Everything You Need to Know About Automating Incentive Compensation ft. Rob Blohm

So as people are joining. See that some people are joining. I'll just talk to you a little bit about sales Globe I think most of you know, but we are a problem solving firm, a data driven, creative problem solving firm for sales. And that means to solve the biggest challenges that organizations have with sales. And that would lead us to why we have these roundtables and really why we're talking about sales performance today.

So you know, as we look at all these indicators, changes, right. And what we've been saying, Michelle, for a long time is we don't know what the answer is, but we certainly know what a lot of the indicators are. We've been talking about the fear and financials being drivers of how we're going and how we're, how we're working as sales organizations. And from that we started to come up with 25 predictions for what we think is going to be happening in 2021 around sales organizations. And we're going to be focusing in on number 23 today, which is about technology investment and the fact that that's increase and we're going to give particularly to SPM sales performance management. And one of the things we've been hearing a lot, the conversations we've been having with companies, Michelle, and in the research that this is becoming not just a calculation tool but it's a critical gation tool. So since we're not all together in offices anymore and sitting in person anymore, people are getting information and they're communicating through CRM and through M more and more frequently. And survey a few months back that had about 300 companies in it and they said that the importance of communicating through those technologies is becoming even. So we're going to be about spm, which I think is really exciting because even though it's been around a few years, it's an emerging and growing area which I think is going to be going to be really beneficial to organizations.

That's exactly right, Mark. So we part of that survey why one of our predictions, we've been talking to companies across the globe about this in 20. But also, you know, there are things like, oh gosh, there was a Fortune survey that came out and over 80% of the Fortune 500 CEOs said that technology transformations are becoming the priority as they look into 2021. And we believe a lot of that has to do with providing visibility and making, you know, visibility to the front line for salespeople as well as management. So with that I would love to use our. Some of you may know Rob Blum, he is a good friend of ours and colleague in this. He's got, well, 20 years of experience in sales performance management and he's. He's currently the. The CRO of Open City. Rob, welcome today to our roundtable and thank you much for sharing your toss.

Yeah, absolutely. Glad to be here, Michelle. Thanks. Mark, can you hear me okay? Just want to make sure we can hear you.

Great. Yep.

You look good.

You look a little green screen, by the way. But you know, Rob, why don't you tell everybody just a little bit about yourself, you know, Open Symmetry as a company and then you end in your role.

Yeah, no, happy to. So I've actually been in the space a little over 20 years now. I started with a company I think everybody's familiar with, the Alexander Group. I was part of their first launch of a technology implementation team. And so believe it or not, these last 20 years have been focused on helping companies automate their sales compensation solutions. Started as a project manager, wore a lot of different consulting hats, and currently oversee our sales, marketing and alliances efforts here at Open Symmetry as one of the senior partners, I guess for the background Open Symmetry, if you're not familiar with the organization, we've been in, in place, I don't know, a little over 15 years, and we focus almost exclusively on helping clients select and implement automated automation solutions for sales compensation or sales performance management. And so, yeah, I mean, it's just sort of everything you could think of when it comes to taking sales compensation plans and putting them in these. One of these solutions and then helping the client understand how to get. Get the most out of that application. So, yeah, I guess that's the Reader's Digest.

All right, great. Now, without putting you on the spot, but, you know, you're familiar with my personality. I'm, I'm kind of going, I would love for you to share with people just something about yourself, Rob, that maybe they wouldn't. Wouldn't know about. Just fun fact.

Okay. Yeah. I guess one random fact about me is I actually got into boxing five years ago. I'm 50 years old, so I actually got into boxing at 45, which is sort of odd given, you know, much slower, much more out of shape. It's been a blast. And believe it or not, I've had a couple of amateur fights. So it's, it was, it's been kind of a kick. So there you go. It's just total random, no pun intended.

With the kick thing. So let me ask you something. Did you win?

Yeah, yeah, I won both.

You win? You won both yeah. Okay. So when we go to Chicago at Spotlight, I wanted me when we're walking.

Down the street, any amateur fights break out, I need to make sure rock.

Side sanctioned amateur fights. Yeah, that'd be good.

