Focusing on the SPM Workflows
Definitions of Sales Performance Management (SPM) vary, but most would agree it includes:
- The creation of variable compensation plans
- Inbound/outbound data integration
- Territory and quota planning
- Calculation of sales commissions and other forms of incentive
- Reporting and analytics for administrators and payees
- Forecasting & scenario modelling
- Related workflows
For me, the aspect that is most often overlooked when companies are considering technology are the SPM workflows. I think this is because most organisations have started looking into SPM technology due to challenges with managing complexity. Complexity in terms of their compensation plans and of their data landscape. This isn’t a problem that typically occurs overnight. It’s built up over the years as organisations expand into new markets and acquire new businesses. So, the problem is the growth in complexity and the significant effort involved in accommodating it. Fine, but I would argue that, regardless of whether you run a simple operation or are part of a multinational behemoth, SPM is all about process.
Most compensation administrators will straightaway think of the monthly/quarterly/annual pay cycle when they think of process. If you are struggling to get by with Excel, or an old home-grown solution, the processing of payments will most likely be a long series of manual tasks: data extraction, manipulation, computation, validation, lots of final checks, and ultimately, approval.
With a recognised SPM technology in place, the manual effort is significantly removed or eliminated altogether, but the sub-process of approval will remain. Most people can accept high automation, but when large payments are made to your sales force, the buck must stop somewhere. Somebody has to say “yes.” Usually quite a few people. Variable compensation represents a significant financial outlay and is understandably a major focus for your sales force…especially when errors creep in.
Once organisations start looking closely at SPM technology, do they then realise how many processes it can, and should, accommodate?
Examples can include:
- Territory and quota planning
- Compensation plan approval
- End of period approval cycles
- Management By Objectives (MBOs)
- Inquiry/Dispute management
- Whale deals management
- Manual adjustments (e.g. splits)
The above may not all apply to your business, but the benefits of being able to incorporate your business processes in your SPM application are significant:
- Auditability – being able to demonstrate who did what, why, and when
- Simplicity – all SPM processes in one place, with no need for external documentation
- Editability – as your processes change, so can your workflows
- Flexibility – the ability to route inquiries based on your business criteria
- Reportability – having accurate data in one place makes reporting on it straightforward with the insights gained helping improve your SPM operation
If you’re starting to explore the SPM technology market, don’t overlook the processes you should be looking to incorporate, and of course if you’re after a little guidance, get in touch with OpenSymmetry for an open discussion.
Article written by: Adam Thorn