Sales Performance Management

Five common sales performance management implementation mistakes

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Has your company recently invested in a sales performance management (SPM) solution? If so, you are likely feeling a mix of relief and anticipation at achieving this milestone. And after the long hours evaluating potential vendors, reviewing proofs of concept and selecting the SPM system that is well suited to your needs, you may feel that you and your team can finally throttle back. However, doing so would be a mistake because you are at perhaps the most critical stage in the deployment of an SPM solution—implementation.

As the IBM white paper Top considerations for implementing sales performance management reveals, decisions made during SPM implementation impact not only the effectiveness of the solution, but also the sales and revenue growth of the entire organization. Drawing on insights gleaned from SPM deployments in companies around the world, IBM SPM specialists have identified five common mistakes that typically occur during this phase. Like flaws in the foundation of a building, these mistakes can eventually undermine the sales and incentive infrastructure of a company. In effect, these implementation mistakes build in inefficiencies as part of the basic code of a new SPM system — reducing the business benefits of the SPM solution and the overall sales and performance potential of the sales team.

The following list distills the aggregated implementation experiences IBM SPM specialists have had with companies worldwide. Review it to help you identify the five most common mistakes that can occur during the implementation of an SPM solution. In addition, best-practice recommendations from IBM professionals enable you to successfully address these problems and reap the maximum benefits of an SPM investment.

  1. Existing, flawed processes migrated into a new SPM system
    To help ensure an SPM solution is operational as soon as possible, many organizations try to save time by migrating many existing, flawed processes into their new system. In the end, while some efficiency benefits may still exist from the new, automated SPM technology, this implementation mistake significantly reduces business benefits in three areas:

    • Reporting – During implementation, many organizations try to save time by recreating all existing reports in the new SPM solution. As a best practice, IBM SPM specialists recommend organizations make the most of the opportunity a new SPM system provides by rationalizing their reporting processes. Simplifying reports and reducing their number can yield enormous savings in terms of both time and IT resources.
    • Compensation plans – Many firms migrate all their existing compensation plans, often with minor variability between them, into a new SPM solution. As a best practice, organizations need to rethink their compensation plans before codifying them into the new system. Reducing the number and components of these plans yields performance efficiencies and long-term cost savings.
    • Process flows – Often, existing manual processes are migrated into a new SPM system. While users may like the familiarity of these manual processes, they can significantly reduce the efficiency and performance of the solution. As a best practice, identifying and automating these manual process flows wherever possible is recommended for organizations.
  2. Non alignment of sales and finance
    Nonalignment of the naturally conflicting priorities between sales and finance can have critical long-term consequences for an organization’s overall sales performance and growth if they are not addressed in the implementation stage of an SPM solution. Today, chief financial officers (CFOs) are looking beyond the top-line results of their sales teams and seeking to enhance the accuracy of strategic planning by playing a greater role in incentive and compensation design. However, finance and sales have naturally conflicting priorities in their views of this area of the business:

    Sales priorities

    Finance priorities

    Increase revenue

    Enhance margins

    Reduce complexity

    Increase sophistication

    Increase time to sell

    Increase self-service

    Increase analytics

    Reduce IT costs

    Reduce cycle times

    Increase regulation and control

    Reduce errors

    Provide rapid information

    For example, viewing a company as a whole, finance often believes that sales reps need to do more administration tasks themselves than they’ve done previously. But sales tends to view these tasks as detracting from the time the sales reps need to be selling to clients.

    IBM SPM specialists have found that successful companies resolve these differences as a best practice in the implementation stage with cross-functional team participation. Cooperative engagement of both finance and sales stakeholders in every part of the implementation helps ensure that the SPM system is capable of meeting the distinct needs of both key groups.

  3. Forgetting the management in sales performance management
    Another common mistake during the SPM implementation stage occurs if the solution is seen primarily as a tool to automate time-consuming calculation and payment aspects of incentive and compensation plans. Although a company may still obtain efficiency benefits in terms of time and cost savings, this mistake means it will never realize the full potential of SPM technology and the significant sales and revenue benefits that derive from analytics-informed management of sales performance.According to the Aberdeen Group report, Beyond the Commission: Will You Stay Ahead of the Maturity Curve, top-performing sales teams are 82 percent more likely than others to use assessment and measurement analytics to match sales personnel to selling role, territory and so on. IBM SPM specialists recommend the best practice of focusing on empowering sales managers during SPM implementation by deploying the full capabilities of their new SPM system, which should include—at a minimum—several elements:

    • Performance dashboards
    • Scorecard data that details numeric (quota) and re-numeric (compensation) progress
    • Customized report design
    • Predictive analytics
    • Historical and forward-looking performance analyses
  4. Nonalignment of the new system to the ways that sales works
    The individuals overseeing the implementation process are often located in the head office, far removed from the sales reps in the field. As a result, while the implementation mistake of not aligning the incentive system to the everyday work processes of sales teams may be understandable, this error can significantly reduce sales performance and, ultimately, the organization’s entire revenue stream.Today’s sales teams are increasingly mobile. If companies are seeking to drive sales performance, simply giving sales reps credentialed access to a central email server is no longer enough.IBM SPM specialists recommend the best practice of enabling secure, remote access to dashboards, scorecards and performance analytics when implementing an SPM system. In addition, the interface access needs to be designed in close conjunction with the mobile devices of the sales reps. For example, IBM implemented an advanced SPM solution for one client with sales compensation dashboards and reports optimized for the iPad devices in use among the company’s 1,400 field sales reps for their daily work.
  5. Overlooking the data insights of advanced analytics
    Sales is all about data and the added-value business insights from data that analysis can provide. In the haste to get a new SPM solution operational as soon as possible, many organizations overlook how analytics can be implemented and integrated into the solution to radically enhance performance and drive sales growth.As a best practice, implementing an SPM solution in conjunction with today’s cloud-based, cost-effective analytics offers organizations not only sales and incentive management capabilities, but also valuable business insights and market analysis at minimal, additional cost. For example, deploying an SPM solution using IBM Watson Analytics provides several added-value features:

      • Cognitive processing capabilities
      • Natural-language interactivity
      • Data visualization
      • Evidence-based insights

Senior Product Portfolio Manager, Sales Performance Management

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