I did make sure I talked about you being a colleague and a friend. Right. So anyway. Great. Now let's just talk a little bit about you discussing this. I think it's really interesting that the evolution of Salesforce management. So without getting into all of the nitty gritty, you know, detail, just, just like a high level snapshot of like the evolution of it. And then I'd love with, you know, why you, you've heard our position as to why we believe that companies are going to be really focusing on it as they get into 2021. Just kind of what your perspective is around that as well.

Yeah, you know, it's definitely evolved right. Over the last 20, 20 odd years from let's create a calculator that can automate your sales compensation design to now we have so much more of a broader conversation around spm. Right. I mean it went from those early days of hey, we just want to automate and give you some comp statement and maybe build some data integration to get all this thing, connect, all this stuff connected. Now it's hey, how do we do territory and quota planning? How do we bring that into the. How do we use benchmarks? There's a lot of conversation about predictive analytics and using artificial intelligence, machine learning. I mean, all these buzzwords are getting pulled into the SPM conversation. And I would probably offer that it's good, right? I mean, it's good to see the space evolve, right. It's starting to take on more of a mature feeling, a more mature vibe. But I think at its core, clients are still very, very interested in making sure that they can get these comp plans into this system and get good reports out of it. And I think without just understanding what it takes to get that done, all that other stuff is vaporware until you get the kind of the core capabilities locked in. And I probably see we still see implementations get launched without covering some of the basics. And so I think we'll get into it a little bit in the survey data. But I mean it is representative that a lot of aren't totally satisfied with all that other stuff. But you know, they're still focused on the core thing. So I don't know, it's a bit of a back and forth with myself and some of the other executives at the vendors as to what clients are ultimately Needing and wanting. There's two differences, right, between want and need.

Yes.

But anyway, so I could probably prattle on a while on that, but yeah, I would probably say, I would say that, yeah, it's evolving, but there's still a huge emphasis in just getting the table stakes correct.

Okay, so we'll jump right into that. You reminded me of a story, so I'm going to draw a parallel story. We're doing consulting with larger communications platforms just like Zoom. Right. So they had telephone communications, they had meeting room Communicate, the collaboration software space. And they were constantly bringing out new errors and function kit. But their core function, which was really just the audio piece, not even the video, it had so many problems. You remember that, Mark? So we would be on calls with like global leaders and all of a sudden, you know, we'd be talking and all of a sudden you would hear, right? You'd hear all this noise and interns and you know, we call up it, let's find out what's going on. Right. But they were so focused on bringing out new things. They weren't really focused on making sure that their core product performed exactly as their clients really wanted it to be. So. Great point that you're making there.

Oh, yeah, no, absolutely. I've got a great example. I was just going to say one of the top vendors is absolutely shooting for the moon. And I talked to one of their clients the other day and they had an outage for four days. You know, this is a cloud based solution, right. And it's like, yeah, what are we doing?

So where do you focus? Make sure that. So something for the something. I guess that I would believe that you're thinking, as you look at implementation, doing the assessment work is who's really focused on that core. So I guess with that, Rob, I kind of turn this over to you a little bit. Gonna talk to us about some of the findings you have around, some of the big players that are out there today.

Yeah, no, happy to, happy to. So why don't I. You tell me if you can see the screen, is it coming across?

Looks great.

Yeah, perfect. Okay. All right. So I think for today's conversation, the hope was to maybe share, if you will, some survey content. Right. We did a survey with Sales Management association last year where we asked a lot of clients what they thought of their vendors. Right. So we, we focus on a handful of vendors. And the idea I think for today is to bring that information, you know, drive a little bit of conversation right around, you know, what are table stakes? What are the what are the things that are doing well? What are the things they're not doing well? And then, you know, as the conversation evolves, I can actually share with you pricing, you know, some of the pricing from some of the vendor selections we've helped clients run and things like that. But I hopefully, you know, we'll, we'll get some provocative content on the screen and you guys can ask questions and hopefully there's some questions come in. But anyway, that's the idea. Yeah, that's the idea. So why don't I just frame this out real quickly? So the survey was done last year, as I said. Sales Management association ran it and we focused on the practitioners, right, Asking people who manage sales compensation today what they think of their vendor. And so the idea was, hey, you made this purchase. What do you think of this vendor as it relates to maybe these 20 different things? And what we ended up doing is focusing on, let me see if I get the slide to populate these five vendors. So, and I would offer that obviously there's more vendors. I think there's probably 15 different SPM vendors out there in the market. But we had a little bit of a slow, smaller sample size. And so we really just focused on these five where we thought we had some statistically relevant data or at least content that would be interesting to look at. Right. It's not hundreds of participants, but we still thought it was of interest. So even though there's a ton, I.

