LeapComp - Sales Performance Management Blog

I’m back from my blogging “vacation” and I apologize to all my readers for this long delay. I’ve been extremely busy juggling projects and I started an MBA a few months ago which has been using most of my free time. I will do my best to do a better job at fitting blogging in my schedule.

For this first new post, I’d like to talk about Merced Systems. I covered Merced’s incentive solution (then called Merced Incentive Management or MIM) about two years ago, soon after it acquired Practique Associates. At that time, the big question was, is Merced going to be successful at integrating the incentive compensation tool to the rest of its products, and will it be able to compete against well established vendors such as Callidus and Varicent in the competitive US market.  Gaining credibility from clients, selling enterprise solutions and going live with them is a long cycle, and finally, after two years, some conclusion can be drawn.

The Company…
First, I’d like to talk about the company itself. Even with the recession, Merced Systems has managed to grow and post profits for 7 consecutive years. I’m pointing this out because in a world where most other SPM companies are relying on investments to develop solutions and gain market share, Merced has actually been making money – and reinvesting it into R&D to improve their product.  It now counts over 225 employees concentrated in its Silicon Valley and London offices, responsible for more than 125 customers deployed in over 20 countries. Merced’s big challenge at the moment is to hire enough smart people to sustain its rapid growth.

The Challenges…
One of the first challenges Merced needed to overcome to be successful in the US market was to develop the ability to implement and support its ICM solution in the United States as well. Now with over two years of ICM experience under its belt, this is no longer a concern.

The other hurdle that Merced needed to overcome was to attract large clients in the United States to show that it could be successful here as well. One of its first projects in the US was Nationwide. The goal was to help agents gain more visibility into their performance, to increase payment accuracy and to reduce calculation time. Merced ICM successfully managed to accomplish these goals, and the phase one of the project was completed in early 2010. Many customers in the United States are finally live or are currently being implemented; these customers include Bank of America, Otsuka and Dell. When I spoke with Mark Selcow, Merced System’s president, he pointed out that not only was Merced successful at gaining traction in the US market, but that it was also keeping its momentum in the European market. Merced recently announced the successful deployment of the ICM Suite at Kia Motors.

The Solution…
Now about the solution itself; as a reminder, in a nutshell, Merced ICM calculates compensation and incentives, and provides meaningful reports and dashboards. Since Merced acquired Practique, Selcow noted that Merced System’s engineers have been working very hard at integrating the incentive solution to the other tools of the Merced Suite comprising Merced Planning (for territory planning, quota planning and goal setting), Merced Intelligence (for sales and compensation analytics) and to the Merced Performance Suite (used for performance scorecards, ranking, and coaching). Selcow believes that scorecarding for seller self-correction and coaching to drive best sales behaviors are emerging trends in Sales Performance Management, and will become an important part of ICM/SPM solutions.

In my opinion, one of the biggest improvements recently brought to the incentive compensation suite is the Workflow Manager module. Workflow Manager allows users to setup various workflow that can range from dispute resolution and payment approval, to requiring approval to submit a manual adjustment, MBOs, or to make any changes to a plan component.

Two years ago I also showed screenshots of some standard reports and dashboards available with this solution. I had a hard time choosing a good adjective to describe them, but the first word that came to mind was “outdated”. Again, thanks to Merced’s competent engineering team, Merced ICM received a face lift with the Merced Analytics suite. Leveraging MicroStrategy Business Intelligence, Merced ICM delivers stunning reports and dashboards.

Significant improvements were also brought to the functionality and features of the application. Some of Merced’s innovations are based on their aggressive roadmap to become the number one sales solution provider (with Merced ICM being a significant part of that objective). However, Selcow also noted that Merced is a very agile company and that many innovations are a result of customer requests.

In Conclusion…
Another aspect that makes Merced different from its competitors is the ability for a client to choose to deploy it on-premise or on-demand and to have the ability to easily switch from one to the other if needs evolve.  With Callidus trying to be a completely recurring revenue business, or Varicent which is mostly on-premise, having the ability to choose between both delivery models can be a huge advantage.

But according to Mark Selcow, even with great technical solutions, what REALLY makes Merced Systems and Merced ICM different from the competition is its relentless focus on its customer’s success during and after an implementation. “We don’t see ourselves as a solution provider” he told me, “we become a true partner”.