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It’s hard to break some news about your own company without sounding maybe a bit opportunistic, and not completely ‘independent’. However, I thought it was still worth mentioning that OpenSymmetry - which is one of the major consulting company in the SPM space - is adding to its arsenal of services and departing from being primarily focused on system integration.
OpenSymmetry has been offering strategy services for a while - mostly activities leading to an implementation. Some of these services included evaluating the compensation system’s current state, helping out developing a business case, documenting requirements, writing RFPs, performing readiness assessments, evaluating proposals, etc. A few months ago they also created a small ‘Business Transformation’ unit responsible for everything process related (process optimization, process reengineering, process reviews, change management, etc). This seems like a reasonable offering considering that most compensation problems arise from process issues more than technology issues! Coincidentally, my next challenge at OpenSymmetry is to lead and grow this new strategy business unit (anyone needs any help?).
What is really a departure from OpenSymmetry’s system integration focused model however, is the introduction of Sales Compensation Design Services. OpenSymmetry is no longer only focused on system integration and related strategic services - it now offers services for the entire SPM spectrum from plan design to system delivery to support and managed services. Some of the new compensation design services include:
- Business priority clarification and compensation philosophy
- Sales role definition
- Program eligibility
- Compensation levels and base salary/incentive mix
- Performance measures, weights and mechanics
- Crediting and support programs
- Modeling and costing
- Plan documentation and communication
As we are quickly approaching this time of the year where major changes are required for the 2010 compensation plans, OpenSymmetry is organizing a free webinar discussing current trends and findings from our research on compensation management practices, as well as sharing lessons learned and examples of how leading companies have been dealing with the current economic climate. The webinar will be held on September 22, 2009 at 1:00 pm Central Daylight Time. If you can’t make it, we will record the event and I will be pleased to provide the link to the recording. I will also post the key recommendations on this blog.
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What is Monaco?
Bingo!
But Monaco is also the name of Callidus’ latest on-demand offering. The only problem is that they haven’t done a very good job at advertising it – which is one of the reasons why I’m receiving many questions on this topic.
The press release about Monaco came out a few months ago but faded quickly. It describes Callidus Monaco as:
A robust, SaaS offering that delivers the most modern-looking and rich user interface experience available in the sales performance management marketplace today. The Callidus Monaco Suite is the only unified SPM software solution that provides complete alignment of the entire business with corporate objectives to optimize performance, streamline profitability and deliver a rapid ROI.
…Yet another “only unified SPM software solution”. That press release also mentions that the solution is a multi-tenant SPM offering which streamlines:
• Objective Management
• Quota Management
• Reporting and Analytics
• Compensation Calculation
• Embedded Workflow
• Plan Distribution
After reading this, I was wondering if Callidus Monaco was only a rebranding of the Callidus On-Demand SPM, a new solution that would be replacing it eventually, another offering that would be available in parallel, the same solution but ‘multi-tenant’…?
What I found out is that Monaco is a combination of many existing on-demand offerings, focused on SMBs. For example, the Objective Management and Quota Management features are offered through TrueMBO and TrueQuota which I reviewed here. TrueMBO and TrueQuota can be purchased as standalone applications, but they are also unified with the core ‘Monaco’ product which is similar to TrueComp with a Web 2.0 facelift and more basic templates available out of the box.
Callidus Monaco will be offered in parallel to Callidus SPM On-Demand. Callidus On-Demand will be limited to customers in specific industries such as Insurance. All other customers wanting to use an On-Demand solution from Callidus will be offered Monaco.
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Charles Burleigh, a fellow Sales Performance Compensation consultant, data integration expert and blogger, wrote an interesting post about consulting rates.
In his post, Burleigh asks an interesting question: should a senior consultant drop his rate in order to remain engaged on a project? He notes that recent Callidus TrueComp positions being advertised only fetch around $40-$50; less than half the “acceptable” rate. He attributes this drop to less experienced consultants willing to take on these roles at lower rates, and to clients that may have unrealistic expectations.
I think there are several forces at play creating this situation:
Consulting rates are influenced by supply and demand. Right now, there is a lot of supply (many consultants looking for a job) and not much demand (projects are delayed or even canceled).