Think that's statistically relevant.

Yeah, sorry, yeah, no, no. Even though there's tons of vendors, this is the five we're going to, we're going to talk about. So with that said, you know, I don't know if everybody's familiar with the five that I put on the screen. So I thought, you know, Michelle, Mark, we could take a minute just to walk through these, these five specifically. And then I can, I can pause and if you guys have questions or if questions come in, we can definitely maybe answer them. But the idea was to focus on the five I put up and just starting off with Oracle. So Oracle's been a long time, I mean, absolutely had a commissions application in place, and over the years it has evolved and it's actually gotten really good. I mean, we typically only see it deployed when you're implementing Oracle CX or Oracle Financials. But, you know, through vendor selections and getting and having a practice on this application, I would argue it's a decent solution on its own. Right. The next application that we got survey content on was Optimize. Now Optimize has been around for a long time as well. A lot of people may know them as Synergy back in the day. It's run by a CEO gentleman named Mark Stifler. And I'll be honest, in the last 18 months, we've seen a lot of weird stuff come out of client conversations that are on the Optymyze platform. We've heard rumors that they're leaving the space, they're only going to work on sales operations. And we've seen a lot of challenges between the clients and Optymyze as a company. So we did gather data on it. But I would offer that I'm not sure where that application is going to be in the future. Another application that we wanted to kind of, or that we collected data on is SAP. Now, SAP, if everybody's familiar, used to be Callidus, right? So SAP bought Callidus a year and a half or two years ago. And it's a great application, has always been in the magic quadrant on the far right. I think it actually led the, LED the pack for a number of years. So it's got a great, they've got a great tool, right. And it's got a lot of capabilities. It's more of a set architecture. So not that you can't do anything you want, but it has a defined architecture that you would operate in. And then my screen cuts it off. But they recently inside SAP transitioned the SAP commissions out of CX and into their success Factor group. So their HR technology stack. So it'll be interesting to see how that plays out, given most of the time sales compensation is owned by finance or operations or sales ops. So we'll see, see how that sort of plays out for them. The next one is Verisent. So verisend came out on the market a long time ago out of Toronto. They got bought by IBM and then they came back onto their own feet at the beginning of 2020. It's a great tool. It's considered a very flexible and a highly, highly adaptable application. Right. And so that's great in some respects, but it can also get clients in a little bit of trouble. And I say that because it is flexible. You can, for the most part, hang yourself if you don't know what you're doing. So my guidance, anybody going through an implementation on Verisant is pay attention to best practices, understand what you're building and build for the future so that it can adapt with you. That would be probably the only thing I'd offer on Verisint, but They are doing a great job coming back into the market and Mark Altshuler I think has got a lot of momentum at their company to get that product going. The last solution that we gather data on is Xactly. Now I would offer that Xactly really made their mark 15, 16 years ago coming out and being the first cloud based solution. So they took a page out of SFDC's book and they said we're going to only be cloud and that's going to be our platform. And it's great because it really paved the way for the other SPMs to jump on board. But sorry. Exactly. Because they came out the way they did. They really targeted the commercial or SMB space very heavily. Right. So they went out to help companies transition off of Excel and Access and get onto an automated solution. And so I think they dragged they sort of drug that that reputation with them a bit. And so some of the things that you will hear from clients that go through vendor selections is that they don't have the full robust capability that some of the other applications do or they might get picked on a little bit for performance because you know, you may not see exactly at the big insurance telcos and banking and banks. So great product though, Absolutely wonderful solution. And my argument has always been, hey, if exactly fits your needs, that you know, you shouldn't have any issue.

