Incentive Compensation and Sales Performance Management Survey

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SPM Vendor Selection Part 2: Shortlisting SPM Vendors

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on November 10, 2008
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Now that you realize how large the proposals are going to be, it is obvious we want to invite only certain companies; having to evaluate 20 different proposals would be a good waste of time. Usually, between 3 and 5 companies are shortlisted for this process.

So how do we pick the companies to be included in this list? It depends on many criteria and on the context. The most obvious criteria are the number of payees, the complexity of the compensation plans and the requirement for an on-premise versus an on-demand solution. Many vendors also focus on a specific industry and should be considered for the list.

The next step is to look at the company’s reputation. Some of them have been in the market for a long time, and some are pretty new; some of them have many live implementations, others are still trying to find clients; some of them are profitable, others are not; some win awards and make the Garners list, others are almost unheard of. What do others say about the applications being considered? The importance of these questions should help further refine the list.

The next big question remaining is, can the applications remaining on the list meet your high-level requirements. This can be hard to answer without knowing the vendors and their solution, but some of this information can be found on the web and on my blog. This is why it’s important to know what is important to you? Assuming every solution will give accurate results, what are you looking for beyond that? User friendliness of the administration interface? Reports? Analytics? Ease of maintenance? Modeling? Do you have any other technical requirements? Is support of a specific database required?

Finally, do you need a best-of-breed application, or would you consider a “lesser known” vendor if the price was significantly cheaper, or if they had a very strong focus in your industry? Obviously some solutions are very expensive, and others are… well not as pricy, some are very focused (often in the insurance industry), while others are generic.

After considering all of this, it should be possible to bring down the list to the 3 to 5 vendors we are looking for. Avoid making the common mistake of only considering the companies rated promising or positive on the Gartner ICM Marketscope… others are likely to have very viable solutions as well.

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SPM Vendor Selection Part 6: Getting Help!

SPM Vendor Selection Process

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on November 5, 2008
in Planning and Selection
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A lot of my readers end up on LeapComp looking for information about various vendors. I presume this is because they are considering getting a sales performance management solution at some point. In the next few posts I will discuss the vendor selection process, and I will address the following topics:

  1. Creating a good Request for Proposal (RFP)
  2. Creating a shortlist of vendors to be considered
  3. Getting the most out of sales performance management vendor’s demos / Proof-Of-Concepts / Interviews
  4. Conducing reference calls
  5. Negotiation
  6. Getting help

Let’s look at the first topic; creating a good RFP.

Creating a Request for Proposal (RFP)
A Request for Proposal (RFP) is a document inviting companies, in this case SPM software vendors, to submit a proposal. The RFP includes many sections including the project definition, the project requirements (functional and technical), vendor questions, an explanation of the selection process, scoring process, etc. The quality and completeness of the proposals will only be as good as the information provided in the RFP, so it’s important to get this document right!

Before even starting to write an RFP, make sure you understand your business needs, business and technical requirements.  I wrote a scenario about the importance of getting the requirements right, which is relevant again.

Organizations often have an RFP template which they use for every RFP they send out. These templates will include common information such as a letter of invitation, instructions to bidders, a common glossary, and other forms. If you do not have such common template, you should look at various examples, and pick which sections you want. Many places on the web have “sample RFPs”.  Here is an RFP gold mine, containing all Canadian’s government issued RFPs.  They are not specific to SPM, but they can provide some good ideas.

Requirements and vendor’s questions

Formulating good requirements, and good questions for the vendors, is key to ensure the “winning solution” is the best fit for your organization.  After all, you don’t want this winner to not meet one of your “must-have” requirements which was left out of the RFP.  Secondly, what could be the best system for one company is not necessarily the best for yours.

Asking questions such as “The product must be able to calculate commissions accurately”, or “The product must be robust”, is bad.  Why?  Because this is the type of questions every vendor will answer “yes”.  Not only is it important to ask questions specific to your needs, it is important to ask questions which will distinguish vendors from each other.

Specific must-have yes-or-no questions could be “The solution must be able to support multiple calendars”, “the solution shall be hosted in a data center with a SAS 70 accreditation” or “the solution shall be able to integrate with SAP without significant configuration”, are examples of questions which may be important to you, and which not all vendors may be able to check “yes” so easily.  In general, most yes-no questions will be answered by “yes”.  That’s why RFP for packaged solutions often add other answer options such as Supported,Modifications, 3rd Party, Customization, In the future and not supported. I would also recommend leaving space for vendor’s to add comments on that spreadsheet.

When scoring the RFPs, relying on these answers will give very similar scores.  That’s why essay-type questions are often preferable, and can be a good complement to those questions.

