Ten Reasons Why Customers Pick SAP Commissions

Ten Reasons Why Customers Pick SAP Commissions

Working for Callidus (now SAP) for 20+ years implementing SAP Commissions, I had a front row seat to see how the product matured and why customers choose SAP Commissions for managing Sales Performance Management (SPM). Whether your organization has 50 people on variable pay or 100,000+, SAP Commissions has proven itself to be a one-stop shop for every customer. Whether you are a high tech business, med-devices manufacturer, an insurance /banking service provider or a retail organization, SAP Commission’s robust functionality works well for all industries.

I have seen customers moving from Excel or home-grown legacy tools to SAP Commissions. I have also seen customers migrating to SAP Commissions because they had outgrown their current SPM vendors. If you look at the Gartner Magic Quadrant for SPM over the past five years, one constant they cite is the robust functionality of SAP Commissions. The core architecture perfected over 20 years has allowed customers to scale up the software as their businesses grew.

Granted, the last two years have required customers adjusting first to SAP’s ecosystem, and then to HANA. They also had to deal with implementation partners who may not have in-depth product expertise. I was happy to hear that SAP is focusing on SAP Commissions and is investing heavily in ensuring customer success.

Below are ten reasons why I believe businesses are choosing SAP Commissions:

  1. Complexity – SAP Commissions state-of-the-art architecture designed 20 years ago and is updated to scale. It has been the backbone that has handled complex calculations and millions of transactions. There is no other tool that can handle complex calculation, as well as allocate transactions to multiple people based on complex criteria, as done by SAP Commissions. SAP Commissions’ formulas, multi-dimension lookup tables, territories, legal rule editors are the best in the market.
  2. Scalability – SAP Commissions is a one-sized tool that fits for all customers, whether they have 50 people on variable pay or 100,000+.  Many current enterprise customers started their SAP Commissions journey when they were small startups. As they have grown, they have never had to think about switching their SPM tool.
  3. Performance – SAP Commissions can handle millions of transactions for their customers. The last time performance metrics were published, their average calculation runtime was less than 30 minutes. For smaller payee/transaction customers, this means a calculation runtime of minutes.
  4. Auditing – SAP Commissions provides extensive auditing functionality allowing customers to be SOX compliant. Audit logs can be easily extracted and reported on.
  5. User Interface – SAP Commissions’ new UI is easy to use. Its task-based functionality using the Walk Me feature makes it much more intuitive. Navigation is seamless and response to the queries is fast. Research Views allows customers to trace from transactions all the way to payments.
  6. Effective Dating – SAP Commissions’ pervasive effective dating functionality is across all its objects, allowing users to make changes at the granular level. This ensures accurate calculations without any workarounds.
  7. Integration – SAP Commissions leverages SAP’s Cloud Platform Integration and Smart Data Integration tools to connect to other applications like SAP ERP, Successfactor, Salesforce.com, NetSuite, Workday, and ADP to bring the data into SAP Commissions and push the data back. Spectrum was the first partner to use CPI for integration with SAP Commissions and had first-hand experience with SAP CPI.
  8. Dashboard – SAP Commissions’ dashboard and widgets are rule-based and easy to configure. They can be updated in minutes and do not require IT involvement. Given that dashboards are dependent on rule configuration, it is recommended that they are designed sooner and not left till the end.
  9. Workflow – SAP Commissions provide out-of-the-box easy to use Communicator workflow, which allows configuration of plan distribution and dispute management. For customers having complex workflow requirements, SAP Commissions come with Enterprise Workflow applications.
  10. Analytics – SAP Commissions comes with a built-in SAP Analytics Cloud license for users to access pre-built analytics reports via Performance Optimizer. Customers can purchase enterprise SAP Analytics Cloud license to build additional analytical reports and dashboards.

The SPM market is crowded, with the various options seemingly quite similar. SAP Commissions is a great solution for many companies. If you are evaluating SAP Commissions, feel free to reach out to me . I’d love to have a conversation about how it best fits your needs and your best steps for getting started.

Read more from Abhijit and about SAP Commissions:

How to Implement Commission Capitalization Using SAP Commissions

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

Spectrum Technologies Welcomes Abhijit Sant as Senior Vice President of SAP Practice

Beyond Commissions Basics: How to Implement Commission Capitalization (ASC340-40) using SAP Commissions

Beyond Commissions Basics: How to Implement Commission Capitalization (ASC340-40) using SAP Commissions

As a result of ASC606, there is a continuous need from Commission Accounting to capitalize commissions. Businesses are in dire need to automate the manual process of capitalizing commissions in order to comply with ASC606. As long as the function can be narrowed down to commission capitalization and not revenue recognition, SAP Commission’s built-in rule writing functionality can solve this problem by allowing companies to spread the commission payment over the contract term. Spectrum has leveraged that functionality and has built a commissions capitalization solution for our customers without requiring them to purchase additional software.

What is ASC 606 and ASC340-40

ASC 606 focuses on the transfer of control rather than the satisfaction of obligations prescribed by ASC 605. The underlying principle is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that they expect to be entitled to in the exchange for goods and services provided. A five step process has been designed for individual or pools of contracts to keep financial statement preparers focused on this principle. The steps include:

  1. Identify the contract(s) with a customer
  2. Identify the performance obligations in the contract(s)
  3. Determine the transaction price
  4. Allocate the transaction price to the performance obligations in the contract(s)
  5. Recognize revenue when or as the entity satisfies a performance obligation

ASC 606 requires more comprehensive and detailed disclosures than what is currently required under ASC 605.  ASC340-40 deals with Commission Capitalization.

Implementing ASC340-40 using SAP Commissions

Commissions customers for whom ASC340-40 rules apply, need to spread commissions capitalization over the contract term. Contracts could be a one year or ten  year contract. Each company has different rules with respect to how to spread the commissions over the contract period. Spectrum has built functionality using the SAP Commissions application allowing customers to define commission capitalization rules down to the contract or customer level. In addition, we have developed easy to follow out-of-the box reporting and the ability to integrate with the ERP systems to enter journal entries.

  • Defining Commission Capitalization rules / criteria — Spectrum is using SAP Commission’s features including state-of-the-art rule writing to define the commission capitalization criteria. SAP Commission’s calculation/ pipeline process takes these rules into account and calculates how to distribute commissions over the contract term.
  • Reporting – Spectrum has built out-of-the-box reports to show commission capitalization over the contract term at the lowest granularity required. These reports can be configured to meet customer requirements. For SAP Analytics customers, Spectrum has created analytical reports that show slicing of these information.
  • Integration – Spectrum can integrate with your preferred ERP to send journal entries automating using SAP Cloud Platform Integration (for HANA customers) or Connect Enterprise (for Oracle customers).

If you are interested in learning more about Spectrum’s commission capitalization functionality for SAP Commissions, feel free to contact me.

This post is part of series by Abhijit Sant on 21st Century Commission Calculations – taking your SAP Commissions implementations beyond the basics.

About Abhijit Sant:

Abhijit Sant is the Senior Vice President at Spectrum Technologies leading SAP Practice. Before, joining Spectrum, Abhijit worked for SAP / CallidusCloud for 20 years in many roles including North America Implementation and Business Development Vice President.