So two of these, Rob, are broader systems and the others are more standalones. Right. So Oracle and SAP. You mentioned Oracle. A lot of times it's implemented with the Oracle system. But if you take Oracle and SAP, how often are they implemented as standalone SPM solutions versus part of the bigger suite?

Oracle is almost always part of the suite. We almost never see Oracle show up in a vendor selection when Oracle is not the incumbent ERP system or there's not a big Oracle presence oftentimes in the past I think they would give it away. If you bought Oracle Financials, you by default would get Oracle OIC or Oracle Incentive Comp with SAP. Because they bought Callidus. Callidus was a standalone solution. Callidus can still be implemented regardless of a client's footprint or connection to SAP. I mean, you know, there's, there's obvious leverage points for having a bigger or SAP footprint, having access to licenses, having some connectivity and access to different technologies that support it. But SAP by itself, or SAP commissions by itself could easily be implemented for anybody who just needed it, even though they weren't an SAP shop.

Yeah, so what we see a bit of a different dynamic within our clients as well. Just based on what, what you're saying, Rob, in that you'll see a pull toward Oracle or SAP from the IT department of the client, which may not be coming out of the sales organization. Whereas maybe verisant. Exactly. Perhaps optimize, be a little bit more from the sales organization. And you know, so the question of, you know, does it really know what the right answer is? Do they really understand what sales needs versus, you know, should it be driven, the decision be driven out of the sales organization?

Yeah, I think there's certain boxes you need to check for the IT department. I mean, the IT department will have comfort levels. You know, they'll be more comfortable if they're an SAP buying SAP shop buying SAP versus Oracle, something like that. But yeah, when we sit down and we're running a vendor selection, you know, all of our time, not all of our time, but 80% of our time is with the business team. Right. The people that are managing sales comp day to day because we need to understand what the processes are, where they need to take their sales compensation in the future. And that's going to drive, if you will, what are the, what are the requirements that we're going to need to see filled by the vendors? Right. You know, from a workflow standpoint, reporting analytics, you know, how complex of a comp plan are they going to be able to handle? All that stuff comes out of sitting down and you know, those interviews and those workshops with the sales comp team.

All right, so I have one question, which is we've got six companies in the magic quadrant and five that were part of the survey. So I'd like to just say a word if we. Let's just say a word here about Anaplan. This is also another big solution out there. Right. So although we don't have all the stats, can you talk to everyone that's on today about what are some of the good use cases for Anaplan out there today?

Yeah, Anaplan, you know, it's regrettable we didn't have enough stats to pull Anaplan into this, into the study. But Anaplan by itself is a little bit different. Right. So the, all the applications you see that are up on the screen are transactional based, so that you process these transactions and they're designed to do that. Whereas Anaplan is a little bit more akin to Excel. You know, it's a model that you sort of put everything in and you look at it as you go. So I think, you know, for Anaplan, it's hugely adaptable. You can do just about anything with it. You know, similar like you could do with Excel. Where we tend to see Anaplan be very, very strong from an SPM standpoint is when companies already have it embedded and it's being used to do quota planning, territory planning, forecasting and things like that. Right. Because then when you bolt on or build out some sort of SPM or ICM capability, it sort of comes together very easily. On the other side of the coin, if you're looking for something that has a more traditional built to purpose, which is what these other five are, they're built to purpose or built for sales performance management. What you do is, what we've seen is people put the two applications together. So they may use Anaplan for forecasting and things like that, or quota and territory planning, and then they will build integration points to take all that information and port it into the SPM application.

Okay, great. Thanks for that. All right. And I failed to mention to everyone, if you've got any questions for Rob or any SPM questions, please put them in the chat. No, in Q and A. Put them in Q and A, please. Thank you. Okay, Rob, you're. You got the floor.

