Paying Your Sales Organization

Sales Performance Management Systems in Review

by Michelle Seger

Here at SalesGlobe, one of the biggest complaints we receive from salespeople is that they don’t understand how their incentive compensation works and how they are getting paid for their effort. Meanwhile, one of the biggest complaints we hear from compensation administration professionals is around how much time they spend resolving disputes with Sales. Although this does not encompass all the problems associated with manual payment systems, it probably rings a bell (or should I say an alarm) with most of you reading this. Hence the creation of Sales Performance Management (SPM) software. This software is created to automate much of the compensation administration burden, increase calculation accuracy, and ensure timely payments. Today the software is designed to provide insights and reports to sales, helping everyone from management to front-line sellers understand the correlation between performance and pay.  As the name implies, “Sales Performance Management” continues to evolve into much more than pay management and reporting. Many of the software providers now offer tools to support quota setting and management, territory optimization, and pipeline management.

With all of the options in a rapidly changing space with new disruptors making product claims and promises, it can be difficult to navigate what’s available and understand where to start. As a consulting advisory that is solving for the biggest sales challenges companies face, I asked a team of our consultants to give their objective view on a few of today’s most widely used SPM systems. Since the pandemic, I know that companies are accelerating their technology investments, and I also know that providing visibility to your organization and timely and accurate payments is becoming even more critical given the rapidly changing environment for sales.

What Are Companies Doing Without SPM?

Less than one third of companies are using SPM systems today. That means that the majority of companies rely on spreadsheets and complex processes, often with only one or two people who truly know how to calculate certain plan elements. These spreadsheets are often managed locally. It’s very time consuming and in fact nearly impossible to provide a consolidated view across the company. It is not unheard of for large organizations and manual system to have anywhere from five to twenty-five or more administrators calculating incentive compensation payouts, creating not only a costly and error prone process, but also a lack of transparency. That is why, “We don’t understand how we are getting paid,” is one of the most common complaints I hear from sales reps.

SPM systems take the automation of sales compensation processes even further, allowing sales personnel to perform “what if” scenarios on specific deals and view their performance ranked against their peers, driving actual sales behaviors toward stretch goals and gamification, and helping the leadership team understand their true cost of sales.

Here is a summary of five SPM players we come across in our work, and a snapshot of current capabilities and company fit. Enjoy the read!

ANAPLAN

Anaplan allows customers to develop solutions across all aspects of SPM to fit their unique business environment. Its scalable framework and open architecture are designed to allow for complete customization, which sets this system apart from its competitors. Anaplan is known for its ability to interconnect major sales processes across adjacent business functions. For example, as a “Connected Planning Platform,” Anaplan creates the connective tissue between finance and sales for end-to-end sales planning and operations starting with territory and quota setting processes, tracking progress through forecasting and rewards through incentive compensation calculations.

Anaplan is a good fit for businesses that demand a high level of customization, especially large enterprise environments with complex systems that need to integrate and cannot easily adapt to commercial off-the-shelf software.

beqom

beqom is a cloud-based SPM and Total Compensation software tool that offers SPM and a broader scope of total rewards functionality in one solution, allowing for a consistent system of record. For most large organizations, when we look at compensation it encompasses base pay, short-term and long-term compensation strategy, and offerings — all of which encompass non-sales roles. Then there is the complexity of sales incentive compensation which is treated very differently from non-sales roles from design to management.

The dual functionality of beqom software combines data from more traditional forms of total rewards such as base and annual bonus with the robust and complex sales world of territory management, goal assignment, sales crediting, and incentive compensation processing from the sales organization.

A cloud-based SPM and Total Compensation software tool, beqom provides the functionality of a Total Rewards management tool with an SPM system, allowing for one consistent system of record. That said, the real strength in beqom’s solution is its ability to address complex SPM initiatives while expanding the scope further to include other compensation and rewards functionality.

SAP CALLIDUS CLOUD SPM SOLUTION

This is a robust and advanced solution for Sales Performance Management offering a scalable, object-oriented, and data-driven design strategy geared toward companies where scalability and flexibility are essential. It has long been a leader in the SPM arena, pioneering many of the capabilities that have become prevalent in the industry. CallidusCloud is a good fit for companies with large and advanced operations, with a business intelligence driven strategy where sales and sales compensation are critical to continued growth in highly regulated or competitive markets.

But CallidusCloud might not be for everyone. As the “Cadillac” of SPM solutions, it’s more advanced and complex than many companies require, and for enterprise-wide complex systems it makes the most sense. For smaller companies or those with manual operations that are just getting their data organized or just venturing into the SPM automation arena, there are other options that are more suited to your business. That said, CallidusCloud will not disappoint when it comes to the flexibility needed to cover a complex hierarchical global organization.

VARICENT SPM SOLUTION

Here is a strong solution that has been proven to provide sales process efficiency gains and satisfaction across the spectrum of small to enterprise companies. Varicent’s truly integrated approach to SPM, coupled with the automated workflow engine and emerging AI capabilities make it a strong investment choice for sales process automation, from planning through payment. Its intuitive front end and native integration to Salesforce make adoption and usage an easy barrier to overcome. A stepwise implementation of the system’s capabilities from quota setting and territory management through compensation and performance management, including operational governance and predictive business modeling, provides your business with the tools it needs to grow and adapt in a changing marketplace.

The system allows for more customization than some of its competitors, which means the initial implementation can be more complex, but is more apt to meet your needs. This can be best solved making sure you have an implementation partner that has proven success with Varicent implementations in complex environments and that your team is engaged to ensure you optimize the tool to meet your business needs.

We are keeping our eye on Varicent. With continued investments to keep pace with the changing needs of the changing sales landscape, you can be sure of its functionality, ease of use, excellent performance in exploring the biggest pain points of sales effectiveness, and its ability to bring you the right information to make better decisions to support your business.

XACTLY SPM SOLUTION

Xactly is one of the most customizable SPM systems available, offering customers a toolset that readily adapts to their business model and lingo. Its pre-defined data model and out-of-the-box dashboard “pods” make the initial lift of implementation much easier than some competitors. At the same time, Xactly has a robust set of features spanning the entire SPM spectrum, including one of the more advanced Territory Management and Optimization tools. It also offers native integration with SalesForce, the number one CRM tool used by companies today.

With all of this capability, there are limits to its customization abilities, so make sure that any advanced scenarios and custom requirements are discussed up front during discovery. While offering the benefit of an easier implementation lift, you should still consider investing the needed resources to participate in discovery, design, training, reporting, and governance to optimize the results for your organization. For many companies not requiring the customization that some other tools provide and the integration with multiple systems, Xactly is your choice.

Michelle Seger is Partner at SalesGlobe, a consulting advisory that solves sales challenges. We have deep expertise in incentive compensation and technology, and we can help you with your SPM assessment and selection process. We also assist with implementation and ongoing support roadmap needs. Contact us to discuss your biggest sales challenges.