Six trends in sales performance management

By Aliki Droussiotis, director of MCI Consultants.


Johannesburg, 22 Jul 2013
Read time 4min 40sec

Sales performance management (SPM) solutions are proving to be incredibly valuable for organisations that adopt them, and those that implement compensation management solutions can expect to reduce errors by more than 90%, reduce processing times by more than 40%, and reduce IT/administration staffing by more than 50%.

SPM solutions are becoming attractive as there is increasing pressure on compensation teams to deliver more. They need visibility, analysis and oversight into the entire variable compensation process; and increasingly, they are relying on their sales operations, compensation and cross-functional teams to provide more sophisticated insights into what is working and what is not.

While the majority of organisations still manage incentive compensation with home-grown solutions or complicated Excel spreadsheets, more organisations are retiring these solutions in favour of a more flexible, customisable and streamlined incentive compensation and sales performance management system; and with this rapid SPM adoption, new trends are starting to emerge, says Aliki Droussiotis, director of MCI Consultants.

Below are the top six trends influencing organisations that are considering the adoption of new software solutions to help them improve sales performance and incentive compensation practices.

Trend 1: Increasing business complexity

According to recent studies, businesses have become more complex in the past three years and speed is now essential when it comes to producing results, especially since the volume of data stored over the past couple of years has risen by a staggering 62%. With this hectic pace of change, it is easy to see why existing technologies, plans and processes in sales compensation, ie the home-grown and spreadsheet-based systems that were implemented years ago, cannot keep up with these new requirements. Thus, today's compensation systems should be able to process millions of transactions a day, efficiently and effectively, in order to manage sales reporting and incentive compensation calculations.

Trend 2: Sales adoption of mobile devices

The explosion in the use and adoption of smart devices is inspiring new questions by sales organisations, such as 'what is the appropriate mobile device for the sales team?', 'what is the right set of functionality that needs to be delivered to the mobile device?' and 'how can the features of the device best be optimised to serve the organisation's distinct needs?' In this regard, there are three key considerations when it comes to mobile adoption - device support, ie what platform should be adopted; functionality, ie ensure the information presentation is appropriate for the specific device; and culture, ie is 'right here, right now' the order of the day?

Trend 3: Increasing role of finance

From recent surveys that have been conducted, successful organisations work with finance not only to agree on the sales plans and drivers, but to agree on timelines, decision-making processes, constraints and potentially conflicting viewpoints on plan design, implementation priorities and targets. It is vital that the combined group needs to come to a consensus and then communicate their shared goals across the organisation, as failure to do this often leads to different priorities and misaligned goals, which in turn leads to inconsistent and often conflicting communications being delivered to the sales organisation. A co-ordinated effort leads to common goals, sales alignment and increased performance.

Trend 4: Increasing requirements for audit, compliance and visibility

There is an increased need for oversight in the world of SPM and a growing desire to scrutinise the inner workings of the compensation system and its related processes, as there is now much more focus on transparency and compliance. Much of this is as a direct result of new industry regulations and the associated audit processes, as well as the need to better understand how the sales operations, HR and finance processes are working with respect to SPM.

Trend 5: Transition to the cloud

With the demise of the view that cloud computing was only appropriate to SMEs, large organisations are now examining the compelling arguments for moving in this direction. These include a reduced burden on existing, overburdened IT staff, faster project start times, reduced initial investment and shared risk pricing model, and improved vendor support, as they are able to manage the entire hardware/software environment. In addition, cloud computing has matured and software vendors have expanded their capabilities, offerings and platforms.

Trend 6: Integration with more applications

As SPM systems mature, it is often the case that they house the highest-quality information in the organisation about who is selling what to whom, and at what price, and, as commissions are paid from this data, it is normally the most scrutinised, up-to-date and accurate information available in the company. Organisations are looking to leverage this asset, typically by demanding new management reports, which results in the need for more complex and broad-based reporting that in turn often requires a new and different set of source data. Consequently, this natural evolution creates the need to make this information available to an even broader set of recipients by feeding it into other systems.

For further information, please contact Aliki Droussiotis, MCI: tel (011) 454 3420, fax (011) 454 3417, e-mail aliki@mci.co.za.

Editorial contacts
Global Research Partners Paul Booth (082) 568 1179 pabooth@mweb.co.za
MCI Aliki Droussiotis (011) 454 3420 aliki@mci.co.za
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