Okay. All right, so let's, let's get into the survey a little bit. So as I mentioned, we want to ask clients what they thought of their vendors. And what we decided to do is pick these, I'm sorry, these seven categories to say, hey, Mr. Client, you know, you've got this application. How satisfied are you with their capabilities? Right? And so when we think about this, we think about calculation, logic. So think about the comp plans you're putting into the system. Crediting would be, hey, are we crediting five people or are we crediting 150 people? Well, how satisfied are you with the logic that's being provided? Platform integration that simply goes back to, hey, how robust of a data integration strategy do we have to have with our technology? And how satisfied are we that are that it's meeting our needs? The other ones are workflow, think about disputes, think about plan design or compensation plan acceptance, forecasting, reporting, analytics kind of go together but are separated because a lot of times we'll think of reporting as static reports that go out to the, you know, the payees and the managers, compensation statements, things like that. Analytics might be more akin to dashboards. Right. So managers, executives looking at performance of their team, looking at the performance of the plans, things like that. What we found is that as you would expect, the top three integration credit and logic are they're doing a great job. You know, these are table stakes and you can't pay comp unless you get those. Right. So obviously you probably see a better satisfaction. Where we are, I guess, troubled in seeing is that analytics reporting were so low on the satisfaction rating. I mean, especially since these guys, you know, they almost lead with this during the demos. Right. They want to get you excited about, hey, these are the, you know, the bells and whistles that you're going to get through analytics. You know, this is the optics you're going to provide your salesforce. And so when we see such a low satisfaction rating, that sort of makes you wonder, right?

Yeah.

Having. Sorry, Michelle, do you have a question?

Nope.

I wanted to throw one in, Rob. So when we talked before about some of the differences between foundational core functionality. Right. So do the calculations. It's got to work. Right. You mentioned the one provider that had been down for four days. So you've got to have a stable foundation working. It seems like those are the ones that are getting rated more highly at the top. Right. And the reporting analytics, it seems like those are things that would be more for communications to the organization, to the sales organization. Is that right?

Yeah, yeah. And so I don't know to jump in and just populate this out, Mark. But there's a couple of things that I think are driving the lower satisfaction on reporting analytics. One of them is I'm not sure people are doing a good enough job vetting these systems as it relates to reports and analytics. You know, a lot of these systems will come to you and say, hey, you know, if you don't have a set group of reports or dashboards you want, we'll just give you our out of the box. And out of the box is great. It's based on best practice and blah, blah, blah. Well, the problem is if you go with that approach, oftentimes you're going to get what the vendor thinks is best practice, not what you actually think is best practice, or aligns with you. So you end up with something that's not going to meet your satisfaction. I'm not saying the vendor couldn't deliver, but, you know, it kind of, it kind of goes back to. If you don't define your future state for business intelligence around spm, you're probably not going to end somewhere where you're heavily satisfied. But that the second bullet on there does kind of go back to. Sometimes these guys just don't have the capabilities. You know, you get, you get a little bit of a snow job. When you're going through the vendor selection and they're doing their demos and things like that, and if you don't know the right questions to ask, what happens is you're going to buy something that looks great during the demo and you're going to find out, wow, they couldn't really connect those dots. Like, I can't bring this data in and do comparative analysis. So a little bit as capabilities, you know, these vendors do vary on their capability, capable or their functional capabilities. But I think a big part of it is satisfaction because most of these guys have this stuff down, you know, I mean, the capabilities there, it's just you got to tease it out during the implementation and make sure that people adopt it.

Okay, so capability versus satisfaction and customer experience. So capabilities there, maybe they need to work on making it work for the customer.

Right, right. I think the capabilities for most of these vendors are there. I think the satisfaction ratings would be higher if they had a better implementation or they did a better job defining the requirements and defining where they want to land.

Okay, so it's not that your system can't do what you want it to do as a user, it's just that maybe it hasn't been made clear to you or hasn't been implemented well for you.

Yeah, you know, I mean, not a great implementation. I mean, Mark, to be honest, there are systems out there that do have some capability limitations around the reports, analytics, but for the most part, you know, if you vet it correctly, you're going to end up with a system that should do what you need.

All right, so I got a question.

Sure.

We're getting questions in the Q and A, but this is an appropriate time to ask this one, which is the question was, does Salesforce play in the SPM space or is it a feed or how does that work?

