Better Performance Management Through Robust Analytics

Better Performance Management Through Robust Analytics Christopher Pircio CFO New England Media Group Dennis Newman Director, Finance New England Media Group June, 2008

Agenda Who we are 1. Business issue identification 2. What we did 3. How we did it 4. Review of the tool 5. Lessons learned 6. Final comments 7.

#1 newspaper for circulation and readership in New England #1 content site in New England Top rated local cable sports station Best read newspaper in Worcester County BGM media plan Your needs Our recent partnership with Monster.com has created a jobs site with over 50,000 listings. #1 composition of 18-34 year olds among Greater Boston newspapers #1 direct mail service provider in the market Custom events, buzz marketing and sponsorships The Boston Globe is a subsidiary of the New England Media Group Started in 1872 by Evan Jordan of Jordan Marsh department stores, the Boston Daily Globe and related properties were purchased by the New York Times in 1993. New England Media Group is comprised of: Who we are NEMG is a company with revenue of approximately $600MM and 2,400 employees

The Globe’s powerful content offers a strong platform for our clients The region’s strongest marketing vehicle Who we are • #1 newspaper for readership and #1 for circulation in New England • Daily Readership = over 900k • Sunday Readership = nearly 1.5 million • 20 Pulitzer Prizes • Market leader for over 130 years • Trusted source for news and rich journalism MAIN NEWS CITY/REGION BUSINESS SPORTS IDEAS/BOOKS OP ED WEEKEND LIVING ARTS STYLE & ARTS MOVIES FOOD HEALTH/SCIENCE CALENDAR SIDEKICK GLOBE MAGAZINE COMICS ARTS & ENTERTAINMENT FASHION BOSTON 45% of Bostonians say the trust newspaper advertising more than any other media • #1 regional website in New England • #6 newspaper website in the country • 4.9 million unique users monthly Source: 2007 Scarborough Research, Recontact Study, Boston DMA; February 2008, Nielsen//NetRatings

Business Problem & Background The impetus for change was an antiquated state of processing commissions. Subsequently, we realized this “bad process” was also hindering performance management and our ability to drive sales behavior. Business Issue Commission Administration: • Excel calculations with manual input (3-4 FTE’s) • Word documents and excel file to explain the calculations to reps • Word/PDF document to illustrate account revenue, static / updated monthly Performance Management: • Overall results were posted and discussed a month in the arrears • Discussions were usually about goal attainment, not about the drivers of revenue • Very little reporting was available • Reps never could draw a line of sight between goals and commission payments • Newer reps would come on board and ask, “where are my reports” • No spirit of competition on the sales floor The challenge was not just the systems and processes, but the culture…

It became apparent that we needed a robust performance management solution What We Did To solve the commission automation and limited analytical capabilities needs IT and Finance + Business Sponsors (Sales and Marketing) + Vendor Support = Collaborative Team Approach with Subject Matter Experts

The group reached consensus on the problem and addressed the scope / funding of the initiative Sales Commissions What We Did • Improve accuracy and efficiency of commission processing by automating the process of calculating sales commissions for the outside sales representatives • Create robust sales management reports that facilitate performance management discussions between directors, managers and reps • Provide a greater level of insight, timeliness and transparency into the commissions calculation • Provide greater visibility into our relationships with customers and what they are buying across NEMG • Improve revenue through increased rate yield, better insight into account performance and account activity • Reduction in commission administrative time (~ 1 FTE) Return on Investment

Our initial goal for sales commissions was to move from the current manual process… What We Did To an automated process that still met our needs for flexibility of plans and processing Account performance Commission maintenance Logic applied to accounts Legacy data loaded Revenue Adjustments Commissions Calculated

Excel based, manual entry updated on demand So our initial focus was around administrative improvement, not improved analysis What We Did Web-based system, updated nightly with audit trails on values input online

Based on the thirst for knowledge from the sales execs, we also realized we need to upgrade their reporting The key to migrating the sales exec reporting was to provide the same metrics and data elements, but with an analytical lens. What We Did Lotus notes database Secure, web-based application

