Is there a difference between SMB/Commercial & Enterprise SPM platforms?
Understanding the key differences will be critical when it comes time to select your application.
WHAT IS THE BIGGEST DIFFERENCE BETWEEN SMB/COMMERCIAL AND ENTERPRISE SPM PLATFORMS?
Companies are typically classified by their revenue, employee size, or the number of customers. Small businesses have fewer than 100 employees and less than $50 million in revenue while medium-sized businesses have less than 1,000 employees and less than $1 billion. Large enterprise businesses are substantially bigger, both in employee size and annual revenue.
However, employees and revenue metrics do not accurately reflect the needs of software users. When considering an SPM application, companies should instead focus on; the number of payees, data management complexity, the level of sophistication regarding their crediting and compensation plans, and lastly, their reporting/analytics requirements.
The market perception is that SMB organizations can use less sophisticated applications without the need for customization. Likewise, the perception is also that enterprise companies will require more sophisticated solutions due to the size of their organization or simply that they have a high number of people on sales compensation plans.
But are those perceptions accurate?
Even the smallest organizations may require enterprise-level applications to support their current and future organizational structure. Conversely, midsized enterprise or large companies may have already streamlined their operations or may choose to build in-house instead of buying a vendor application. Understanding the size of an organization should not be the driving factor when looking at solutions.
The content provided below is designed to showcase specific areas where solutions may differ as it relates to their capabilities in meeting the needs of a complex SPM program vs. a program that is more straightforward. Simply put, in this space it can be difficult to tell which systems were designed to support what we may consider an enterprise sales compensation program and those that may not and as such, this paper will attempt to call out specific components that an SPM team will need to consider when bringing vendors in to be evaluated.
Complex Crediting: Solutions vary greatly in their ability to handle complex crediting and this should be a consideration when looking for a solution to meet your company’s needs. As an example, a company that needs to credit more than 10 payees for a single transaction, or the credits have a more complex rule logic, will want to leverage real life scenarios during the product demos. Given the potential coverage gaps, less sophisticated solutions may require the crediting logic to be handled outside of the solution or necessitate the introduction of custom code to try and meet the client needs. Either case is considered less than ideal. It will more than likely require the administrative team to work in a less than ideal situation and may incur additional expenses if changes to the credit logic are required on an ongoing basis.
Volume Processing (transactions & credits): Most of today’s solutions are able to manage reasonably large amounts of transactions when processing incentive compensation (e.g. 100k’s of transactions per payroll); however, systems tend to differ when clients are looking to process multiples of this and then potentially multiply this again by the number of credits being generated by a single transaction. Then to make matters more complex, companies will at times need to re-process prior periods. As some of the SPM systems are unable to handle large transaction counts in a timely manner, they will often recommend workarounds by moving crediting outside of the system or completing some level of aggregation before loading the data into the system for calculation processing. Similar to the workarounds for complex crediting, this is not ideal and tends to create additional processes and challenges.
Multiple Business Unit Limitations: Even the smallest firms can have multiple domestic and international business units. Your SPM system should be able to support all business units and global entities in a single SPM instance, but current limitations including data segmentation, process coordination, and security access can cause challenges for less sophisticated applications. As a result, companies (regardless of their size) may need to pull these requirements into their evaluation to ensure the solution will meet their needs on a global level. Companies that don’t do this may end up having to purchase and maintain multiple instances of their SPM solution, limiting their ability to consolidate data or having to find workarounds when language capabilities don’t support local payees and administrators. One overarching challenge resulting from a system that does not provide true global coverage is that it will hinder a team’s ability to develop and implement a coordinated set of processes and controls in support of a best of breed SPM program.
Reporting and Analytics: Unfortunately, SPM systems vary greatly in their ability to meet clients’ needs when it comes to analytics and more advanced reporting. There are a wide range of capabilities between solution providers in the SPM space. Often it is the more sophisticated clients (or clients with more advanced reporting needs) that end up seeing challenges in getting what they need from a vendor’s solution. Common issues with some of the vendors is their ability to access data from the system to either develop analytics dashboards within the tool itself and/or export the data so that it can be used by an external platform. Another issue created by some of the systems relates directly to the management of the reports and dashboards. While some of the solutions can be configured to meet clients’ needs, the level of expertise needed to maintain these systems can end up being much more extensive than initially expected. Reporting and analytics are often one of the key drivers of SPM investments, so we recommend companies ensure enough time to evaluate the vendor capabilities when the requirements are more sophisticated in nature than one will find with a larger sales organization with greater complexities.
Payee Record Continuity: Some solutions are limited when it comes to management of multiple payee profiles. As an example, if a payee is attached to multiple plans at one time (e.g. transferring between roles with overlapping periods), some solutions require the administrators to maintain additional payee profiles for a single sales rep causing additional management needs and further causing the payee to have to log into the system as a different user to see their reports. While managing through workarounds can be accomplished, this tends to be a significant problem for larger organizations with thousands of payees and/or consistent changes within the sales hierarchy.
Calendar Setup: Calendar setup can be challenging in some applications, as they may have a restricted or limited ability to support unconventional or multiple calendars within an organization. Larger or more complex organizations typically need to credit different groups of payees on different schedules (including monthly, quarterly, or annual frequencies). A system that won’t allow this via out-of-the-box configuration will create significant challenges for the SPM administrators from an ongoing management standpoint. While there are workarounds, some systems may require custom objects when building and maintaining, and/or developing additional crediting rules and environments so you can support different payout frequencies.