It's a feed, it's a feed. So FSDC does not per se, have a purpose drilled ICM or SPM application. We've seen people try to make that happen, but it usually does not work well. What we would often see is a lot of clients will ask, hey, how well does this integrate with salesforce.com and the answer for most of the leading vendors, at least the ones that I put up on the screen, the five it does, it works great. And you can actually create a dashboard, I'm sorry, a page on your salesforce.com login, and you can actually see all your sales comp data as a payee or a manager. And that's awesome. And even to the degree Some of these applications can port your pipeline in and as a payee you can check which, which orders you want to forecast for from a commission standpoint and you can do a personal micro forecasting of the orders for SFTC and see what commissions you get. So it's, it's the integration is there, but SFT does not provide a standalone application.

Okay, great. I'm going to let you dig into the details of the satisfaction by capability and then we'll take a couple more questions that we've got.

All right, let's go from there. Okay guys, so what I'm putting on the screen for you is we took that survey data and what we did is we ranked the vendors based on the, I guess the satisfaction ratings that they got from their clients. Now for this content, obviously we didn't have the biggest survey pool we could get, but we still thought, man, it's interesting, let's put it on the screen. The other thing to keep in mind is we only look for implementations or clients with 100 payees or more. So now if you look at the five vendors, Verisin, exactly. SAP, Oracle and Optimize and you look at the rows Calc crediting platform, all of them did pretty good, right? I mean they all hit the numbers. Clients are more or less satisfied with them. Now that I think plays back to how the vendors did on the cumulative score. When we go to the next screen you see a pretty big drop off on consistency across the vendors. Now there's a couple things to keep in mind, right? So we did have a lower participation patient count. So I think, you know, it's tough to say with, you know, really con a lot of conviction that yeah, this is exactly how we'd expect it to map out if we expanded this to a thousand participants or 1,000 survey takers. But you know, there are some things we can tease out of here. One, Verison did well, you know they did pretty consistently across all the, all the buckets. Xactly did really well on this, on this slide. But the thing to keep in mind with exactly is when we looked at the population of people that took the survey, we actually had a higher population of smaller payee counts. Now there's still over 100 payees. But with Verisant SAP and Oracle, you know, we saw thousands of payees, thousand payee or more survey takers versus exactly was more of them were smaller counts. So you could probably argue that a less sophisticated survey taker might be happier with forecasting, analytics and reporting than somebody that was Managing a comp program for 10,000 payees. SAP. The only thing I could offer here guys is, is that they had some pissed off clients or something because I got, I got, I got nothing to say. Yeah, I got nothing to say other than, you know, it's a good application, it really is. You know, it's got good capabilities. So I, you know, I don't know what to say other than trying to communicate something, right.

Sending a message.

It might have been the fact that, you know, you had that conversion from Callidus standalone to SAP and you had a lot of backend work going for going over to the C4 HANA platform. So there might be some of the dissatisfaction around, you know, the capabilities and that kind of bled into the capabilities. But anyways, I mean, that may be the two anecdotal data points I could offer if we want to keep going. I think this is kind of an interesting screen and this is a screen for the audience that I actually use when I'm sitting down with a client for the first time and we're talking about what SPM is and what it could potentially be. And where we start is that core capability. So I would put this on the screen. I'd say, guess what? The bottom item here box is what you should expect from any of these vendors out of the box, you should expect some level of ETL capability, right? Bringing transaction and reference data into the system. Oftentimes they have a in house homegrown solution or they marry with something like Informatica. Either way, these applications should be able to port your data in. They're going to have some capability on crediting your payees, so you don't have to do that yourself. But they'll actually build the crediting logic in the system, handling just about any comp plan you can throw at it. You know, the five vendors I put on the screen, the big five as we're calling them, they can handle 99% of the comp plans out there. You really shouldn't have to worry. And reporting analytics, there's going to be some baseline capability for reporting analytics and then workflow. Think plan approvals disputes, rudimentary workflow. Again, this is out of the box. Now, as we think about differentiation, as we think about how these vendors differ, let's start looking at it from a user standpoint, like the different groups. Now there's going to be some overlap between these as I populate them, but when we think about the admin or the folks that are responsible for designing the plans, they might be interested in Benchmarks, modeling, integration of territory and quota for modeling and forecasting and planning exercises. Some of the more sophisticated organizations might have multiple OPCOs or international regions and then they might want more advanced workflow, right? So more, more capabilities around the workflow that's already provided. So that would might be a bucket if you will or a list of things the admin and design team might want. The next one is exacts and exacts and finance. So again we see forecasting and accruals be a big one for those guys as we talk to them. Artificial intelligence. So they might want more engagement for understanding the data and being predictive on what's going to going on with their sales comp program. Performance reporting relates back to hey, are our plans actually driving the right behaviors? So Mark and Michelle, this is great stuff for you guys, right? Because your clients are like, hey, you gave us these plans. How do we tell if they're actually doing the right things right? Are they gaming the plan? Are they looking for things? Anyway, that's performance reporting, advanced analytics and then platform integration. The next bucket and the last one is payees and managers. So some overlap. Again, advanced analytics and reporting mobile capabilities. So not just seeing what they'd see on their, their, their laptop condensed, but actually having mobile capabilities be able to drill through and do different things. Pipeline modeling. So as I alluded to earlier, bringing in their pipeline from their CRM application, actually seeing what kind of comp they'd get if they closed self service reporting. So more interactive reporting so they can do more work on their own without bugging the admin team. And then the CRM integration which kind of goes back to that pipeline modeling and just being able to, you know, one click into the CRM and see all the data they want.