We found that a cross-functional team was critical to success Sponsors Executive Steering Committee Chris Pircio Finance George Barrios Finance How We Did It Thom Guertin Information Mgmt Program Manager Lisa DeSisto Advertising Sam Martin Advertising Peter Ockerbloom Advertising Chris Mayer Information Technology IT Technology Support Team Judy Bacher Mike Quagliato Sales Commissions & Team Leaders Wendy Evans Advertising/Finance Dennis Newman Palladium Engagement Manager Kelli Bodayla IT Information Mgt Team David Doolittle Sibu Tshabalala Bill Mackey Sales Commissions SME Mary Ellen Zarro Consultant Implementation Dina Apovian, Business Analyst Marcus Jurado, ETL Architect Brian Healey, Database Developer Subject Matter Experts Advertising Sales Advertising Bus Dev Advertising Marketing Advertising Ops Strategic Planning IT Admin & DBA Jim Fitzpatrick GSP WTG Boston.Com FPA SME’s

Together, we created a data mart and leveraged a web-based analytical tool to support these needs How We Did It Web Focus Portal and Reports Sales Commission Oracle Data Mart and Decision Support Application Oracle Staging Area TAAS Advertising Data Sales Commissions Extract Transform and Load ETL HR EDW Web Focus Maintain Screens

Portals Gateway to Reporting Reports Web Based Data Retrieval Maintain Data Input Interface The result became an analysis toolbox available to sales executives, managers and administrators • Various time period analysis • Scrolling message board • Internal payroll feed updates • External payroll feed updates • System Updates • Commission Metrics • Revenue Performance per Division • Sales Executive Rankings by Revenue, Commission, Goal Attainment, Plan • Various time period analysis: • Scrolling message board • Goal Fulfillment Performance • Revenue Attainment • Cross Property Performance • Ranking by several metrics • Top Customers: Underperforming ‘Big Spenders’ • Active/Inactive Accounts • Revenue Performance per Property • Various time period analysis • Scrolling message board • Revenue Analysis • Sales Executive Fulfillment to Goal • Cross Property Performance • Sales Executive Commission & Rate Statistics • Top Spending Accounts • Total Division Revenue Performance • Full Run, Part Run, Daily, Sunday Revenue Statistics • Missed Payroll Records • Account Changes • Employee Status Changes • Inactive Accounts • Revenue Report • Sales Goals • Commissions Report • Commission Adjustments • Sales Executive Rankings • Revenue Summary • Account Revenue Performance • Rate Summary • Transaction Detail • Commission Calculation Worksheet • Customer Rankings • Active/Inactive Accounts • New Business/New Accounts • Revenue Summary • Account Revenue Performance • Rate Summary • Commission Calculation Worksheet • Customer Rankings • Active/Inactive Accounts • New Business/New Accounts • Sales Goals by Dollar & Percent • Revenue • Temporary Coverage • Internal/External Payroll • Plan Type Assignment/Changes • Commission Payment Approval • Scorecard • Account Commission Status • Plan Parameters Administrator Tools How We Did It Sales Executive Tools Sales Manager Tools

Over the course of the project, we identified a few enhancements to RPM capabilities How We Did It Implemented tighter security • Sales Executives cannot review each other’s data • Managers can only view the information for their direct reports • SOX compliant (it is payroll data) Created administrator input as well as output options • We recognized that we would still have certain process challenges which required both input and output screens. Added more reports (with others on the way) • Sales reports • System access reports Migrated to a nightly processing time • Limitations to our underlying systems forced system down times • Creation of a dependency on an older system the timing of which could impact the values

Report Tabs: • Revenue Summary • Account Revenue Performance • Rate Summary • Commission Calc Worksheet • Active/Inactive Easy to use navigation was deemed to be critical to success Tab Navigation: Review of the Tool • Portal Tab: • Launches portal for viewing Parameter Selection: • For reps these will default to the rep name & division: • Manager select reps from drop down list Select desired time period, then click refresh

For the sales executives we created a portal as well as up to seven reports SAMPLE DATA Tier Portal • The sales executives went from a single weekly Lotus Notes report to the Sales Executive Portal. • It contains: • Goal Fulfillment • Underperforming “Big Spenders” graph • Active/Inactive Accounts • My Statistics • Cross Media Revenue Performance Review of the Tool Daily revenue and performance information, on ONE page!

For example we provided the sales execs with up to date tracking towards goal SAMPLE DATA Review of the Tool A quick indication of current performance. Commission status corresponds to the meter’s needle position • Red – less than 90% of goal for Tier 1, less than 80% of goal for Tier 2 • Light green – between 90% and 100% of goal for Tier 1, between 80% and 100% for Tier 2 • Dark green – above 100% of goal Tier 1 SAMPLE DATA Tier 2 Daily tracking of commission status. No more waiting until the end of the month to get a sense of progress but it is only an estimate.

