enGetting Started with Sales Performance Management (SPM) Technology

How critical to sales success is the right SPM technology?

Technology is pivotal and there are a number of perspectives that provide us with a strong impetus to make sure that Sales Performance Management (SPM) technology selection is both well-informed and based on a strong foundation of business case value, future state design considerations including processes and organizational governance, and ultimately a successful implementation tying it all together.

SPM solutions are a critical component of an organization’s core business, as it is the linkage between behavior and strategy. While, incentive compensation administration is still a main piece, the broader SPM technology concept is expanding more holistically to include other key aspects which directly impacts how a sales team might perform, including talent development, sales enablement, and territory and quota management. These all-in-on solutions make it easier for sales teams to act more strategically by removing the administrative burdens that come with outdated or home-grown systems.

The Statistics

According to Gartner research’s 2019 Sales Performance Management Magic Quadrant, the entire industry grew 13% in 2018, reaching a valuation of $950 million, with a projected growth rate of 12.5% for SPM for the next five years to 2022. SPM solutions are becoming more sophisticated with more predictive advanced analytics, more accessible through mobile applications, and more integrated. In terms of usage, Gartner predicted that by 2022, 40% of B2B companies with more than 100 payees will employ sales performance management solutions to reduce their hidden incentive compensation overpayments by 3% to 5%. Gartner specifically identified a growth in the use of SPM technology for gamification and territory management, though Incentive Compensation Management (ICM) is the primary driver for the growth of SPM solutions.

Steps to Success

From our experience of managing over 1500 successful technology deployments, we know that it is critical to follow an objective and rigorous process:

1. Assess your current capabilities – evaluate the whole of sales performance management process as a foundation to determine the key pain points, challenges, and areas of missing technology linking these critical processes across the SPM continuum.
2. Articulate a clear vision of the Future State – establish a specific vision of the process you desire to achieve. SPM technology is the enabler, but the design, process, and approach needs to be aligned.
3. Evaluate your ability to drive sales behavior – if the incentive compensation plans designed are not optimal to drive and reward the right sales behaviors based on roles (i.e. direct seller vs. channel overlay) from entire your sales team and modeled expected outcomes, identify design elements that need to be changed.
4. Establish a realistic business case – we commonly see organizations who have a robust platform that is much bigger than what is needed to achieve desired results.
5. Have a rigorous vendor selection process – this is a multi-year investment, requiring the right planning upfront to identify those critical differentiating use cases helping to guide you to the optimal solution.
6. Develop a structured change management process – doing this to support a technology implementation will ensure stakeholder buy-in and return-on-investment (ROI) realization.

The opportunity to invest and the quality of SPM solutions available in the marketplace is continuously growing. The potential for SPM investment ROI remains significant as technology and capability development improves sales behavior alignment with sales strategy and operational efficiency. On the flipside, the cost of getting software and services selection wrong can be equally significant as ROI remains unrealized and difficult technology deployment hinders sales effectiveness.

How do you identify the right SPM solution?

As an independent adviser, we do not pass judgement on the pros and cons of each solution out there, as we strongly believe an organization’s specific critical use cases – from integration to workflow to modelling capabilities – shape the direction towards the optimal platform for meeting their needs. There is no “best” SPM solution out there. However, we have provided a list of questions to ask during the vendor evaluation in a separate blog.

Getting started with SPM technology is no small feat, but it is worthwhile to put in the investment to evaluate your current state of sales performance management software as well as the pros and cons of potential technologies as they relate to your specific sales environment.