Data Quality for SPM Operations
SPM operation, especially the Incentive Compensation part of it, is all about handling data. Poor data quality can significantly
drive up the operational costs and cause the sales team to lose faith in the calculations. Good data is essential to producing correct pay calculations and reports, allowing sales team to focus on delivering sales, rather than dealing with discrepancies.
But, having good clean data is not enough. SPM operations are time sensitive, and the data across various underlying systems is every changing. Hence proper data synchronization (across business and IT systems) is important as well. Different Reporting Cycles, Payroll Cutoffs, and Period specific Adjustments can’t be handled accurately, until data is clean, and well synchronized.
The following check list will help guide the decisions to deliver consistent and accurate data to the SPM system:
1. Choose the data source carefully
Companies that have a single source for revenue and customer sales data are more likely to have good data quality, thus generating the most accurate reports. Data quality suffers when companies have multiple production systems and data repositories that are managed by multiple teams. If these systems and repositories are not in sync because of different adjustment and reconciliation processes, the data quality will be poor. To insure integrity of the SMP reports, these companies must design requirements that sync up the various data sources and utilize the same data that is used for all other company reports.
2. Consider full data loads vs. incremental transactions
Based on the cost and time it takes to process sales transactions, the most common transaction loads are incremental. Because companies make periodic payments to Sales, the SPM data must be date-stamped and stored. This insures that future transactions do not alter or compromise the historical values previously used for pay calculations. Many core business systems provide the infrastructure to load incremental data without compromising the historical data. Companies with known data issues however, may resort to full YTD data loads prior to the close of each pay period. Still others still, design compensation calculations that factor the YTD data changes into the current pay period.
Companies should decide on the type of data load best suited for them, based on factors impacting their sales crediting policies such as, type of business, number of transactions, and volume of revenue adjustments.
3.Determine the impact of adjustment transaction
Adjusting sales results involves different types of transactions, including contract revisions, cancellations, discounts, claims, and pricing revisions. Three important principles should be followed to ensure good SPM data quality:
- SPM data should be loaded in sync with adjustments posted in the core systems and those posted to management reporting systems
- Do not attempt duplicate postings of core data adjustments directly into the SPM data loads. This could be a costly move.
- Create a separate category for “SPM Only” Pay For Performance adjustments (small volume critical pay adjustments) that can be posted within a specific pay period for correcting payouts. By year end all final adjustments will be posted to the core systems and these SPM adjustments will show a net of zero.
4. Reconcile with core systems before running compensation calculations
Even the best designed data acquisition and validation processes need to be reconciled with the core system before pay calculations are executed. This is easily done by reconciling the SPM data loads with core system results during the period-ending data load process. Make sure that the revenue and other key metric values are reconciled to the same reporting periods, so that SPM calculations are in sync with other business systems.
5. Provide an easy way to create reports and data files for sales and support teams
Add customized reports and data extracting options, specifically designed as inquiry tools, to the SPM system. This will enable Sales Support and others to easily create reports whenever needed.
6. Retain “locked” multiyear data available for SPM analytics
The ‘locking’ functionality in many SPM systems allows access to detailed, multiyear performance data and provides a major advantage when producing sales team compensation analytics, internal pay plan performance trends, and business performance metrics.
In summary, the first priority in the development of a SPM Pay and Performance reporting process is to design requirements that will produce superior data quality. This includes dictating that the SPM data is in sync with your company’s sales results reporting and business metrics. Poor data quality will lead to a lack of confidence in the SPM system and Operations team, creating unease and discontent among your Sales team.
Managing sales compensation programs takes planning; focus and a daily drive towards the organizations sales performance management objectives. To discuss this further feel free to email us at firstname.lastname@example.org.
About the Author: George O’Connell has on premise and SaaS expertise in the area of Sales Performance Management (SPM) and Incentive Compensation Management (ICM). His experience includes design, development, operations, governance, and analytics for a company with $2.5 billion in sales to over 500,000 customers. He’s managed SPM operations for a wide range of sales channels including telephone sales, sales executive channels, union contracts, new business start-ups, call centers, third party vendors, sales management plans, and director / sales VP compensation.