September 20 by Sarah Van Caster

As more organizations look to transition to more efficient options for managing sales compensation, Apttus is right on trend this fall with its Intelligent Incentive Compensation Management (ICM) solution. The company formally introduced Apttus ICM to the marketplace with a press release on August 24th.

Apttus, the leader in Quote-to-Cash, is the first to offer an integrated Quote-to-Cash and Incentive Compensation Management (ICM) solution. It is designed to help companies create, execute and manage sales incentive programs throughout the Quote-to-Cash process. As CEO, Kirk Krappe explained in the press release, “Through the years, we have learned that the best way to drive business outcomes is not only to automate the process, but also to motivate individual behaviors throughout business practices. By having incentive-based applications wrapped around Quote-to-Cash solutions, organizations can align user behavior to business outcomes.”

 

The need for better incentive compensation solutions is something we have seen in the marketplace for quite some time. Traditionally, incentives are managed across countless spreadsheets and/or multiple, disconnected systems. This strategy often fails to provide enough capabilities for businesses to effectively manage incentive programs. The woes of managing sales compensation programs via spreadsheets and legacy systems are familiar to many of us – lack of visibility, version control problems, auditability concerns, manual errors, scalability challenges, and more. As organizations expand and evolve, managing complex compensation programs becomes more difficult to handle through traditional efforts. Many companies are turning to better alternatives: software-as-a-service ICM solutions that are specifically designed to manage sales incentives.

Automated Solutions Drive Results

There are many benefits of transitioning to automated ICM solutions. These include:

Enterprises will miss the equivalent of 5-10% of annual sales as lost opportunities which could have been captured by improving sales performance management.

According to Gartner the primary reason most organizations invest in incentive solutions is to gain operational efficiencies. While this is certainly a benefit of an automated solution, the value of incentive compensation solutions goes beyond saving time and reducing administrative costs. The right ICM solution empowers sales organizations by giving them access to their current performance and estimates on potential earnings, and by helping them focus on the customers and deals with the highest revenue potential and the most promise to close. By making salespeople more motivated and more efficient, you will see not only administrative cost savings, but revenue-driving results as well. (Source: MarketScope for Sales Incentive Compensation Management. Michael Dunne. March 5, 2010.)

70% of companies using automated solutions report that their plans generally drive the precise selling behavior they desire.

For most companies, sales compensation is one of the top annual expenses. Spend on sales incentives each year, on average, is estimated to be approximately 11% of annual revenues. When that money is not spent efficiently, its consequences can have major financial implications. By improving the effectiveness of sales compensation programs, you can better align selling behaviors that ultimately lead to better business outcomes. (Source: Insights, 2010 Sales Compensation and Performance Report.)

Top-performing companies are 32% more likely to integrate automated real-time compensation and quota data into their system.

Sales leaders and compensation managers have their work cut-out for them in our fast-paced, data-driven world. To provide the most value and to enable the sales organization to be as efficient as possible, the management of sales compensation needs to be nimble, dynamic and proactive. Typically, sales incentives calculations require consolidating data from a variety of sources (enterprise resource planning solutions (ERP), customer relationship management software (CRM), configure price quote tools (CPQ), Quote-to-Cash systems, etc.). If these systems are all isolated from the incentive compensation management process, likely manual intervention, errors and processing delays will occur. Automated solutions can streamline these processes, saving time and increasing payment accuracy. (Source: Better Tools, Better Process, Better Performance: Best-in-Class SPM Deployments Mirrored by Xactly Customers.” Aberdeen Group. May 2013.)

Sales incentive compensation management software can reduce errors by more than 90%.

No one is going to let you know when he/she is mistakenly overpaid, but most everyone will raise a dispute when underpaid. Compensation managers often spend significant time evaluating, arbitrating, and recalculating/processing payment disputes. With less errors and backtracking, they could spend their time on more value-add, strategic activities that provide more benefit to the business. Additionally, when salespeople do not trust the integrity of their data, they also spend precious hours shadow accounting, recalculating their commissions and trying to verify their earnings. This wastes significant time that could be spent focused on more direct selling activities. (Source: Gartner Customer 360 Summit, Using Sales Performance Management to Significantly Increase Revenue. Patrick Stakenas. May 2013.)

Additionally, incentive programs are often scrutinized by federal regulations, government compliance and auditing requirements, and even industry-specific regulations that make using spreadsheets risky business. Spreadsheet-driven processes can be flexible and easy, but they often leave companies at risk for corrupt or inaccurate data. Compliance with regulations like Sarbanes Oxley (SOX), EuroSox (8th Company Law Directive), and other regulations require audit trails and financial transparency. Even new accounting regulations like ASC 606/IFRS 15 will impact entire end-to-end business processes, including sales compensation, making timing more critical than ever to ensure your sales compensation processes are streamlined and compliant.

The Bottom Line

If you are using spreadsheets to manage sales compensation, your processes are likely not as efficient as they could be, your incentives may be too costly, your organization is potentially at risk, and you are likely at a disadvantage from your competitors who have adopted a more effective solution. The time is right to consider an ICM solution designed to facilitate the management and execution of all your incentive programs to drive selling behaviors and directly impact revenue.

Learn more about the benefits of an Incentive Compensation Management solution. Download our Ultimate Guide to Sales Incentives today!

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