Okay, so at first glance on this, Michelle, I don't know about you, but I and a lot of kind of tugging and pulling in different directions in an organization so you know what the core capabilities are. But if you're trying to make a decision as a company, Rob, how do you balance all these priorities out? Or does it really go to whoever holds the power in the organization?

Well, usually when we sit down with a company to go through a vendor selection exercise, the first step is really defining their requirements. What is the criteria they need to use to select the right vendor. And you can imagine that we focus very heavily on the bottom bucket, right, because we want to make sure the core capabilities are going to meet their core needs. When we start to talk about their future state, we might have interviews and conversations with their executive team to talk about, okay, where are you taking the sales comp program? What do you need to see from this sales performance management investment to feel like you're getting what you want from it? Right. So it might go back to, hey, we want to monitor the health of our compensation plans on a quarterly basis. Or I might want a global view into the health of my sales compensation performance or what is the cost of my sales comp at a, at a global view. You know, those kind of conversations are important and they're necessary. But when it comes down to actually putting your requirements together for the RFP and for the demo, you know you're going to have some prioritization, right? You're going to have some weightings, if you will. And so you might weight a lot of the stuff in this bottom bucket as a three, stuff on the top could be sum three, sum two, sum a one. You know, it's a critical, nice to have, it's a wish list thing. But that's sort of the conversation you're going to want to have as you start to develop your selection criteria that's ultimately going to hopefully drive to a good vendor.

Well, I think this is a really great starting point and a lot to consider. So, you know, I think a big takeaway here is here are table stakes around core capabilities that you should expect, expect really out of any of the vendors that you're talking to. And if they're lacking in any of those, you know, five things that you're talking about, you're not comfortable, then maybe they're not the right fit for you. And then really take a look at the organization and understand that the needs are different. This is a great way of looking at it. I've not seen it expressed like that before and I think that's really helpful for people. Now I have a few more questions here. Ready to take a couple more. How important is an organization's data architecture in their. You talked about this a little bit in their SPM implementation experience. Are there steps that an organization can take regarding their data architecture upfront to prepare for a future SPM implementation? It's kind of a big question, Rob.

Yeah, no, no, but it's a great one. It's a great one and I wish more people asked it, especially related to implementing at the enterprise level, you know, mid size companies and very large companies. This has to be on the short list of to dos before you start the project. And the reason I say that is, you know, if you don't have a good understanding of how you're bringing data into your SPM solution, you know, you need to get there, right? Because that is going to be. Usually the long pole in the tent is your data integration strategy and how you're actually going to populate the system with the information you need for calculating comp and producing reports. So sometimes with very large organizations, we may do some sort of readiness assessment, and the readiness assessment comes in and challenges the company to say, do you actually have the data ready to go? Right. Or is it coming in from 15 or 20 different disparate sets of folks? And some of it is subjective, some of it is objective, some of it's automated. Some of it's written down on a napkin. I mean, you got to get that stuff dialed in, because if you jump into an implementation, you start gathering your requirements and designing things out, a lot of it's going to be based on how you've assumed the data is going to be ported in. Now, as I said earlier, all these applications have some capability of porting data, right? You can do manual uploads of Excel. You can do secure data integration with the cloud system that you choose. I mean, there's all kinds of different ways to skin the cat, but you got to look at your data, you got to make sure it's clean, it's ready to go, and you know where you're going to be pulling it from before you start the project.

