Guest post from Kevin Gray, product marketing manager, Varicent, IBM Business Analytics
Although there are many diverse and wide-ranging definitions of Sales Performance Management (SPM) that include business processes, people, and best practices from a software and technology perspective, SPM is essentially a comprehensive solution that helps organizations drive sales alignment from strategy through to execution, while improving efficiency, accuracy and timeliness of the associated administrative processes.
SPM supports the business processes of Territory Management, Quota Planning, Incentive Compensation Management and Channel Management and ultimately leads to better management and utilization of sales resources and coverage.
By putting timely and accurate sales and incentive data in the hands of decision makers, organizations are equipped to make more informed decisions that result in an improved competitive advantage.
When I first describe sales performance management, the reaction is “How hard can it be?”
A sales manager assigns a territory to a sales representative along with a sales target quota. The sales representative sells the organizations’ products and services to prospects and customers, and at the end of the period, receives a commission payment for their selling activities and efforts.
Sounds simple enough, but SPM is much more than this. SPM solutions provide reporting and analytics outcomes to questions such as:
·Who sold what products at what price last month?
·Are the sales representatives selling activities within their territory assignments and rules?
·What are our top selling products by region or by city?
·Are commission payments in-line with expectations and within budget?
·Are the sales territories all covered effectively?
·How many sales representatives are over 70 percent of quota and now on accelerators?
·Are the sales representatives selling activities aligned to the sales strategy?
These are just some of the questions that sales management ask every day. In most organizations there is no simple, consistent and accurate way to get the answers to these questions. The ERP/CPM system has some of the information. The CRM system has some of the information. The HR/Talent Management system has some of the information. The rest of the data is in emails, spreadsheets and legacy systems.
Analysts who are charged with finding out the answers to these questions generally resort to a combination of extract files, Microsoft Access and Excel to pull the data together to provide the answers. Often the resulting report or analysis is incomplete, late, and suspect in terms of accuracy. The burden of pulling it all together makes even the simplest of requests a daunting task.
When it comes to managing, processing and reporting on territory assignments, plan eligibility, quota attainment and commissions calculations, the process looks much the same.
By implementing a SPM solution, sales data is first compiled from many disparate upstream systems. This data is then processed against business rules to provide business intelligence, commission statements, and management reports.
These reports enable analytical capabilities that measure and validate the performance of the entire sales organization and sales team. Sales leaders can manage territory definitions, territory assignments, quota allocations, quota adjustments, selling channels, and compensation costs while driving sales behavior and performance.
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