It’s the time of the year where everyone makes their predictions for 2009. With all the economic turmoil of 2008, 2009 should be an interesting year for sales performance management.
Last year I mentioned that I believed 2008 would see a surge in demand for the on-demand market. Checked! We’ve seen many companies entering this space with new on-demand solutions and many vendors shifting their focus from an on-premise to an on-demand strategy.
Now I have a few thoughts about where I think the market will be heading in 2009…
1) On-Demand still going strong – Some people believe the on-demand wave will slow down. I don’t think this will apply much to Sales Performance Management. With many budget cuts/freezes, enterprises across the world are more reluctant to make any large IT investments before they can see a positive move in the economy. Since I believe the economy will take several months before it recovers, I think these companies will be more likely to have a closer look at on-demand solutions.
2) Hybrid SPM Solutions – This may take a while before it comes… With the SPM vendors (as every other company) concerned about surviving/striving in a tough economy, R&D budgets may suffer. But at some point, I’m sure we’ll see many SaaS solutions which can be accessed off-line. In other words, the SPM solution, sitting on someone’s laptop, could be synchronized with the on-demand server and then used without an internet connection. I’m also hoping that configuration could happen while being “offline”.
3) More Customer Focus – With an increasing number of excellent SPM solutions available, one of the key factors in getting new customers and retaining old ones will be customer focus.
4) Death (and birth) of Acronyms – Incentive compensation is a booming niche market and it should be no surprise that new lingo and new acronyms are “invented daily”. Some of the terminology will stick, some of it will become less popular and die. For example, I believe that ICM (Incentive Compensation Management) and EIM (Enterprise Incentive Management) will slowly disappear and be replaced by SPM (Sales Performance Management) – even if they are not the same thing. On-premise and On-demand might stick and replace more technical lingo like SaaS (Software-as-a-Service). Others may never catch on (like trying to replace “on-demand” by “the cloud”).
5) Revamp of compensation plans – Many companies will choose to revisit their old compensation plans and either tweak them or re-design them. I think that vendors and consulting companies will have more implementation revenues from existing solutions compared to previous years.
6) Surge of boutique consulting firms – Two points here; with many people being “let go” from SPM vendors, I’m sure many will decide to try starting their own company or become independent consultants. Also, with companies becoming more cost conscious, they will consider boutique firms as implementation partners, instead of only considering large IT shops (Accenture, Deloitte, etc).
7) Importance of the balance sheets – Companies choosing a new SPM solution or an implementation partner will pay even more attention to the companies’ balance sheets. The technology will still be important, so will the experience, but a deal breaker will be the financial viability of the vendor/partner being considered.
8) Open Source Solutions – This could be a stretch, but with many people with the right skill set finding themselves without a job, we may be seeing some open-source SPM solutions emerging.
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