Five Reasons Why SPM Projects Fail

Five Reasons Why SPM Projects Fail

Sales performance management (SPM) systems hold great promise. But they can also be complex – and sometimes they fail. After nearly 15 years of experience implementing SPM software, we’ve come to recognize the key reasons why some projects just don’t work.

Before you start your SPM initiative, you should take a look at the reasons why some projects either fail or don’t get off the ground, and then take appropriate steps to get yourself on the success list.

We detail the what and why of these points of failure in our ebook, The Top Five Reasons Sales Performance Management Projects Fail. One of the five reasons SPM projects can fail is a lack of executive leadership.

Like any mission-critical and/or enterprise project, an SPM initiative must involve the participation and cooperation of numerous business units, including sales, finance, human resources, legal, IT (sometimes) and more. Unfortunately, with so many players involved, the possibility of participants losing interest, key players changing roles or companies, and priorities changing, can drastically increase. More so, if there is a lack of executive sponsorship or oversight, the change of the project failing increases again.

We’ve identified four other common reasons why SPM projects can fail. Understanding these will help you avoid these common pitfalls, and, hopefully, save you money in the long term. Learn what the other four reasons are.

Resource Guide: Top 5 Sales Performance Management (SPM) Vendors

Resource Guide: Top 5 Sales Performance Management (SPM) Vendors

Every year the team at Spectrum issues a resource guide for organizations researching sales performance management vendors. We’ve just released the Top 5 SPM Vendors – Updated for 2020. 

The market for SPM software is crowded, with more than a dozen vendors competing fiercely. For those considering new SPM software, the process of evaluating every one of these vendors can become overwhelming. And there is no single vendor who stands out as an obvious winner.

Our report is intended to give you a jump start on your search for the SPM software vendor who most closely fits your needs. This year’s report includes Optymyze, Oracle, SAP, Varicent and Xactly.

Here’s a sneak peek of two popular vendors, SAP/CallidusCloud and Varicent:

Resource Guide: Top 5 Sales Performance Management (SPM) Vendors

Top 5 SPM Vendors

In addition to providing a snapshot on each vendor, the report also covers:

  • Key customers, by industry, for each vendor
  • SPM market share insights
  • Recent developments

Download your copy of the Top 5 SPM Vendors – Updated for 2020 today!

From SAP/CallidusCloud to Spectrum: Q&A with Abhijit Sant

From SAP/CallidusCloud to Spectrum: Q&A with Abhijit Sant

Abhijit Sant recently joined Spectrum as senior vice president of our SAP Practice. Prior to joining Spectrum, he spent 20 years at CallidusCloud, now SAP, where he worked directly with CallidusCloud customers and help build a world-class professional services organization. We asked Abhijit a few questions about his move to Spectrum.

Q: You could have easily remained with SAP. Why join Spectrum?

A: Spectrum’s customer-first approach to building sales performance management and incentive compensation solutions for its clients is in-line with SAP’s philosophy. While I was evaluating potential opportunities, I knew I wanted to work with a partner specializing in Callidus products. I also wanted one who shares SAP’s philosophy and the commitment to customer success I had throughout my career at Callidus. Spectrum presents me with the perfect opportunity to help SAP customers get the most value out of SAP Sales Cloud suite.

Q: What’s new in the Sales Performance Management (SPM) market?

A: Organizations – regardless of size – no longer need just a commissions solution that does accurate calculations. They are looking for solutions that provide information and insight on how to influence the behavior of sales reps. They also want to understand how the buying process can be expedited and how the outcomes can be changed. It’s no longer about calculations, it’s about optimization and finding opportunities.

Q: What’s your plan for expanding Spectrum’s SAP practice?

A: We’re an SAP Silver Partner. For the next few months, we’re going to continue our focus on the Callidus products. We have customer successes and experience there. As we get into the second half of the year – which will be here before we know it – we’re going to offer consulting and implementation services for SAP Sales Cloud, SAP Customer Data Cloud and Qualtrics.

Q: According to the 2020 Gartner Magic Quadrant for Sales Performance Management, SAP “customer references mentioned issues with some partner-led deployments, saying they needed to bring SAP resources in.” What are your thoughts on this?

A: When Callidus was a standalone company, the majority of the implementations were done by Callidus Professional Services. Hence, the majority of the knowledge and expertise resided with their professional services. As you know, I worked for Callidus for 20 years doing North America implementations, so I have a deep understanding of the customer base. At SAP, there is an emphasis on partner-led implementations. This means there’s a transition – as customers and prospects look at the existing partners to implement SAP solutions, they do not necessarily have the in-depth knowledge they might claim to have. It created a huge gap in the knowledge/expertise the partners did on the implementations in 2019.

Spectrum, with our customer-first implementation approach, combined with a unique agile implementation methodology designed specifically for SAP Commissions implementations in mid-to-large enterprises, is filling that gap for SAP Sales Cloud customers and prospects. My focus is to ensure customer implementations are successful. We’re not in the “churn and burn” business.

Q: How else does Spectrum differ from other sales performance management consulting firms?

A: Unlike some of the consulting firms that offer SPM services, we are entirely focused on SPM and CPM. We bring industry-specific, in-depth knowledge to our implementations. When you combine our focus, knowledge and methodology, that results in faster implementations and quicker ROI for our clients.

We also make sure our clients get the most value out of the solutions – we care about a lot more than just calculating commissions! Our team brings insights into customer’s compensation landscape that makes compensation plans more effective.

Contemplating SPM Automation Tools? Is Your Organization Ready For The Road Ahead?