Questions such as “Describe how your organization supports customers and resolves issues” will give a better picture of what the vendor has to offer compared to asking the question “can resolve issues in a timely manner”.  Essay questions will also make the scoring more time consuming and potentially more subjective.
When formulating questions, first think about major categories such as compensation, technical, organization, etc.  Keeping your specific needs, requirements and current challenges in mind, write questions related to each of those categories.

So you get the idea, the proposals will often be pretty large documents.  That’s why my next post will focus on short-listing SPM vendors.

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SPM Vendor Selection Part 6: Getting Help!

Merced Incentive Management (MIM) Review - Part 3

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on October 20, 2008
in Implementation, Technical Tips and Vendor / SPM Solution Review and Info
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Calculators
Calculators seem to be the feature where Merced Incentive Management is the most different compared to other solutions.  Instead of using “rules” like in Callidus TrueComp and Varicent SPM, or using “components” like ZS Associates Javelin, Merced uses calculators which consist of a multi-dimensional table, very similar to an Excel spreadsheet.  Each cell can contain any type of information including formulas referencing other cells.  Let’s look at some calculators.

Transaction Calculator
This calculator runs for every transaction that has been identified by the plan. All the transaction fields are available as inputs, and outputs are written back to the transaction itself allowing for per transaction commission and bonus to be generated.  An example of this would be an individual sale that is given a percentage commission based on the product sold.


Summary Calculator
This calculator runs once per period per payee and uses aggregated data as inputs such as Total Net Sales, Total Revenue, Total YTD Margin etc. The business rule is calculated after any transaction calculators have run and allows complete control over outputs including overwriting performance and measurement data. An example of this calculator would be a plan that measured the past 6 months average performance and paid based on that average with a cap on the maximum commission that could be earned in a year.

Table Calculator
This calculator is used to store tabular data and information.  Table calculators are reference by any of the other calculator types by their reference name.  For example the function =PRATES(C1,C2) might pass in a product name and a date to a product table and return a commission rate.


Function Calculator
This calculator is used to encapsulate complex business rules and allows administrators and users to break down large calculations into a series of functions that can be reused.

This should provide a good idea of how Merced Incentive Management handles calculations.  Here is a final example of a calculator where some logic is defined:

The next and final post will describe some of the additional features from Merced Incentive Management, including reporting, processing, the payee’s interface and ETL.

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Merced Incentive Management (MIM) Review Part 2

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on October 19, 2008
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During the demo we logged in the application as an administrator.  As you can see, the top menu gives access to major application ‘areas’, and the left menu shows information which is relevant to the active area.  When we navigated to the “payees” area, we see the “most recently used” payees, and the related areas.  Most areas also include a search tool to easily find what we are looking for.  Finally, as expected, the payees are listed, grouped by title (which Merced Incentive Management calls “roles”).


Merced Incentive Management supports multiple hierarchies, called “sales structures”.  The company hierarchy can be displayed in a graphical way, and “drilled down” as required.

This is when I noticed what I think is one of the best feature of Merced Incentive Management.  It uses a “tab” navigation system which we have grown accustomed to in our web browsers, making the navigation from screen to screen (and back) very easy and convenient.

Clicking on a payee opens another tab, displaying that payee’s information.

Some of the information can be modified by updating the values in the text boxes or drown down menus, but others require to pick a value from a list and other settings.  For example, changing a role required to specify the new roles with the effective dates for that role.  These changes make a window “pop-up” on the screen while fading the information in the background.  That was another very nice eye-candy I have not seen in other solutions.  This concept of “pop-ups” is used throughout the application.

Building a Plan

Plans in Merced Incentive Management, are not what other applications call a plan.  In every other application I have seen, a payee can only be part of ONE plan, and the plan consists of all the rules including commissions and bonuses for the payees assigned to the plan.

In Merced, a plan is an object which contains all the logic to come up with a set of results, multiple plans are assigned to each payee.  So for example, if we have 4 different bonuses for an individual, each of those bonuses is considered a plan.  The first time I talked with Merced about their application, they mentioned the application supported several thousands of plans for some clients.  I did not understand why a sane (or even an insane) client would want that many plans.  This explains it.

If it’s still not clear, I hope it will make sense after I explain how the plans perform calculations.

Back to the plan screen; the screen is divided in a few sections.  The “plan summary” section shows the plan name, the plan group, the target and the effective dates.  The plan filter section shows specifies the data source and every filter applied to that data. Finally, the bulk of the logic takes place in the “plan calculation” section, using what Merced Incentive Compensation calls “calculators”.

Each plan (as is every other object in Merced Incentive Management) is effective dated.  A full audit trail allows to audit the various object versions and revert back to a previous version if required.

My next post will focus on the ‘calculators’ which contain the logic for all calculations performed my Merced Incentive Management.

