April 10, 2012

A new Key to Success for Sales Performance Management

I had the opportunity to present at a Sales Performance Management seminar in London, England a couple of weeks ago.   I was joined by Kevin Pilcher from Colt, who shared his thoughts and opinions on the topic of 'Keys to Success'.  I shared the list of Keys to Success that I have been gathering from SPM project sponsors over the past couple of years.  In general he agreed with their guidance and recommendations, but he also added one of his own.   (many of these are listed under the Keys to Success tab on this blog)

Kevin suggested that in order for an organization to really take ownership of an SPM implementation they need to get involved in the configuration and implementation of the project right from the outset.  He is a big advocate of training right at the outset of the project.   His view is that every organization has unique plans and processes and that their team should be intimately involved in all aspects of the implementation.  Kevin took his team and put them on training classes right at the outset of the project.  They knew the plans at a very detailed level and with the appropriate solution training they added a lot of value immediately. This combination of detailed plan knowledge married with product knowledge were a great asset during the system configuration portion of the implementation.   

There was an added benefit, in that after the configuration, the Colt team was able to be self-sufficient right from the outset, versus having to take on a big learning curve after the system was up and running.

In general  we see projects where the both the vendor and the customer are actively involved provides these benefits:
  1.  shortens implementation/configuration times
  2.  compensation teams are aware of advanced features and functions in the solution by working side-by-side with vendors experts
  3. allows the organization adopting SPM to be much more self-sufficient and the application is much more likely to be business user owned.

March 22, 2012

Followup on Keys to Success Post

Ritu Thakur
I previously mentioned that I have been fortunate in that I have had the opportunity to work with a number of very knowledgeable people in the SPM space.  Ritu Thakur is one of those people.   (Follow this link to see her profile -  http://www.linkedin.com/in/rituathakur). She has worked on several SPM implementations in high-tech and large financial institutions.  We had an email exchange after my last Keys to Success post  (see the Keys to Success tab)

She agreed with the idea of ensuring the the incentive compensation team is trained and put on the project early, but she talked about another huge benefit that I wanted to pass on.

In addition to all the benefits that you have listed, I wanted to add one additional benefit of your new Key to Success. While the implementers have a lot of best practice experience, they are not as close to the intricacies of the client data and processes.  Despite the synergies across industries and function, there are always unique and specific requirements that can make or break a project.  Hence, having the client participate in the implementation brings those key details to the implementation effort.  It allows for an effective implementation, helps avoid gaps in design and reworking the project.

This makes a lot of sense, and just one more reason to ensure that your team has representation from the people who run the compensation process and know how it works at a very detailed basis.

February 6, 2012

Observations from CFO Enterprises CPM conference

I had the opportunity to present at CFO Enterprises annual Corporate Performance Management (CPM) conference in New York last week.  Robert Kaplan opened the conference with an update on The Balanced Scorecard and Activity Based Costing.  He used some great examples of companies like Volkswagen to illustrate how organizations are mobilizing the entire company towards executing a few key strategies utilizing the Balanced Scorecard.   David Axson, of Accenture (formerly a partner at the benchmark research firm – The Hackett Group),  opened the second day with a great session on our need to recognize that the speed and impact of world politics, business events and even weather have an increasingly stronger direct influence on this year’s financial plan.   Organizations must be more nimble in their planning, forecasting and budgeting processes in order to survive.

Most of the speakers talked to the finance audience about alignment, strategy and execution.  Each and every presentation I attended mentioned increasing revenue and increasing forecast accuracy – from both a revenue and cost perspective.  The challenge I observed however is that many of the follow-on conversations led back to the traditional topics of how to improve budgeting, consolidation and forecasting.   This has been the traditional view of CPM over the years.   I believe that while this is important and necessary, it’s missing a key element - sales force alignment.   It’s hard to find an organization that doesn’t have strategies that involve penetrating new markets, selling more to customers, launching new products, yet there was precious little conversation about how to align and motivate sales teams in order to execute these strategies.  

Based on the feedback that I received at my session and the follow-on conversations I had with attendees, it appears that I hit a nerve. When CFOs think about strategy and organizational alignment their perspective on what sales should be doing is quite often at odds with what the heads of Sales believe.  One example of this disconnect is that most sales organizations are striving to introduce incentive plan simplicity.  Many CSOs believe their sales compensation plans are too complex, too confusing, too rigid, and are looking for ways to simplifying them in order to drive the desired behavior from their sellers.  Many of the leading compensation plan consultants argue that a good sales incentive plan should have no more than three components.  

Yet when CFO Research Services surveyed CFOS about the same topic, CFOs responded the most important thing that Sales could do to ensure reaching its goals is to Encourage Sophisticated Sales Behavior.   They want to drive up-sell, multi-year deals and other high-margin offerings.  The goal is to drive bottom-line improvements and overall customer retention.   Increasing sophistication is at odds with increasing plan simplicity.

Both the Sales and Finance leadership are motivated to improve sales but their views of the solution lead to conflicting tactics.  This is just one area of the discord.   Sales Self-Service, the right role for business analysis,  how best to set sales targets,  technology to support sales management are just a few of the topics that Sales and Finance need to agree on in order to work together to drive organizational alignment and driving increased high-margin business.

When considering how to execute strategy and improve organizational alignments CFOs and CSOs need to make sure that they are aligned first.

If you would like copies of some of the research I reference here just let me know and I will forward it to you. 

January 17, 2012

Explaining Gartner MarketScopes

In Varicent's  recent press release we noted that we received a “Positive” rating in Gartner Inc.’s Insurance Incentive Compensation Management (ICM) MarketScope Report.  We are thrilled with the news, but in conversations found that many people we talked to were confused between a Gartner MarketScope and a Magic Quadrant.  

The team at Varicent went to work and wrote a blogpost explaining what's behind a Marketscope and how to use it.   They did a great job of providing some background for those of you unfamiliar with the topic.  Here's the link: http://bit.ly/yJFhSp