Sales Performance Management (SPM) involves multiple business processes, and hence, the procurement and implementation of an SPM Tool (such as Callidus, IBM, Xactly) requires a significant amount of planning and effort.

The planning must start long before you schedule vendors demos. There is no point in conducting vendor demos if your organization is not yet prepared to travel the road towards SPM automation. So how do you go about evaluating your preparedness?

To determine your organization’s readiness for an SPM tool, here are the top 10 questions you should answer:

1. What is the Business Justification?

The answer could be Cost Savings, Enhanced Reporting, Operational Efficiencies, Auditability, Calculating Payments or something related. Whatever it may be, if you can’t come up with a couple of strong business justifications, you will find it difficult to make a business case for the tool. Although it doesn’t all have to be about the financials, you have to be ready with a worksheet that shows the numbers. To learn how to build a business case, here is a link to a webinar that could be very helpful to you: http://bit.ly/2pvd1Ts.

2. Are the Executives on board?

Have you discussed your plans with your executives? Do they understand the high level budgetary needs for such a project? Do you have their verbal nod for a ballpark budget?

If your executives aren’t okay with the estimated budgets, maybe you have gotten ahead of yourself. Save yourself some time and initiate the vendor demos only after you see your executives warming up to the idea.

3. Are Compensation Plans Stable?

The most common reason for SPM implementation failure is that the compensation plans are in a state of flux, sometimes even changing while the implementation is in progress. Are your organization’s comp plans still going through significant changes because of evolving market landscapes?  If so, you will have a tough time keeping your SPM implementation on track.

Taking this into consideration, you are not ready for an SPM tool. And yes, when you are told that the tool can handle all future changes without any time or effort, take it with a grain of salt.

4. Do you have enough Time?

From vendor demos to go-live, SPM projects will take no less than 4-5 months. If you are too close to the beginning of the new Plan Year and the deadline for Pay file is already in sight, you have probably missed your window of opportunity. If you decide to move forward at this point, you will be scrambling to move fast, thereby compromising the quality of your decisions, and creating a huge risk to the project overall. You are better off planning a mid-year rollout, which will have its own challenges, but at least you have time to plan for it.

 5. Are Business Processes Mature?

When the organization is growing rapidly, HR and Finance are constantly tweaking the organizational framework. For this reason, or maybe due to a recent M&A, if the processes and policies in the organization have not yet been solidified, it is difficult for the implementation team to configure the new tool.  A lot of time and effort would go to waste in changing the tool configuration again and again.

For example, if the new hire draw policy is changing every few months, the SPM tool can’t really be successful.

6. Do you have IT Systems providing Reliable Data?

SPM tools can’t operate in a vacuum. If you don’t have HR systems providing reliable Payee data or ERP systems providing sales data, you will have huge challenges with the SPM tool. Garbage in, garbage out. For instance, if new hire notices are coming to the commission administrator on Post Its, you are not ready for an SPM tool. You must first invest in HR tools and processes.

7. Is IT Leadership ready for one more Tool?

SPM implementation projects require IT budget and resources. If the IT team has resource constraints, or there is another large IT initiative, such as an ERP upgrade planned for the year, then IT will not be very happy about supporting an SPM implementation. A quick synch up with your IT leadership would help ensure that no such major roadblocks exist.

8. Is the Cloud an option?

Almost all major SPM tools are now available only as SaaS solutions, where the software is hosted in the vendor’s Cloud. What that means is, if your organization has a strong preference for On-Premise solutions, your choice of vendors becomes very limited.

It’s better to clarify with your business leaders if Cloud solutions are an acceptable option. If not, knowing the road map for all software vendors, you may want to abort the idea of packaged solutions or wait for your organization’s mindset to change.

9. Do you have Resources to support this Project?

After the tool is implemented, you may be able to cut the headcount in commission operations. But initially, you will have to dedicate a great deal of time and energy in evaluating and implementing the tool. If you are unable to free up any of your current resources and can’t find the budget to hire external consultants, it will be extremely challenging for you to get this to the finish line.

10. Is there an M&A on the Horizon?

Last but not least, if there is an M&A on the horizon, it’s better to wait on an implementation project. The new company may already have an SPM tool, and it is almost guaranteed that your business team will want a single SPM tool catering to the joint salesforce.

If you need further assistance with getting you prepared for an SPM project, please contact us at mktg@spectrumtek.com.

How To Measure The Success of Your SPM Implementation

During an RFP process, I was in a customer reference call and a question came up – Did you have a successful implementation? They gave their answer but it got me thinking – what exactly defines the success of an SPM implementation? Of course the straightforward answer is within-budget and on-time delivery. But what are some of the other metrics besides the obvious?

SPM projects are intended to deliver much more than just $ savings. Therefore the conventional ROI calculation doesn’t work here. Some of the non financial parameters to consider :

  • Time/Effort in Comp Administration- Has the system enabled you to normalize headcount or working hours?
  • Sales Incentive Plan Document distribution – Are those being routed on time?
  • Agility in making Comp Plan changes – Are you able to make quick changes to comp plans, or do you still have to push back?
  • Commission Forecasting Accuracy – Are the actual and forecasted numbers comparable?
  • Fiscal Year Beginning Draws – How long are the payees on draws before actual commission is paid?
  • Volume of Disputes – Is the team now able to catch issues before they become disputes. How quickly are discrepancies resolved?
  • Meeting Payroll deadlines – Is it a comfortable run to the finish line, or is it still a mad rush?
  • IT Support Head Count – Has it reduced? How much value is the support team adding?
  • Reporting – Do sales folks actually understand and use the reports? Do the reports provide necessary insight to higher Sales Management?

If your answers to all or any of the above is positive, then you have a winner!