Archive for September, 2008
Off premise solutions lower EIM / SPM entry bar
Tuesday, September 23rd, 2008 | Project Direction, SaaS | No Comments
When the early niche EIM / SPM solutions were being introduced over ten years ago, the low end of the target market began with companies having about 100 sales representatives. These solutions, with their sizable implementation schedules and server hardware and software requirements, were just not economically feasible for companies with smaller numbers of sales personnel; Excel or Access based custom solutions were the standard alternative. Some customers did better than others with these solutions – there are some pretty amazing Excel spreadsheet based systems out there. Often though, the sustainability of such solutions relied on an Excel guru and growth bred havoc leaving the typical SMB in a difficult place.
Software vendors recognized they were neglecting the SMB market and have taken steps to address this with off premise solution options. All of the niche solution providers including Callidus, Centive, Synygy, and Varicent are offering such solution options. Additionally there are pure-play providers including Xactly and nGenera which only offer off premise EIM solutions.
What is an off premise solution? Rather than paying licensing fees to run the software on its own hardware, the customer pays a subscription (usually based on the number of payees for EIM software) to use software running under the vendors control. Savings can be realized in this arrangement through the more optimal use of the following resources:
- • support personnel
• DB software
• application server software
• hardware
The solution vendor whose core business is EIM should be able to achieve levels of efficiency much higher than that of companies trying to support their own solution in addition to managing their core business.
The various vendors have different delivery architectures for these off premise solutions. Some merely implement instances of their software on servers and databases very much like a customer might do with an on premise solution; this arrangement is often described as a hosted solution. Others share more resources amongst their customers including databases, servers, and even instances of the software; as more resources are shared, the solutions are more often described as software as a service (SaaS) (think SalesForce.com, QuickArrow, etc.) . SaaS purists draw a distinction between the way the solutions are delivered; some even refuse to describe a hosted solution as SaaS. Wikipedia quotes Microsoft’s classification of SaaS maturity levels. Each of these ascending levels of maturity allows for greater levels of resource sharing, efficiency, and maintenance cost savings. Theoretically, a vendor offering a solution based on an architecture with a higher maturity level can do so at a lower cost than those with a less mature architecture. Generally, at a tradeoff of higher maintenance cost, a solution that leans towards hosted rather than highly mature SaaS can offer greater customization. Some vendors offering solutions more towards the hosted end of the spectrum promote this as a benefit claiming that sharing fewer resources amongst customers (especially database resources) allows a level of data security that true SaaS providers sacrifice.
If you have fewer than 100 sales representatives and you thought EIM software was beyond your budget, it may be time to reconsider. An off premise solution may lower up front and maintenance costs making serious EIM realistic.
Clarification: Centive offers only a SaaS solution, Centive Compel, after divesting its on premise product known as CompCentral in September 2006. Thanks to Bob Conlin, Centive Chief Marketing Officer, for fact checking. In addition to emphasizing his company’s SaaS focus, Mr. Conlin pointed out that Compel “was the first true multi-tenant solution to come to market – launching in May of 2005.” -AC, 9/24/2008
Similar Posts:
- SaaS Pricing for Callidus On-Premise Solution - MichaelStus
- EIM / SPM system upgrade: port or reengineer - MichaelStus
Sales compensation program change considerations
Thursday, September 18th, 2008 | Compensation Plans, Project Direction | No Comments
3rd quarter is traditionally the time that sales compensation program changes are finalizing for the approaching year. Three key things that your compensation plan design team should keep in mind while going through the process: 1) stick to your design principals, 2) keep it simple, and 3) know how the plans’ performance will be monitored when the changes take effect.
Certain design principals typically drive a compensation plan design. These principals may include guidelines for:
• the correct base pay to target incentive pay mix for each sales job
• distribution of actual sales performance above and below target
• how much incentive upside top performers should be allowed
Whatever your design principals may be, make sure your changes are compatible with them. If the principals themselves are evolving, insure this is intended rather than an adverse side effect of another change.
Effective compensation plans are easy to understand so that they drive behavior without distracting the sales force. If there are a several ways formulaically to implement a compensation component, opt for the simplest approach; make sure you can justify why if you diverge from simple to something more complex.
How the performance of you compensation plans will be monitored is an important consideration when going through the change process. Most companies use analytical reports to assess the performance of their sales compensation program. Examples of analytics reports that may be used for performance monitoring include:
• achievement versus target per performance measure (aggregation and distribution) – are any measures being neglected or over emphasized?
• base and incentive pay versus sales volume (aggregation and distribution) – Is greater sales volume properly being rewarded with additional pay?
• sales personnel turnover by role and distribution of turnover occurrences versus sales performance - What is the retention rate of sales personnel in each role? Are your top performers leaving at a higher percentage than your lower level performers?
Consideration of compensation plan changes should include an evaluation of the monitoring process. Make sure you have answers for the following. 1) Will the existing analytics reports suffice functionally for post change plan monitoring? 2) Will any additional reports be required? 3) Will existing reports require modification to continue to function properly?
