Mr. Stretch: Callidus Software is a public company that's almost 15 years old now. The focus of the company was originally to sell software licenses that solve a particular business problem: calculating commissions for incentive plans and creating incentive regimes for typically very large sales forces. Historically, Callidus' customers were large insurance companies, and telcos with complex transactions and complicated commission calculations. It sounds like a simple business problem. We're calculating salespeople's commissions and tracking their performance from the data we derive from those commissions. But let's look at it in terms of an auto dealer or a car manufacturer-dealer network. For example, an auto dealer in Europe hires 15,000 salespeople scattered around the continent, with about 1,500 dealers and salespeople per dealership. Each dealership is selling a range of 10 vehicles and each vehicle has potentially 10 commissionable elements, such as a financing agreement, leather upholstery, alloy wheels, satellite radio, etc. All of these elements have incentives tied to them to drive the desired behavior from the salesperson. Multiple people in the supply chain receive benefits from these incentives. Callidus automates the process of calculating the commissions based on the incentive plans created through software. It's a massive data management problem and a highly complex algorithmic computing problem.
Since we started out addressing these issues, we've added a number of different elements; in particular, we created what we call the "sales talent life cycle." We automate the process of on-boarding, deploying, paying, evaluating and improving the sales force For insurance companies, we offer solutions that automate the on-boarding processes of dependent agents and salespeople. We can track licenses, territories and appointments for each individual producer. With Allianz, for example, we help with the part of the process that says, "Here's a new agent. He wants to sell Allianz's products. How does he get contracted and set up to sell those products? How does Allianz know that he is licensed and credentialed to sell those products?" Callidus Software solutions and services automate and streamline this process.
In the U.S., there are literally hundreds of thousands, if not millions, of people that sell insurance policies on a commission-only-based contract. We track the relationship between the producer and the carrier, including how they became contracted with the carrier and their commission payments. Our software then allows the carrier to evaluate the effectiveness of their incentive program across all of these producers. Managers can easily make adjustments to the incentive plan and influence the selling behavior of the producers in order to meet their business targets. In some cases, we're dealing with over a hundred thousand agents for some insurance companies. Not only do we calculate commissions, we also create the commissions statements for all of these independent agents.
Callidus Software is about making something very complicated very simple - calculating complex or cumbersome commissions, and creating the right incentive regimes to improve performance of sales executives and the sales force across multiple channels and regions. With the commissions data that we create and record, everyone can pinpoint the performance of the company, their products and services, their customers and their salespeople with straightforward reports. We help companies drive performance through incentives, accurately pay the sales force and help avoid leakage, overpayments and fraud through an automated process.
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