Sales Performance Management Steps Out of CRM’s Shadow
Updated · Sep 04, 2012
Customer relationship management (CRM) software has changed how businesses engage with consumers by driving efficiency and helping them identify new revenue-generating opportunities. When it comes to sales organizations, attention is increasingly turning toward CRM’s cousin, sales performance management (SPM).
Typically lumped into the broader customer relationship management (CRM) category of software, SPM has taken on a new prominence thanks to a recent high-profile acquisition and new market insights from Gartner.
In April, IBM acquired a leading SPM specialist called Varicent to bring automated sales data analysis and reporting technology to Big Blue’s Smarter Analytics portfolio. And earlier this summer, Gartner released its Hype Cycle for CRM Sales report, identifying cloud-based SPM as a hot new technology that is poised to enter the enterprise software mainstream within the next two years.
Which all begs the question, what is sales performance management (SPM)?
Sales Performance Management Explained
As the term’s name implies, sales performance management solutions aid businesses in aligning their sales activities with business objectives. Generally, SPM employs data analysis and automation software to manage sales quotas, territories, incentive compensation (commissions and bonuses), job evaluation and sales coaching and forecasting.
While it may sound similar to sales force automation (SFA) and there is some overlap, particularly in the job evaluation and sales forecasting capabilities of both types of software, SPM differs in fundamental ways. While SFA focuses primarily on account tracking and automating sales tasks like order processing and tracking, inventory monitoring and customer management, SPM attempts to provide a more cohesive take on all sales activities.
Of all of SPM’s benefits, sales managers and account executives are bound to agree that the software’s ability to streamline incentive compensation plans is a big one. With an sales performance management platform in place, sales organizations can record commissions and bonuses accurately and pay them on time. No more Excel sheets with custom formulas and shadowy accounting.
SPM Vendors to Watch
Recently, Ventana Research published its Sales Performance Management Value Index for 2012, which ranked the top companies in the SPM space. According to Ventana CEO Mark A. Smith, multiple releases of Fusion CRM for Sales has pushed Oracle into a tie with Salesforce.com. Both companies are rated “hot” and carry a 91.2 percent score.
In a blog post, Smith notes that the gap between the cloud software pioneer and its rivals is narrowing fast. “Salesforce.com has its work cut out to keep pace and maintain its leadership position in the face of fierce competition from the other vendors listed here,” he writes
SAP follows closely with a 90.1 percent score, while Xactly and Microsoft round out the top five with 89.6 percent and 89.1 percent scores, respectively. Varicent, now an IBM property, earned an 88.2 percent rating.
SPM vendors that ranked high did so because of their ability to quickly respond to market changes. Smith states the index “examines the emerging needs for mobility, collaboration and analytics,” some of the biggest trends affecting the enterprise social market at large.