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About Territory Hierarchies and Divisions

A hierarchy is a group of territories and of sales forces (or in Siebel terminology, divisions).

Figure 1 shows an example of a hierarchy with two divisions.

Depending on your business needs, you may choose to have one division in your territory hierarchy or multiple divisions in the territory hierarchy. For large hierarchies, it may be better to set up several divisions. This option gives you more flexibility when running territory alignments. With multiple divisions, you can run an alignment for a whole territory hierarchy or for just one division at a time within a territory hierarchy. Figure 1 shows a territory hierarchy made up of two divisions.

Figure 1. Schematic Example of a Territory Hierarchy Made Up of Two Divisions

Position Reporting Structure and Territory Hierarchy

Usually, but not necessarily, the position reporting structure in the division matches the territory hierarchy. That is, primary employees who are assigned to child territories usually report to the manager who is the primary for the parent territory. For example, referring to Figure 1, if territory 6 is the child of territory 3, the sales representative assigned to territory 6 reports to the sales manager who is assigned to territory 3.

However, this need not be the case. For example, the sales representative for territory 8 leaves the company. You assign territory 8 to the sales representative for territory 10. This sales representative now has two territories and continues to report to the sales manager for territory 4 (not the sales manager for territory 3).

There is a feature in Territory Management that you can use to automatically reassign the reporting structure so that it parallels your territory hierarchy. The reporting structure can be updated territory-by-territory or for a whole hierarchy at time.

One Territory in Multiple Hierarchies

You can include one territory in multiple hierarchies. For example, Territory 1 can belong to both Hierarchy 1 and Hierarchy 2.

One hierarchy must be the primary hierarchy for the territory.

This feature allows you to can create alignments of the same territories that are based on different hierarchies. For example, you can define Alignment 1 for Hierarchy 1 and define Alignment 2 for Hierarchy 2, with Territory 1 belonging to both Hierarchy 1 and Hierarchy 2.

This makes it possible to create hierarchies that organize your territories in several different ways, and to run alignments for all of these hierarchies, to see how the different hierarchies affect the assignment. For example, you could set up multiple hierarchies to test how quotas would change if you reduce the number of nodes at an intermediate levels of the hierarchy.

Only the alignment for the primary hierarchy can be activated. When you activate a hierarchy, the application checks to see that all the territories in the hierarchy have this hierarchy as their primary hierarchy. If they do not, the application does not let you activate the hierarchy.

The other hierarchies are used to simulate other results. You must run major alignments on all hierarchies except for the primary hierarchy. You can run minor and intermediate alignments only on the primary hierarchy.

Running a major alignment on a non-primary hierarchy shows the complete result set for that non-primary hierarchy, but it does not show changes relative to existing assignments for territories in the primary hierarchy. You may need to compare this result set with existing assignments to identify delta changes.

After you have run alignments for the non-primary hierarchies, and you have seen which gives you the best results, then you should make the appropriate changes in the primary hierarchy, so you can run and activate the primary hierarchy.

For more information about hierarchies, see Maintaining Territory Hierarchies.