Why Outsource Your Sales Performance Management?

March 13, 2019

More and more companies are recognizing the need for a formal Sales Performance Management (SPM) program rather than a commission management system comprised of manually edited spreadsheets, emails, and disconnected CRM and sales data systems. According to the 2019 Gartner Magic Quadrant for SPM report, the SPM market grew to $950 million in 2018, a 13% increase from the previous year.

However, not all companies have the internal resources to support the investment of a new SPM system. On top of costs for the technology itself, there is extensive training required for continued maintenance and plan changes over time. While many organizations maintain their SPM solution internally, others outsource SPM and analytical reporting processes because they don't have the required in-house expertise to manage it as they scale and/or focus on other business priorities.

Considerations for outsourcing SPM

Ensuring that you have the right skillsets to support your sales compensation plan design, quota and territory alignment processes can help you manage commissions on time and on budget. Here are some factors to consider:

In-house Expertise – Does your SPM system have the support it needs internally to be sustained as a long-term solution for both business process and the development of human capital? An organization that doesn't already have the in-house skills needed to manage an SPM system will need to decide if hiring fulltime SPM experts makes sense from an overall business perspective or if outsourcing to trained experts is a better and more cost-effective approach.

Predictable Costs – Sales teams need to make costs as predictable as possible to stay within budget and maximize revenue, but when managing SPM internally your organization could struggle to reach a predictable cost model due to the range of skills required for effective management. When outsourced, the company providing SPM services typically agrees to a fixed fee pricing model, helping to keep costs predictable.

Flexibility – In order to achieve maximum flexibility, highly-experienced IT resources are typically needed to configure and optimize SPM systems. With an outsourced provider, the sales organization has access to well-trained and experienced resources on an as needed basis. Less experienced resources usually require more time and are likely to make more errors.

Standards and Best Practices – SPM platforms are complex and fall into the category of services that should be supported by standards and best practices such as the Infrastructure Technology Information Library (ITIL) and managed by defined processes around incident, change, and release management. The decision to provide internally-managed SPM will depend on whether your organization has the required best-practice expertise. An organization that outsources these requirements should automatically gain standards-based expertise from an SPM services provider.

Ongoing Improvements  Any new system implementation requires ongoing optimization for greater efficiency. In-house IT staff may be able to monitor and optimize the SPM system depending on the future needs and requirements; however, an SPM service provider will be able to identify and implement ongoing changes based on the stated contract.

Based on the above factors, how do you determine if outsourcing your SPM implementation and/or operations is right for your organization? Three critical steps include:

  1. Assess your current state and capabilities in terms of technology, business processes, business intelligence and skillsets.
     
  2. Determine what capabilities are required to achieve your desired future state whereby annual processes are effective, accurate, and timely.
     
  3. Develop a business case for change that illustrates both tangible benefits (e.g. increased revenue through more effective plan design) and intangible benefits (e.g. improved decision-making processes and greater employee satisfaction).

Less Pain, Better Planning

Outsourcing your sales compensation management at minimum should eliminate the pain of annual sales compensation planning and improve the overall effectiveness of your SPM operations without breaking your budget. One solution that OpenSymmetry offers is OS EDGE, a comprehensive suite of SPM managed services. This ranges from as-needed post-implementation support to full, comprehensive management of the SPM program.

Full, comprehensive outsourcing

For those looking to outsource both the SPM technology implementation and ongoing operations, OpenSymmetry delivers a holistic managed services offering called OS EDGE 360 Comp.

Leveraging Gartner-recognized, leading incentive compensation management (ICM) technology from IBM, OpenSymmetry delivers a full managed services solution to help organizations achieve and maintain a fully-optimized sales compensation program, without needing to research vendors or provide internal resources and training.

OS EDGE 360 Comp offers:

  • Micro and macro modeling capabilities
  • Best-in-class reporting, analytics and workflow
  • Flexible solution allowing change when needed
  • Tailored support, ensuring appropriate coverage
  • Automated workflow (e.g. disputes & plan approval)
  • Data management and error handling

OS EDGE 360 Comp is able to deliver substantial, ongoing benefits that include:

  • Time to focus on strategic priorities – With an optimized and flexible process, you’ll save admin time and increase productivity among sellers.
  • Informed decision-making – Accurate sales performance analytics & reporting give you the power of reliable forecasting & modeling, making it easier to drive sales-impacting decisions and quickly-adapt to changing needs and goals.
  • Long-term scalability – Standardized processes and integrated technology and data sources set you up for growth and ongoing, repeatable success.

For more information about OS EDGE, visit our website. To learn more about OS EDGE 360 Comp, download the data sheet here.

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