SD2008 - SD Incentive &

Commission Management v 1.0

India SAP CoE, Slide 1

Incentive / Commission…?

India SAP CoE, Slide 2

SD Incentive & Commission Management

1 PrepareMe

2 TellMe

3 ShowMe

4 LetMe

5 HelpMe
India SAP CoE, Slide 3
SD Incentive & Commission Management

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2 TellMe

3 ShowMe

4 LetMe

5 HelpMe
India SAP CoE, Slide 4
Purpose
Variable compensation is a very effective level for aligning behavior such as
sales performance with Corporate Goals. In highly competitive markets
businesses need a highly motivated sales force. Flexible and Performance
related compensation is the steering instrument for increasing performance. It is
used to align sales force and employee performance to Organizational business
goals.

In dynamic world, Companies organizational structure, sales channels, and

product offerings often changes and calculation rules also changes
proportionately and rapidly. when changes occur compensation is a significant
cost element in businesses. Accuracy in calculations and cost control is
important. To keep pace with that we need a flexible tool to calculate
compensation types. Incentive and Compensation Management (ICM) is focused
on calculating variable awards for constituents of the enterprise.

India SAP CoE, Slide 5

Use
Whether you sell cars, insurance policies, or e-commerce
services, incentive compensations and commissions play an
essential role in your sales management

Used as a strategic tool, incentives and commissions help you

to improve employee performance and reduce costs.

ICM is used to address this complex business process.

India SAP CoE, Slide 6

Challenges
Difficulty in understanding the Integration of ICM with

- Customer Relationship Management to automate sales

commissioning

- Human Capital Management to apply variable compensation

throughout the entire company, beyond direct sales.

India SAP CoE, Slide 7

SD Incentive & Commission Management

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India SAP CoE, Slide 8
ICM’s Content
• ICM’s System Architecture
• Basic Information – Packages in ICM
• Business process – Solution Integration
• Master Data
• ICM’s Major Process

India SAP CoE, Slide 9

ICM system- Architecture
ICM
Collection /
Disbursem Policy Admin
Contract
...Others
Elements
Accounting
ent

Commission Case

Remuneration
Valuation and

Rules
Commission
Commission
Contract

ORG Accounts
Data Warehouse
BW
Agreement
Settlement

Settlement
Partner

SAP SAP SAP

...
HR FI BCA

India SAP CoE, Slide 10

Basic Information – Packages in ICM
ICM is a control tool which is used to realize strategic enterprise goals for
monetary and non-monetary incentives, for example, improved sales
performance or quality, cost reductions or other types of value creation for your
organization.. The flexible nature of ICM allows you to react swiftly to changing
circumstances. When the enterprise strategy is changed, this can be reflected
immediately in ICM.

Depending on business, market situation and enterprise structure, the business

requirements vary, and this is reflected in the different levels of complexity
offered by ICM. Since the various branches of industry are very different from
each other, SAP provide the option of designing customers own commission
management system according to your industry-specific requirements by
selecting ICM packages. Thus ensuring of creating a commission management
system that matches business requirements exactly. SAP also provided option of
adding customer specific rule definitions to the preconfigured ICM packages.

India SAP CoE, Slide 11

Packages in ICM

India SAP CoE, Slide 12

ICM’s Business Process
Amend Compensation Plans
for future Periods
Measure
Compensation Analyze
Results

Measure Incentive and Commission Decide

Management

Execute Design Compensation Plans

Calculate
Compensations aligned with Corporate
Calculate Incentives business strategy
Prepare Settlement

India SAP CoE, Slide 13

ICM’s Business Process: Solution
Integration
Business Strategic
Warehouse Enterprise
Analyze Management

Measure Incentive and Commission Decide

Management

Business
Execute Warehouse
Human
Customer
Resources
Relationship
Management

India SAP CoE, Slide 14

Integration of ICM with SAP Components
Targets Analytical& Decision Oriented Application
Data Storage Strategy Data
Other
Mgmt Warehouse

Contract Rules and Targets

Operational Processes

Mgmt

Calculation Rules
Operational Accounts
CRM Data
Incentive and Commission Management
Settlement

Aggregated
Results
Other
Human Accounts
Resources Payable Other

GL
Settlement Operations

India SAP CoE, Slide 15

ICM’s Master Data - Elements
Collection
Contract
/Disbursem Policy Admin ...Others
Accounting
ent

Commission Case

Remuneration
Valuation and

Rules
Commission
Commission
Contract

Accounts Business
ORG
Warehouse
BW
Agreement
Settlement

Settlement
Partner

SAP SAP SAP

...
HR FI BCA

India SAP CoE, Slide 16

Master Data – Business Partners
o Definition:
Organization (firm, branch office), person or a group of persons or organizations
in which your company has a business interest. Business Partner (BP) is central
component of the SAP R/3 ICM Solution which is used in all applications.
Business partners are created only once in the system. When a commission
contract is created, it is given a unique assignment to a business partner with the
role of commission contract partner.

