Synopsis
- Client faced lengthy and complex bonus calculations.
- Implemented IBM ODM on Cloud, creating four decision services.
- Significantly reduced the KPI update time from months to weeks.
- Simplified decision logic for better business understanding.
- Enhanced speed and cost-effectiveness of development.
- Moved to cloud hosting, eliminating infrastructure management.
Article
The organization pays quarterly bonuses to operations staff (store-level managers, regional and district managers) according to the quarterly performance of the store/s under each manager's supervision, based on a number of performance metrics. The business makes periodical changes to these metrics—adding new metrics, removing obsolete ones, and changing the formulas for the calculation of existing metrics. Additionally, for eligible employees who transfer between stores during a fiscal quarter, a complex set of business logic was used to determine which store’s performance must be used to determine their bonus. The calculation of each performance metric and the calculation of each bonus (eligible employee’s variable compensation based on those metrics) was handled in SQL code, as a batch process.
The organization had several issues that needed to be addressed to make their bonus system sustainable:
- It was difficult to see the impact of KPI changes without running them against a live dataset.
- Changes to KPI calculations took several months to turn around and involved multiple resources within IT. Both IT and business owners wanted to reduce the role IT plays in making these changes.
- A limited number of staff are able to understand and maintain the SQL code that was used to calculate which store each employee must be assigned to, for the purpose of bonus calculations.
BP3 built four decision services, leveraging IBM ODM on Cloud, to solve these problems:
- The evaluation of each store, area, and region’s performance against the applicable performance metrics.
- Determination of each employee’s eligibility to receive a quarterly bonus, and which store eligible employees are evaluated with.
- The calculation of each employee’s performance evaluation, which includes the assigned business unit’s evaluation in addition to an assessment of the employee’s personal performance.
- The calculation of each employee’s bonus payment.
The solution has the following advantages:
- The ODM platform reduced the change cycle time from several months to several weeks
- As each decision service is built on the ODM BRMS platform, business owners are able to read and understand the logic used to make each of the four identified decisions.
- The decisions were built quicker and at a lower cost than the IT organization estimated could be done internally using a traditional programming language.
- Decisions are decoupled from the database, allowing for easier change-impact analysis and the implementation of a requested “what if” tool.
- Cloud hosting eliminates the need to manage infrastructure.