Modification of sales compensation plans can be an enterprise affecting process. Stick to your principals, keep it simple, and know how you’re going to keep an eye on the effects of your changes.
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Diligence in your day to day
Thursday, September 4th, 2008 | Project Direction | No Comments
I just finished reading a great book called Better: A Surgeon’s Notes on Performance
• hand washing by hospital personnel – huge reductions in ever more prevalent and virulent infections such as staph
• systematic childhood vaccinations – near eradication of polio in impoverished countries where sometimes there is just one doctor for each 25,000 residents
• medical record keeping in Iraq – an increase to 90% survival rate of soldiers wounded in battle in Iraq from a 75% level that has consistently been the ceiling in every conflict since the Korean War.
These results triggered me to think about how diligence could be put to work in my line of work, software system project delivery. Your initial reaction to my jump to this thought could be that I’m being callous or insensitive to the gravity of the work discussed in Gawande’s book. This was my first reaction as well; every day the extraordinary people discussed in Better are saving the lives of numerous children, hospital patients, and battle wounded soldiers. However, no matter how considerably less critical, IT work is still important. The projects we work on insure people get paid accurately and on time. Additionally, successful software project implementations help the health of companies and their ability to deliver product and provide a livelihood for employees. We’re not all saving lives but what we do is important!
So, what accepted IT project methods known today, given an extra bit of diligence, could pay us back with an inordinate amount of additional project success? Three that immediately come to mind:
• requirements documentation – It’s very well known that clear system requirements foster project success. The incidence of incomplete requirement sets that require rework or risky design and development assumptions could greatly be reduced with diligence – identifying and addressing all possible business scenarios is often the key.
• unit testing – Developers often find themselves struggling just to finish coding prior to aggressive deadlines. Diligence is definitely required by these developers and their leadership to insure unit testing occurs correctly prior to calling development complete.
• design and code reviews – Design and code reviews allow the better utilization of less experienced project resources and increase the probability of a solid system solution. Often though project personnel succumb to time crunches canceling reviews or conducting them without proper preparation or follow up.
Maybe you’re not eradicating infectious disease or saving wartime injured, but don’t undersell the importance of your work. If your day to day work is worth doing, it’s probably worth additional diligence. I’m betting the positive effects will surprise you. Try it and see!
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EIM / SPM system upgrade: port or reengineer
Wednesday, September 3rd, 2008 | Project Direction | No Comments
Many of the software companies in the enterprise incentive management (EIM) / sales performance management (SPM) space have several major releases of their flagship software behind them and their support for older versions may be waning. The latest version of your EIM software is offering tempting new features. Additionally, your organization may be retiring versions of supplementary software like database, ETL, and reporting tools required by the current version of your EIM software. Whatever the reason, if you’ve been running your EIM system for over 2 years, you are probably planning for an upgrade.
Questions that you may be asking: Should we stay with the same vendor? Will we stick with an on-premise solution or move to a hosted or SaaS arrangement? What is our budget and timeline? Depending on where you are in the process, another very important question may drive the answers to these and/or cause you to affirm answers you already have. Functionally, will you be 1) porting the system or 2) reengineering your current solution? A port generally refers to redeploying current system functionality on the new version or platform. A reengineer includes significant functional modifications to the current system. As with many two-option scenarios, a hybrid approach is a viable third option. For example, you may which to preserve one comp plan via a port and reengineer the others.
Some possible considerations when determining your best approach, port, reengineer, or a hybrid of the two:
• Budget – A port upgrade solution will typically be the least expensive option; costs will increase as the solution involves more reengineering. Budget for requirements gathering and analysis stages will be minimized in ports because the functionality of the existing system can serve as the requirements for the upgraded system. The testing phase for ports is also likely to be much less expensive because expected results are easy to determine and parallel tests are conductible.
• Timeline – Much like budget, ports offer advantages over reengineering towards a goal of minimizing time to go-live.
• Vendor change – If you are opting to change vendors, you may not realize the degree of cost and time savings associated with the port option due to fundamental differences in vendor product function. Careful consideration is required when planning a software vendor change coupled with a port strategy due to budget and timeline drivers.
• Compensation plan satisfaction – Are your compensation plans driving proper sales organization behavior or are they tailored to (limitations of) the existing system? Is the sales organization accepting of the function of the existing compensation plans? If no is the answer to either of these questions, than a greater degree of reengineering is probably in order. On the other hand, if functionally the plans are performing and accepted, a port may offer minimal disruption to the sales organization.
There are likely other important factors specific to your organization that will drive to your best upgrade approach, port or reengineer. A weighted matrix with scores for each driver similar to those often employed for vendor product selections can be a very useful tool to guide you to the correct course. Once this approach is identified and properly communicated to the implementation team, your chances for realizing upgrade success increase dramatically.
Similar Posts:
- EIM Solutions Resist Commoditization with Supplementary Features - MichaelStus
- Off premise solutions lower EIM / SPM entry bar - MichaelStus