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I have wondered for a while what Sales Performance Management (SPM) means. From a systems perspective, that journey took shape as commissions tools, things that did calculations back in the 90s. This morphed into what we have today. But I want to look at the timeline – what we have today and why it became that way.

We started with simple calculations: getting information in, calculating it and putting that information out. It was called ICM, Incentive Commission Management or enterprise management. In those days, things like transaction management and editing were things you wanted. Most systems used a month copy basis, like financial systems, and you really had no way to do things inside a calendar. Often you have the option to take corrective action by coding against the framework of these systems but at a great cost. This is why many of these systems still stand today, as the cost of them was unwieldy. What you got out of this era was math, some form screens, but little more. 

Things moved progressively as people clamored for things like reporting, territory management, and a way to move information in an intelligent manner to other platforms. Enter things like ETL programs that were provided as OEM to the applications, along with concepts of date effectivity of objects. This is a lot of words to say they finally figured out how to let you make mid-month changes. Reports got better, some had neat graphics, but they still lacked the appeal as they often were two-dimensional. In the end, math was still key, but being able to see it was important too. You still had to do a fair amount of data cleansing, and ETL programs were where most of this activity happened. So there was still a heavy lift and a lot of business logic lived in the ETL programs. They still weren’t calling it SPM, but it was getting closer.

Now we are where things start making their transition. Customers wanted to move forward and moneyball was well known. Analytics and dashboards are key, along with workflow to communicate out to the sales force. Things like embedding apps in CRMs are done so that there is a one-stop location for people to consume their sales information along with reports on commission. There is a desire for what-if type of analysis and projections, though this was still poo r and rudimentary. What we did advance to was the true combination of the platform to provide a holistic view of the entire system of SPM, from transactions coming in, being reviewed and allowing us to visualize what happened.

And now to today, where we have moved into an area where true what-if analysis can be done with projections. As the advent of machine learning takes on the inbound information, you can leverage it to clean data, model data and understand impacts in a multi-faceted way. People can utilize this information to make changes to quota on the fly, and provide details to finance and leadership to determine if the plans are accomplishing what they need to or should a change be made on the fly.

So what is SPM today? It is the convergence of data into a mathematical calculation system that provides output based on carefully designed plans by finance, HR and leadership. This drives the behavior of the sales organization and provides clear and accurate details about their performance and allows for coaching and corporate goal alignment. Through the combination of true BI, territory & quota management, workflow, scenario modeling, calculations (although most still can’t do real time), SPM allows for coaching and clarity, and allows management to utilize outliers to make quick decisions.

What isn’t SPM then, you say? It isn’t a CRM – it doesn’t represent itself as a source of truth for sales data – nor should it be. It isn’t an AI tool, although it can consume information from such tools, but none of the current applications imbed machine learning into their systems (nor could most people get anything meaningful out of this yet – we’re simply not ready). It isn’t some random application that applies to sales, but doesn’t apply to commission planning and application. It also isn’t SharePoint, nor is it some outbound marketing lead gen application. It is the attempt to put all these types of applications and more into those ecosystems that causes people to lose focus on what is important to them; successfully executing sales strategy via incentive programs that align to corporate strategy giving visibility to all parties interested.

The reason all of this is important is that when you, the customer, the end user of these systems, goes to implement your own SPM environment, you need to have a clear goal in mind and a true understanding of what can really be accomplished. Start with what should be important to you, then look at what system does that best. The differences are there, but they often can be subtle. Once you have done that, do an inventory of your current applications. This is important as they may well become part of your SPM system. Many people choose to host up reports inside of Salesforce, specifically after they bought the BI tool, Tableau. Maybe this is how you want to host up reports and you need to account for this, and that you should focus on other important factors when picking a tool. Speed and accuracy should be key, and allowance of business rule logic to be maintained inside the application structure.

So what is Sales Performance Management? It is what you, the user, defines it to be – but be careful in overreach, as one is almost always going to end up unhappy.