o Control Elements of Business partners

1. Business Partner Roles
2. Business Partner Categories
3. Business Partner Types

India SAP CoE, Slide 17

Control Elements of Business Partners
1st

Business Partner
Roles

Business Partner
category

3rd
2nd
Business Partner
Types

India SAP CoE, Slide 18

Master Data – Organization
Structure
• The SAP organizational tool (PD-ORG ) is used for creating organizational
structures. Manage your internal and external workforce by defining
responsibilities, for e.g. territories. It allows you to display the following:

– Organizational units
– Job profiles
– Positions
– Relationships
– Staff assignments

• Indirect participants can be determined by:

– Structure
– Contract relation
– Data from the inbound interface

India SAP CoE, Slide 19

Master Data – Commission
Contracts
The commission contract maps the relationship between company and
commission contract partner or commission contract partners amongst
each other. AII monetary and non- monetary agreements between the parties
are mapped in the commission contract. Contracts are generally managed
in versions (time-dependent). All documents can be managed together with
the contracts, using optical archiving.

The commission contract is the central control element for:

1. Management
- Responsible commission clerk
- How does communication take place?
2. Participation ratios
- Relationship with indirectly participating commission contract
partners
- Which commission contract partners may act amongst each other?
3. Calculation bases
- Which conditions, rules, formulas, etc. are applied in which case?
- Monetary processing
- How are commissions settled and paid and via which channels?
- Market ratios
4. Which products may be sold by whom in which regions etc.?
India SAP CoE, Slide 20
Commission Contract - Types
Different commission Contracts exists.
They are

1. Global Commission contracts

2. Standard Commission contracts
3. Individual Commission contracts

Note: Commission Contract Bundle concepts are not dealt in this course

India SAP CoE, Slide 21

Major ICM’ s Processes

• Commission Case Calculation

India SAP CoE, Slide 22

Commission Case – Overview
The commission case determines the remuneration result of the commission recipient
on the basis of the information provided.
It requires at least the following information:

Business partner
Business object (e.g. a sales order)
Commission activity

Commissions are generated when a process (business transaction) takes place in an

enterprise, which results in added value and at least one participant is involved.
Agreements have to be made that trigger the disbursement of a commission. With
Incentive and Commission Management, you can remunerate a wide range of business
transactions as the system is extremely flexible. The result of the commission case is a
commission document, which is required for settlement.

Commission case consists of four major process steps:

Participant determination
Valuation calculation
Remuneration calculation
Posting

India SAP CoE, Slide 23

Commission Case - Inbound
Interface Information
 The structured inbound interface offers the link to the operational
system and contains information on
1. Participants
2. Activities and
3. Objects relevant for commission

 Maximum flexibility is achieved through customer field

enhancements to the inbound interface, with no modification
necessary.

Participants Objects Activities

Inbound Interface Information

India SAP CoE, Slide 24

Commission Case Processes
Participants Objects Activities
Inbound Interface Information
Commission case

accept

Sales 1.Determine Participant Pending cases/

organization
2.evaluate parking
3.Calculate remuneration
Commission clear
contract
post Commission
account
Contract close
Partner Sum
table
settle
Sum
table

Disbursement system
India SAP CoE, Slide 25
SD Incentive & Commission Management

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India SAP CoE, Slide 26
ICM’s Customizing
• Prerequisite Customizing
• Master Data Customizing
-Business Partners
-Organizational Unit Customizing
-Contracts
• Process Customizing

India SAP CoE, Slide 27

Prerequisite Customizing

IMG  Activate SAP ECC Extensions ( T Code: SPRO)

India SAP CoE, Slide 28

Prerequisite Customizing – Packages (I)

IMG  ICM  Application Admin Installation of commission Application

 Name Commission Application
Note: Please Don’t create it in IDES system. It needs Developers access key.
If you have necessary authorizations and developers key then you can
proceed.

India SAP CoE, Slide 29

Prerequisite Customizing - Packages (II)

Select the Packages in left

hand side and press the
button. It will be added in
your Application design.

You can choose the

commission
application using this
menu
(CACS_APPL_SET)
and set as standard
Application
IMG  ICM  Application Admin Installation of Commission Application
 Select Commission Packages

India SAP CoE, Slide 30

Prerequisite Customizing – Packages (III)
Copy client-specific Customizing from
the template (core package)

Construct commission
application

Commission Application
Generation
Release commission application for clients

Copy the client-specific Customizing from

the template

Can edit the permitted Business objects and

assign the sub objects to it.

