Firm ties bonuses to data quality

With sales, customer records, quality assurance and reporting all relying on the CRM system, one company has tied its bonus structure to data accuracy.

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The CRM system at Avendra LLC isn't just central to the business -- in many ways, it is the business.

Which is what makes the company's focus on user adoption and data quality so important. The company, based in Rockville, Md., provides procurement, logistics and supply chain management services for its customers across the United States, primarily in the hospitality industry. When Avendra was founded in 2001 by a group of some of the world's largest hotel operators, it didn't have much of a systems infrastructure beyond a spend tracking system it inherited from the Marriott, said CIO Jane Marie Dunigan.

"The first thing we needed to tackle was the customer management tool," she said. "We did a [request for proposal] and Pivotal came out as the best middle-tier option and architectural fit for us. We started to implement on the customer management side at same time we were doing supplier and contract management and realized we could use Pivotal there as well."

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What emerged was what Avendra now calls the enterprise relationship management (ERM) system based on software from Vancouver, Canada-based Pivotal Corp. The system has extended to all facets of the business and serves as the single database for the company. Customers can access the approved list of suppliers through a partner hub, quality assurance and financial forecasting are run off of the ERM system, and Avendra uses ERM to generate potential spend numbers from the properties it serves, providing information such as how many rooms a property has or whether there is a pool or a golf course.

"Every associate in Avendra has to use the system to capture information we need," Dunigan said. "Our business wouldn't run effectively if end users weren't using the system to completely capture all the information and to make sure the data's accurate."

Additionally, Avendra has heavily customized the system and ties the ERM into its reporting tools from Cognos.

With user adoption and the importance of accuracy so central to the success of the ERM system, Avendra has developed several steps to ensure participation. For example, it has created a data accountability matrix, assigning business users the responsibility for the accuracy of every piece of data that they enter and issuing performance bonuses based on whether they have met established goals.

Avendra breaks its data into categories such as suppliers or customers, takes a statistically valid sample and then compares it to the original document. For example, a sample of customer records may be compared to the original Marriott database to check for accuracy. Similarly, the contract sample would be compared with the original paper records. With those results, Avendra establishes a baseline for accuracy and then sets goals for business users on improving on that accuracy, awarding cash bonuses at the end of the year. The program has been so successful that Avendra is now focused on maintaining, rather than improving its data accuracy, Dunigan said.

"Certainly it's paid off in terms of creating a culture and awareness," she said. The ERM system helps Avendra drive revenue by identifying a customer's actual spend, comparing it to an established model based on the size and type of property and determining the difference. The exercise helps the company increase its sales into its customer base.

However, if the market segment is wrong because inaccurate data has been entered, it will impact downstream revenue.

"Another thing we have to do is train and educate so people understand how data drives downstream revenues," Dunigan said. "It's a constant education process."

When Avendra launched the Pivotal system, it began by conducting focus groups and online surveys; the senior vice president of sales extolled the virtues of the system. Continued adherence to data quality polices is ensured with luncheon sessions that promote and teach employees about the importance of the system, an in-depth training and certification program, and articles in the company newsletter. Avendra also measures user metrics, such as frequency of login and peak usage.

The efforts have paid off for the company, as it boasts 100% user acceptance for its 200 licenses and has been recognized by Pivotal as a CRM innovator.

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