like to be able to drill down in advance of the fiscal period and see how any region, individual, or account is performing in relation to sales quotas at any point in the quarter.

They are presently exploring the possibility of using Cognos ReportNet for further reporting solutions in this area. Henry Anderson concludes, “That particular product shows a lot of promise. We’re excited about it.”


Creative Computing, Inc., a leading Cognos Services Partner, has been designing, building and deploying business intelligence solutions based on Cognos software products for over 10 years. By following a Best Practices approach Creative Computing has successfully partnered with hundreds of Cognos customers, allowing them to build environments designed to enable key business users to access relevant business information. Creative Computing is headquartered in Lincoln, RI, and office in Boston, MA. For information, visit the Creative Computing Web site at: http://www.creatcomp.com.