Sales Performance Management Vendors also try to compete more aggressively and seem more willing to negotiate their professional services rates.
SPM Vendors are also more focused on the benefits of recurring revenues from their ‘on-demand’ offerings than on the comparatively low impact on-time professional services fees.
With the recession, companies are on a tight budget. They probably realize that there is a risk that trying to find an inexpensive consultant might result in finding an inexperienced consultant, but sometimes there are just no other options.
Companies might also realize that there are many very experienced resources looking for a contract, and that they might be able to find such a consultant with a low-ball offer.
I don’t have data to confirm this, but I think that this is a trend for the entire IT professional services industry
Should senior consultants accept lower paying contracts? There may not be other options. Keeping your skill set up to date and getting more relevant experience during the market downturn (even at lower rates) could make a difference in getting a more lucrative contract once the market recovers.
This being said, companies should be very careful to choose consultants or consulting companies with the the right experience, and not settle with a junior consultant only to save a few bucks. After all, you often get what you pay for. But keeping this in mind, for the reasons I have outlined above, now might be a good time to kick off an SPM project and obtain ‘better-than-usual’ rates.
In the meantime, an industry-wide consulting rate drop might be just what is required to generate more demand, to help the sales performance management industry to prosper, and in turn cause the consulting rates to climb back.
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EasyCommission is a new on-demand application for small companies. The press release claims that it is very flexible and easy to use.
But as we discussed before, flexibility often comes at the expense of complexity. In this first release of the application, many features were kept out, presumable to make the application easier to use. For example, it does not support quota based commissions, draws/caps, and splits between more than 2 payees. It also does not provide any e-mail capability.
Maybe we’ll have a review coming up… But for now, if you are curious to see what the application looks like, there are plenty of screen captures here.
What I find very interesting about EasyCommission is the pricing model; I haven’t seen this in any other SaaS solution.
There is a free edition that sets a limit of 1 administrator and 4 reps. This free version limits “advanced functionality” and there is no support. The economy edition has a limit of 19 reps. Again, functionality is limited and support is on a “per incident basis”. Finally, the regular version unlocks all the features, and full support is included. What I find very interesting, is that with the free and economy editions, users will be shown advertising within the application.
CellarStone also offers a more robust solution called QCommission which can support up to 10,000 payees according to their website.
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Steve Cakebread, New Chief Financial and Administrative Offer at Xactly
Xactly announced minutes ago that Steve Cakebread has joined Xactly as CFO. Steve was the president and chief strategy officer at Salesforce.com for the past 6 years, and helped grow the company from $22 million in annual revenue in 2002, to $749 million in 2008.
We heard last week that Steve had left Salesforce.com. He now joins a company in a market where all vendors will collectively earn about half of the Salesforce.com revenues. That’s a good indication that others also believe the Sales Performance Management market has tremendous growth opportunities!
What makes Steve Cakebread a particularly interesting fit for this position is that he led salesforce.com through its initial public offering in 2004… Could this be one of the reason Xactly recruited him?
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That was the title of an article released yesterday by Callidus software. Every time I hear about the potential savings resulting from a successful sales performance management implementation or about a measurable return on investment (ROI), my interest is piqued immediately. I’ve talked about ROI here, here, here and here.
This latest article asserts that telecommunication companies in the EMEA region (Europe, Middle East and Africa) are missing out on GBP2.15 Billion (3.11 Billion US Dollars). That’s a lot of money!
Callidus analysts came up with this number by looking at what the average carrier spends on sales cost (10% of the revenues). Since the average revenue of EMEA telcos is GBP432.73 billion, they each spend an average of approximately 43 billion is spent on sales. The article also says that an SPM solution can improve efficiency by 5% of the compensation spent. So 5% of 43 billion = GBP2.15 billion of potential savings.
But here is the problem. According to the article, 43 billion is spent on sales; not on compensation. And Callidus expects an improvement by 5% of the compensation spent; not on sales. So either the statistics are mislabeled and we are not comparing apples to apples, or I am confused.
Assuming that I’m confused or that Callidus really meant that 43 billion is spent on incentive compensation, and assuming that a 5% improvement is a lot, we can see that even a “small” 0.5% improvement of the compensation spent, still represents GBP215 million ($310M USD) savings!
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