The Relationship between Mixology and Sales Performance Management

April 27, 2016

Have you ever tried to make the perfect Manhattan Matai or Piña Colada? There is a science behind it, but also an art to cater to individual taste preferences; this is Mixology. The perfect cocktail is made up of the right Foundation by including the finest ingredients, Execution by applying the right mix and presentation and Success by setting the perfect finish.

In the same way, an optimal Sales Performance Management (SPM) solution is governed by individual circumstances but can be described in the same terms:

  • The Right Foundation (i.e. The ideal mix of ingredients) – Future State Design, Business Case Development, and Change Readiness Assessment.
  • The Right Execution - Software Selection, Implementation Planning, Software Deployment, and Change Management.
  • The Perfect Finish – Business Process Optimization and Sales Transformation Outcomes.

In this blog we look at these key components in more detail. It’s a complex challenge.

The Foundation (Future State, Business Case, and Readiness including Plan Design)

There are three key ingredients to a building a successful foundation for optimal Sales Performance. The first is being able to articulate the Future State. In other words, what SPM is going to look like once technology has been deployed. A clear and achievable Future State includes having a pragmatic understanding the Current State Level of SPM capability, how SPM can be optimised, your roadmap and the level of return on your investment.

The second aspect is ensuring the right incentive plans and processes are in place. This aspect includes making sure incentive plan design effectively aligns business strategy and seller motivation, optimizing processes and workflows. Simply automating the current state will reduce ROI. Software won’t solve a poor plan design or set of processes.

The third component is change readiness. This involves making sure the right resources are in place, there is a clear data strategy and project governance. Internal resources are likely to be committed to managing an ineffective current state, so this needs careful planning. The second element is a clear strategy for implementation including phasing and transition to Business as Usually. The third element is data- strategy and testing. Many projects fail because of poor data integrity.

The Execution (Software Selection and Deployment - Managing Change)

In order to make sure there is clear commitment to SPM transformation, it is important to be able to communicate some key messages including:

  • Quantifying Impact – On business strategy and what happens if transformation doesn’t happen including missed targets and lost customers. Also, on process efficiency cost through manual workarounds, lost cycles and inaccuracies. Finally, the cost in project delays and change orders.
  • Articulating the Impact on Stakeholders – Sales reps, management and execs, sales ops and admin and HR and Finance. Each has a perspective on SPM transformation.
  • Understanding the Longer Term Picture - In terms of market changes including the search for greater efficiency, regulatory pressures, the need to respond quickly to changing market places and the imperative to drive sales channel effectiveness.

Gartner studies quantify the impact – 5-10% increase in sales[1], greater than 50% reduction in resourcing to manage sales compensation. Greater than 90% improved accuracy of payments[2].

The Perfect Finish - Maximising Benefits of New Solution, Expand and Transform

To achieve the Perfect Finish requires you to optimise business processes to compliment the new Incentive Compensation Management (ICM). Processes should have fewer steps and more measurable KPIs. In addition, a new responsibilities map for the sales operations function will ensure that the right level of resourcing can be achieved. This will enable the full benefits from the new solutions to be realised.

Incentive Compensation Management implementations may only be initiated in one division. The perfect finish should see successful roll out across the business.

Finally, robust governance should see regular review of plan design, configuration updates and business process adjustments to ensure the solution remain agile for changing circumstances. So what benefits can you expect?

At the event two guest speakers led a round-table discussion on their respective journeys in the deployment of IBM’s ICM solution to automate their Sales Performance Management processes.

One speaker pointed out that commissions for the recruitment sector is a key area for the business but one that can be a difficult area and a big burden. Previously for ReThink, this process depended on a single individual. Now it can be transferred and managed by the Payroll team. The ICM system has reduced the noise from the salesforce, ensured effective audit and compliance, reduced overhead, reduced admin, streamlined and standardised the system and brought rigour to commissions management. Finally, there is no internal IT requirement with the solution hosted in the cloud with OpenSymmetry providing a tailored support and change service.

For our other guest speaker, the implementation of ICM has enabled the harmonisation of commission plans and processes and provided a clear assurance that the company was paying compensation accurately. It has also transformed the administration team to greater proactivity.

Both organisations continue to focus on the finish, so expanding the system and increasing the ROI of the system.

Other OpenSymmetry clients can also provide a compelling picture of the impact that SPM automation can make:

  • Elavon experienced an 85% improvement in compensation payment processing and a greater visibility of performance which helped retain top talent.
  • AAA saw a 66% acceleration in compensation plan development and 1 day per week saved in the time to calculate payment.
  • Close Brothers found a significant reduction in shadow accounting and greater transparency which reduced plan risk.

The positive experience of clients is consistent and persuasive.

Conclusion

Just as the perfect cocktail requires an understanding of the right mix ingredients, execution and flawless presentation, SPM requires the same careful preparation, design and deployment. Articulate a future state that is compelling for stakeholders, build a business case where ROI makes the investment decision easy, chose proven software and deploy with change management that delivers sales transformation.

...And don’t forget the umbrella!

With thanks to our speakers for providing real life examples of ICM implementation for other clients starting the mixology journey.

Click here link below to download the full presentation. For any questions, please contact us today.


Download: Do You Have the Right Sales Performance Management Mixology?


 

 

[1] Gartner Customer 360 Summit, Using Sales Performance Management to Significantly Increase Revenue,Patrick Stakenas, May 2013.
[2] Gartner, MarketScope for Sales Incentive Compensation Management, Michael Dunne, March 5, 2010.

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