Multiple Sales Hierarchies: Smaller organizations may only require a single hierarchy for managing both credit roll-ups and reporting. That said, larger or more complex sales organizations may employ disparate hierarchies for both reporting and crediting (to support channels and cross-selling) and as a result may find less flexible solutions extremely limited in their ability to meet their needs. Another potential challenge may arise if you need to import product hierarchies to help drive crediting logic and should be considered if this is an integral part of your program. If your organization expects to use more than one hierarchy, make sure this requirement can be met (out-of-the-box) by your selected vendor. The workarounds are not worth the headache.
WHEN YOU NEED SPM ENTERPRISE CAPABILITIES
Extensive and diverse data requirements, a large number of payees, varied hierarchical sales organizations, and complex sales compensation plans are all reasons why you may need an enterprise level SPM application. Leading enterprise solutions are robust applications that may require less customization, fewer additional modules, and overall, less time trying to fit your organization into the vendor’s box.
While we recommend a comprehensive SPM framework development, understanding your data criteria will help you choose potential vendors that offer the flexibility you need to maximize the value of your SPM investment and customer success.
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OpenSymmetry enables clients to achieve greater operational efficiency and get better sales results. We are a global consulting company specializing in the planning, implementation, and optimization of industry leading technology suppliers of sales performance management solutions.
CONSIDERATIONS WHEN REPLACING YOUR SPM TECHNOLOGY SOLUTION
Understanding the challenges companies face when migrating Sales Performance Management (SPM) technology solutions can be a significant undertaking. This paper is designed to provide high-level guidance to stakeholders who carry this responsibility. As OpenSymmetry has helped many companies evaluate and effectively migrate to new technology solutions, we are sharing seven key areas that we find critical to completing this kind of effort.
1. CURRENT STATE ASSESSMENT & FUTURE STATE PLANNING
A critical initial step before migrating to a new SPM solution is understanding how well your current program is performing across people, processes, and technology. From there you can devise a future state vision for how your SPM program should operate. By understanding both current state gaps and what your future state needs look like, you can effectively begin defining requirements while also clearly articulating success criteria. It’s important to recognize that your previous or initial SPM implementation may not have gathered all necessary processes/requirements, so it’s vital to take a fresh, holistic view in this first step.
2. DATA INTEGRATION
One of the most complex and time-consuming requirements is determining how to best leverage current source data feeds to support the new platform. Within the context of your current state assessment and future state planning, the team should review what their reporting, analytics, and any future state compensation elements needs are to ensure a meaningful inventory of data requirements are defined. SPM solutions vary in terms of how data is gathered, translated, and uploaded into the system. Some solution applications may have a standardized format requiring additional configuration, whereas others may have the ability of data field mapping, which provides additional flexibility. The ability to own the data translation from your source systems to the SPM platform is key. Another focus point is to ensure that you evaluate all manual feeds to incorporate automation, as well as any additional error validation processes.
3. HISTORICAL DATA
Migrating historical data is an often-overlooked requirement when moving from one SPM platform to another. To keep costs down and minimize complexity, clients may want to ID only the data that is needed to ensure ongoing management of comp (e.g. payment history) and then transfer detail-level data into data storage to be referenced at a future date. It is important to consider what historical data is needed for the new system for reference on future payments
4. PROCESS IMPROVEMENT
Each SPM solution may require users to interact with the system in different ways. This area may need additional attention, especially as it has the potential to improve processes currently employed to manage sales compensation. Understanding the impact a new system will have on current processes, as well as those who manage the processes, is critical to ensuring a successful launch and ongoing management of core processes. As an example, two of the leading solutions in the market have very different expectations regarding the skills users need to possess to effectively maintain compensation plans and reports and, in some cases, execute the day-to-day activities. Defining expectations of your staff related to the new technology, prior to the project, will ideally give your organization the necessary time to introduce training that ensures effective ongoing management of the program.
5. WORKFLOW
SPM solutions vary widely in their ability to support automated workflow. As a result, there are significant challenges for sales compensation teams related to an SPM migration. Capabilities can range from templates to existing documentation, levels of routing, and even implementation of a stopgap for a payee to accept plan documentation prior to payout. Within the context of your future state definition, capturing and defining areas where automated workflows can be leveraged is a necessary part of the core requirements. Before a new system is deployed, it is important to map these processes out to drive user adoption, leverage the SPM system as an auditable repository, and minimize email management.
6. REPORTING & ANALYTICS
It is critical to develop a holistic vision of information distribution to the various stakeholders and tools used to deliver this content (i.e. static pages vs. dashboards). Similar to workflows, different vendors have various capabilities related to reporting for the end users. Assessing these capabilities against your business requirements is imperative to the success of the roll-out. For example, some vendors require more robust configurations in the system (e.g. crediting logic) to enable specific analytics capabilities, while some solutions, architected specifically for reporting and analytics, have much more robust capabilities. Another area for consideration is the use of the vendor’s reporting solution against your in-house technology stack. Some solutions make it easy to port data into new environments, which could be a consideration in helping to keep the number of reporting tools requiring management to a minimum.
7. DEPLOYMENT
The implementation of a new solution should be designed to minimize the impact on payees and managers. One of the most critical aspects of your effort is assessing how all stakeholders will be impacted and how to mitigate any disruption. It is important to identify upcoming changes for your sales organization, administrators, and other internal partners with a plan in place to offer the steps needed to ensure the best chances for solution adoption.
The first step when considering a new SPM platform is an assessment of your current program and the development of a future state vision. OpenSymmetry offers a no-cost workshop to help you gain an understanding of how your current SPM program performs against your needs and industry best practices, as well as a readout on current solutions in the market.
Leveraging the OpenSymmetry assessment methodology and knowledge of the leading SPM providers, you will be equipped with:
• A current state analysis scorecard
• The framework for a business case to support change
• Contemporary intel on the SPM market and SPM vendor capabilities
• High-level deployment and license cost estimates