Creating Targets

Understanding the Flow

Before going into the details of targets, let's look over the basic flow of target creation in the Design Module. Creating targets flows specifically as shown below:

Creating Targets

  1. Click on the node in the Hierarchy Menu where you want to create the target.
  2. Select the Targets tab.
  3. Click on "Add New."
  4. Enter the appropriate values for the Target Details:
  • Target Name - Give the target a descriptive name that is unique in the system.
  • Type - Select whether this target is a time series or scalar.
  • Actuals - Select the summary metric that will be used to measure progress.
  • Fiscal - Select the Fiscal year that this target is for.
  • Role - Select the role to which this target applies.
  • Split Types - Select whether this target is Split or Overlay type.
  • Group (Optional) - give a free-form group name to group related targets.
  1. Open the Goal menu below: In the space provided, fill in a static or dynamic goal.
  1. If the target type above is a time series - then you'll see the option to define the Schedule and add any Adjustments needed.
  1. If the node you've selected has child nodes that you would like to distribute the targets to, then specify the target distribution mechanism from the Distribute tab. Select any Exclusions from the drop-down menu if necessary.
  1. Click Save to create the new target.

Target Details

Targets have the following structure:

  1. Name –a descriptive name for the target.

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Target Name Must be Unique

  1. Type – A Scalar or a Time-Series target
  • Time-Series – typically something like a quota, attainment, etc. where the target is
    typically broken down into a month by month schedule.
  • Scalar Value – Where the target is the same every month (e.g. activity targets for each month -
    e.g. 120 calls per month).
  1. Actuals - The metric that measures the actual progress of the target. Every target must have a metric that captures the actual.
  2. Fiscal – The Fiscal year that this target is for.
  3. Role – No target can be created without having a person in a role responsible and accountable for it. All targets must be assigned to a specific role, and when a person is assigned into that role – he/she would inherit the target.
  4. Split Types - Identifies whether people in the same role split the target or get the whole target.
  5. Group – A label used to group targets together for easy representation. This has no impact on functionality. (E.g., In a compensation plan, targets are usually measured under various categories such as Financial Targets, Revenue/Quota, Key Sales Objectives (KSOs) and Management By Objective (MBOs)).

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Use #HashTags to Name Groups

Setting a Goal

When setting up a target, it is necessary to set the annual goal - the target amount to be achieved by the role. This number is compared to the actual and determines if the goal has been completed.

There are two types of goals:
Static Goal
This is a simple way of setting a goal where you enter an amount into the Goal formula entry box. For example, to establish a Sales Quota Goal of $1M, enter "1,000,000" into the formula box, and that becomes the goal.

Dynamic Goal
Dynamic goals involve constructing a formula for creating with the Goal amount. Let's take the example of: You want to increase the sales quota for a certain node by 30%.

You would create the dynamic goal by constructing a formula as so:

  1. Drag the Sales metric from the list of available formula elements.
  2. On the drop-down box, select a node in the hierarchy and then select a fiscal year to use that year's data.
  3. Enter the following "*1.3" after the variable.
  4. Ensure that the formula is without error.
  5. Check the value to make sure you agree with the formula calculation and the final
    goal.
  6. Proceed with the rest of the target creation process by defining a schedule.

##Goal Formulas
The formula-based goal is a way to construct a goal based on other related variables. Various formula variables that are available for use include:

  1. Constants – static values entered as a number, typically used for assumption constants (e.g., market share, growth %, etc.)
  1. Other Targets – You can use another target as the basis to create a new target.
  1. Metrics – Use any metric and the value of that metric for a particular time period and node. For example, use last year’s revenue (i.e. Revenue metric in FY16) for the SMB node and divide it by 4.

Using the above variables, predefined functions, and constant values, you can construct a mathematical formula that will generate the amount that will become the goal to be used.

Split Types

The Split type for a target defines how to handle overlaps in coverage - i.e., where you'd deal with handling more than one person assigned to the role in question. There are two types of splits:

  • Split: If there are multiple people in a role for a period of time, they will need to split the target. The total of the split parts should always equal to 100%. For example, two sales reps in a territory can share their quota 60%:40%.
  • Overlay: All the people assigned to the role with this territory will inherit 100% of the target – irrespective of how many people are in the role.

Schedules

Apply schedules when you first create a time-series target or when providing bottom-up feedback.

When you have an annual goal (e.g., like quota), it may not be equally distributed every month. To fix this, you can add a month-by-month schedule to break the target down. For each month in the fiscal year, you can set what the monthly breakdown of the annual goal should look like.

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Time Series Metrics and Targets

You can only create a schedule breakdown for a time series based metric. You cannot create a schedule for a scalar actuals metric, and the schedule tab will not show up.

There are three options available when you select Add Schedule:

  1. Manual - Customize the breakdown percentages by the month for the fiscal period for which this target is valid.
  1. Seasonality –Use historical business cycles to set the appropriate targets. The seasonality can break down a target as a percentage of the total amount for each month based on an existing time series metric (e.g., last year’s revenue or previous three years of revenue). Selecting this option will auto-populate the schedule form for you.
  1. Rule of 78 - This method uses the rule of 78 to break down by percent each month to get to the desired goal. Selecting this option will auto-populate the schedule form for you.

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Schedule Must Total 100%

When applying one of the scheduling methods above, the percentages per month should add up to 100% as you are dividing the total goal each month based on the above approaches.

Adjustments

Adjustments are a way to increase or decrease the month by month breakdown of the targets for specific months, based on various factors that may impact the ability to meet those numbers. Below are some of the possible adjustments:

  1. Manual Adjustment - This is available for an executive or sales manager to apply their subjective judgment based on various factors based on ground conditions or situations that cannot be represented in a formulaic manner.
  1. Productivity Profile– Productivity adjustments are driven by the productivity of the person that is ultimately associated with the target. Ramp adjustments are a percentage of set quota per month corresponding to productivity. E.g. Month 1 of FY (0%), Month2 of FY(0%), Month 3 (50%), Month 4 (100%) – indicating that the person is fully ramped (i.e. 100% productive) by Month 4. Therefore, their contribution to the target before is ramping up from 0 to 100%. See below for more details on Productivity adjustments.

Productivity Adjustments and Profiles

Productivity adjustments are calculated based on a few factors:

  1. The current people assigned to a specific role and the effective date of this assignment.
  2. Any To-Be-Hired and To-Be-Transferred assignments and the effective dates of these assignments.
  3. The type of target - split vs. overlay.
  4. If split type target and there are overlaps, then the split %s between the assigned people in the role for the duration of the overlap.
  5. The productivity profile for the role, based on where each person assigned, is in their journey through their ramp process.

Based on the above factors, the system calculates what the new impact of the productivity profiles are on the target and your ability to achieve them. This final new impact shows and can be adjusted.

Distributing Targets

As discussed in Understanding the Types of Targets, to facilitate a top-down approach to targets, you must use distribution. Distributing involves breaking down the target at the parent node in a go-to-market hierarchy to the child nodes. To learn more about this process, go to Top-Down Target Setting.