India SAP CoE, Slide 31

Prerequisite Customizing

IMG  ICM  Basic Functions Preparation of Posting  Select

Commission Packages  Commission Contract Partner  Define Number
Ranges

India SAP CoE, Slide 32

Prerequisite Customizing

IMG  ICM  Basic Functions Preparation of Posting

 Comm.Docs, Stt. &  Edit Update Mode For Totals Tables

India SAP CoE, Slide 33

Master Data – Business Partners

CACSIMG  ICM Business partners BDT settings( SE43: BUPT)

India SAP CoE, Slide 34

Master Data – Business Partners - Roles

( SPRO)IMG  Cross Application SAP Business partners  Business partner

Basic settings Business partner roles Define Business partner roles

India SAP CoE, Slide 35

Master Data – Business Partners - Types

( SPRO)IMG  Cross Application SAP Business partners  Business partner

Basic settings Define Business partner Types

India SAP CoE, Slide 36

Master Data – Organization (i)

SAP easy Access  Human Resources  Organizational Management

 Organizational Plan  Org. Plan  Org. & Staffing ( Trxn :PPOCE)

India SAP CoE, Slide 37

Master Data – Organization (ii)

SAP easy Access  Accounting ICM Master Data  Org. Plan

 Org. & Staff Assignment ( Trxn :PPOME)

India SAP CoE, Slide 38

Master Data – Organization (iii)

SAP easy Access  Accounting ICM Administration  System Admin

 commission clerk Create ( Trxn :CACSMD301)

India SAP CoE, Slide 39

Master Data – Organization (iii)

SAP easy Access  Accounting ICM  Master Data  Contract Partner

 Create ( Trxn : CACSMD001)

India SAP CoE, Slide 40

Master Data- Contracts

SAP easy Access  Accounting ICM  Master Data  Commission Contract

 Create ( Trxn : CACSMD6101)

India SAP CoE, Slide 41

Process Customizing

IMG  ICM Basic and Master Data Standard Commission

Contract  Define Contract Types

India SAP CoE, Slide 42

Process Customizing

IMG  ICM Basic and Master Data Standard Commission Contract

Assign Commission Contract Types to Partner Types

India SAP CoE, Slide 43

Process Customizing – Activity

IMG  ICM Basic and Master Data Standard Commission Contract

Activity Agreement  Define Commission Activity Groups and Types

India SAP CoE, Slide 44

Process Customizing – Determine
participants (I)

Main participation
role

Independent
participation
IMG  ICM Basic and Master Data Standard Commission Contract
Participation Agreement Edit Participant Roles

India SAP CoE, Slide 45

Process Customizing - Determine
participants (II)

IMG  ICM Basic and Master Data Organizational Structure

Assign Commission Contract Types to Participation Roles
India SAP CoE, Slide 46
Process Customizing – Valuation (I)

Define
Calculation
Procedure

IMG  ICM Basic and Master Data Standard Commission Contract

Valuation Agreement Edit Valuation Types
India SAP CoE, Slide 47
Process Customizing – Valuation (II)

Define
parameter
settings

IMG  ICM Basic and Master Data Standard Commission Contract

Valuation Agreement Edit Valuation Types
India SAP CoE, Slide 48
Process Customizing – Remuneration (I)
(Performance related Calculation)

IMG  ICM Basic and Master Data Standard Commission Contract Remuneration
AgreementsAgreement for Performance-Related Remunerations Edit Remuneration
Type Activity
India SAP CoE, Slide 49
Process Customizing – Remuneration (I)
(Flat rate Calculation)

IMG Incentive and Commission Management  Basic and Master Data  Standard Commission
Contract  Remuneration Agreement  Agreement for Flat-Rate Remunerations.

India SAP CoE, Slide 50

Contract Type Screen Management

CACSIMGBasic and Master Datacommission contractBDT settings

India SAP CoE, Slide 51

SD Incentive & Commission Management

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4 LetMe

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India SAP CoE, Slide 52
LetMe
Transactions
CACSIMG ICM Customizing
CACS_APPL_SET Selecting the Commission Application and set as
standard
BUP1/BUP2/BUP3 Create /change / Display General Business partners

PPOCE Create Org structure & staffing

PPOME Change Org structure & staffing

CACSMD301/02/03 Create/change /display commission clerk

CACSMD001 Create/change/display commission contract partner

CACSMD6101 Create/change/display contract

India SAP CoE, Slide 53

SD Incentive & Commission Management

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2 TellMe

3 ShowMe

4 LetMe

5 HelpMe
India SAP CoE, Slide 54
Tips and Tricks

http://help.sap.com/saphelp_erp2004/helpdata/EN/9b/08
4736be07e421e10000009b38f889/frameset.htm

India SAP CoE, Slide 55

History of ICM..
SAP started developing a commission management in late 1998 together with MSG
Systems as a partner. The target was to build an industry-specific solution in a first step
and to make this available throughout different industries in a second step. The first step
was focused on the insurance industry, targeting the high end of market requirements.
FS-CS (Financial Services –Commission System) was developed together with 4 charter
Clients in Release4.51. The second step building ICM as a cross-industry follow-up of
FS-CS started in 2001. One focus in this step were the CRM and HR integration. Further
focus was the enhancement of the commission modeling and calculation capability.

In 2003 and 2004, ICM began to gain ground in further target markets. Together with the
hereditary ones, the targeted markets are:
 Automotive
 Banking
 High Tech & Electronics
 Insurance
 Media
 Telecommunications
 Trade & Wholesales
India SAP CoE, Slide 56