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Merced Incentive Management

Published
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on October 15, 2008
in Implementation, Industry News and Vendor / SPM Solution Review and Info
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Merced Systems is another company which is probably lesser known in the North American market for the moment compared to other product vendors.  I first wrote about Merced when they acquired an incentive compensation management software company called Practique Software.  Just like ZS Associates’ Javelin Suite, this “new” SPM vendor (with a solution called INCA) caught me by surprise because I hadn’t heard about it before.  If you also wonder why the name may not sound familiar, it’s because Practique Software’s INCA solution was mostly used everywhere, except in North America.   This is what Merced Systems is changing.

Practique has been deploying INCA in many enterprise environments in Europe for the past 12 years.  So while they are a new player in North America they are certainly not new to the ICM market.  Practique Associates is going to keep its brand name for the moment in Europe, but in North America its applications were already rebranded as Merced Incentive Management.

Merced Incentive Management is another web-based SPM solution with a very different approach than what I have seen with many other vendors.  We will see how some of its features are quite innovative.  The application is targeted towards enterprises with a large number of payees.  Merced Incentive Management is an enterprise class incentive management application with multiple deployments of more than 10,000 and up to 100,000 payees with an excess of 1 million transactions per day.  It is available both on-demand and on-premise, and it is also easy to switch between on-demand and on-premise if required.

In the next 2-3 posts I will focus on Merced Incentive Management, which is a great addition to other Merced offerings including applications facilitating organizational goals alignment, goal setting, performance reporting and coaching.

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Merced Incentive Management (MIM) Review - Part 4

ZS Associates’ Javelin Suite Additional Modules

Published
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on October 6, 2008
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Before getting side-tracked by the Come on SPM Vendors… Grow Up! post and the very active discussion that followed, I described many of the key features of ZS Associates Javelin Incentive Manager.  This post is dedicated to the several modules that are part of the Javelin suite, which complement the incentive manager.

Javelin Territory Designer
Unlike Javelin Incentive Manager, Territory Designer is a desktop application.  It does not require any special hardware, offers several neat functionalities and is used by around 100 clients in the US.  I should make the disclaimer that I haven’t seen other commercial territory management solutions, so I don’t have anything against which I can compare this application.

The main screen of Territory Designer shows a map which can be zoomed in and out, and where each territory is shown in a different color.


Territories can be selected with a simple click and drag, which displays additional information about those territories.  It is also possible to search for a territory by zip code, territory name, city, product, or any other information defined.


What I have been told by the ZS team is that this territory manager distinguishes itself from other similar tools by being able to handle complicated and multiple sales forces, complicated relationships, and by being able to optimize territories for the most fair configuration by following fully customizable rules.
Another feature which I did not expect to see in this application was how the application supports different scenarios and tracks who makes changes.

Javelin Quota Designer
This is another desktop application, but it is being redesigned for the web in 2009.    Javelin Quota Designer facilitates the design and modeling of sales quotas.  It allows seeing the impact of new goals on variable compensation, based on historical data.   “Playing” with different variables and targets allows to model “what-if” scenarios.


Many advanced analytics reports are available to provide useful information about the territories.  Some of these reports, such as the correlation report, help ensuring that territories are shared in an equitable manner.

Javelin Quota Refiner
Anyone who has been through the process of obtaining input from the field to update quotas will appreciate the usefulness of this simple tool.  Javelin Quota Refiner allows managers to review and approve quotas online.  Some conditions can be setup such as a setting parameters for how much a quota can be modified.

Javelin MBO Manager
Javelin’s MBO Manager is a simple web-based interface to create, approve and rate performance on objective-based plan components.  As expected, MBO manager allows managers to add objectives for their reports, and supports the MBO lifecycle from objective setting, to gathering approvals, to finalizing the objectives.  It also allows setting payout targets based on the percent attainment of these objectives.

Javelin Communication Manager
This tool can be used to communicate anything, from reports to plan documents, etc.  Files can be organized in a folder format and can distribute files by email, FTP or by providing a link.  Communication Manager is very flexible in how files are organized and shared.  One feature which I expected to see but didn’t find in the communication manager was the ability to get an approval for plan documents and to handle dispute resolution, but this feature is part of another module called OnTrak, which is part of 3rd party application which integrates into Javelin’s interface.

That’s everything I have to say about the Javelin Suite for now!  Overall, a great product which I am very happy to have had the opportunity to see in action.  I will keep my eyes opened for any updates related to Javelin Suite and I’ll make sure to discuss them here.

To find out more about ZS Associates and Javelin Suite (of course you can visit their website), but you can also attend their anonymous demo on October 23.  Many other vendors are also presenting on different dates as listed in the banner at the top of this page.

Stay tuned, my next SPM vendor review will be for Merced Incentive Management solution (MIM), which as I discussed before purchased Practique Associates last summer.

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ZS Associates… Who are those strangers?