We also wanted the provide the sales execs with a ‘quick hit’ of which clients to call first SAMPLE DATA • Depiction of the Top 10 spend variances by customer. • X – axis identifies the ‘big spender’ customers • Y – axis indicates the size of the revenue variance • Variance = revenue for selected period – revenue from the same period last year • Data sorted in order of greatest variance to smallest variance Review of the Tool Information that helps sales execs focus on their accounts – now he/she knows which accounts are behind on spend.

To focus on individual performance, the ranking and commission estimates are on the portal SAMPLE DATA • Estimated Payment • Earned Commission • Revenue performance per property • Ranking comparisons to other SE’s across multiple categories. Ranking occurs within the division and across all outside reps. • Average rate information compares personal average rates this year to last year. Review of the Tool Daily updates to information which was previously provided infrequently, if at all.

The metrics appear both on the portal AND in detail on the reports SAMPLE DATA Review of the Tool SAMPLE DATA • Breakdown of the book of business by active and inactive accounts. • Active accounts: New Account, New Business, or Base Business • Inactive accounts: An account that has not had a transaction in the current month or the previous 13 months. Tracking of book of business. Inactive accounts = opportunities for revenue!

Core to the effort, the sales execs now have a commission calculator report updated nightly SAMPLE DATA Review of the Tool Detailed insight into the commission numbers! • Monthly and period goals. • Month by month commission, payment and bank values. • Ability to see additional commission adjustments including SPIFFs.

Each sales exec receives two performance reports, both with drill down capabilities Review of the Tool SAMPLE DATA • Provides comparison of the sales exec’s performance year over year. • Account by account searching as well as the ability to view the entire set of accounts owned by the rep this year or last year. • Report contains both a detailed and summary option.

For the managers we created a summarized portal as well as sales exec and personal reports Manager Portal SAMPLE DATA Review of the Tool Managers are provided with an aggregate view of the sales rep portal. Regardless of plan type, managers can view both the detailed rep report and aggregate views – right up to the CAO level! Application facilitates performance management conversations as well as revenue analytics.

Another manager report provides sales executive rankings for performance measurement SAMPLE DATA Review of the Tool A ranking of all sales reps that report to a manager. • Ability to sort/rank based on any of the column headers in blue. • Sorting by division enables ranking among the reps in the division. Supports the sales performance measurement processes by enabling managers to view all direct reports at once

User community response has been positive… Review of the Tool Sales Manager: “It was like being legally blind and now having 20-20 vision.” NY Times Corporate Controller: “This is the best thing I have seen in a long time. “ CAO of NEMG: “This is incredible. We need to spend more time with this and really leverage it. Can I get…” Tool Administrator: “ I love it. The tool answers so many questions that I used to field from the sales reps. Processing time is instantaneous, allowing me to spend more time in the analytics.

Implementation of the solution was a bit challenging at first Lessons Learned

Then Excel spreadsheet goaling process at summary level Disparate systems creating confusion. No access to low level data After the fact reporting done manually in Word/Excel No management system to speak of re: sales performance No visibility into commission process – payout, calc, etc Data needs not being met But doing this has paid off, with additional benefits to come… • Now • Web based goaling at the account level with version control • One data warehouse driving all decision making • Real time robust reporting, metrics and analytics • Incorporated into our quarterly business reviews • Complete visibility before the check goes out to the sales executives • More data than we can handle • Future • Cross media and business unit level goaling • Link to new SAP ERP system across all of NYTCo • Continued improvement in reporting and analysis across divisions • Company-wide visibility into sales commissions, revenue and performance • Centralized commission administration across NEMG/NYT • Insight and visibility to changing business model Lessons Learned

A quick look at our next steps Lessons Learned Continue to focus on process improvement • Order entry process • Advertising billing process • Sales commission payout process • Data cleansing Expand opportunities to leverage the tool • Across the remaining NEMG properties • Into the NY Times sales organization • As a driver of sales performance metrics & measurement throughout the organization • Rate • Rankings/performance management Leverage Finance and Advertising Partnership • Create additional training around the application • Continue to improve performance management process between managers and SEs • Org structure • Goaling

Key takeaways Final Comments • Involve the business in each step of the process • Get the right people on the team • Sell the project • Ensure that you have strong sponsors AND regular checkpoints • This is not an IT or Finance initiative but a team effort • Plan for the future • Can’t afford not to invest in performance management and analytics

Questions? Chris Pircio, cpircio@globe.com Dennis Newman, dnewman@globe.com

Better Performance Management Through Robust Analytics