Yeah, that's extremely good advice. Garbage in, garbage out, right? Same with plan designs. Okay, I've got a question here. And this is really going to be pulling on your 20 years of experience in the space, because they're talking about being up for a renewal with their current vendor. And they said, you know, what do you suggest that they would add or negotiate into a new product? Now, without knowing who they are, what they add, I'm not exactly sure. Right. But they want to know, like, what. What do they do? How would they start? With a negotiations process.

Yeah, that's. That's a great one. I think, you know, if you're happy with the vendor and things are going well and you feel like you're covered and you really don't want to get into a new. New application, I think it's. It's an appropriate time to sit down and actually bring in, in se, a sales engineer, if you will, or a technical resource from the vendor to walk you through all their capabilities that they've been working on.

Right.

None of these vendors are asleep. They're all working on the next greatest thing. And so it's not a bad thing to bring somebody in and have them kind of walk you through, technically, what are all the things that they've got on their roadmap and what they're putting out and then figure out how does that integrate? Because you got to be careful. Right. Just because they bought an application doesn't mean it's integrated with their ICM product just yet. So that's one thing. The other thing I would offer is we probably work with five to six companies a year that are on a system. They're up for renewal and they want to see if the grass is greener. They don't really want to bring the vendors in, but they. They definitely want to see, is the grass greener? Is this application we have today meeting our needs? Is it going to be able to grow with us? And sometimes we come out of those conversations. Most of the time we come out of those conversations with, yes, the application you have is great. It's going to give you what you need. Here are the things to do to get you to where you want to be. However, sometimes we do come out of those conversations with, actually, you have requirements that are never going to fit or at least as we understand the product today, not going to fit. And guess what? We implement these five other applications, and two of them would actually meet your needs. And here's what you might expect if you were to go down that path. So it's not a bad time to at least have some conversations with other vendors, understand what the pricing structure is, and then use that to your, I guess, leverage to get, you know, a, a better deal out of your current vendor or push them to give you some of the things that you. You think you need. And, and Michelle, I know you know this, but we're going to put up some pricing here in a minute.

Yep.

And so for the folks that are coming up for renewal, hopefully this isn't super shocking and you're not paying a lot more than what you see on the screen.

I know. I feel like before I take any more questions, they fit in with a couple of the questions that are coming. So I think I'd like you to go ahead and move on to the next area of this because we have some really good content that you still have to share.

Right. I think the next area that we talked about is really what's the difference between SBM and enterprise? And for us, it's not so much determined on the size of the company. Right. It's usually more akin to the number of payees and the complexity of Their sales compensation program. So if it's wildly complex with you know, with 100 people getting credit for one transaction and you've got, you know, 10 different types of hierarchies and you've got seven different regions around the world that you gotta. Now we're talking enterprise, now we're talking high complexity. The other thing that drives for me enterprise is massive volume, right. If you're running 10,000 transactions a month that you know any of these vendors can handle it out of the box enterprise or SMB, if you are like some of our clients that are running 3 billion transactions a month now you're going to get to a really short list of vendors who can actually meet that need. So what we've tried to do is create a slide that can, that'll effectually share with you. I think what we think are enterprise versus SMB. So enterprise applications for us, the folks that are more akin to and you will see at the big banks, at the big insurance companies, big pharma, you know, Oracle, SAP, Verisent, some of the folks that you know you would see at the mid market or commercial. Captivate, Performio. Exactly. Now as I said, Xactly can fit at the enterprise if it's a, you know, if the, if the requirements aren't pushing Xactly's capabilities, you know, and it could be a good fit. More specifically, the differentiators that I was talking about, you know, if you have multiple hierarchies, if you have very complex crediting, if you have currency and language needs not only for the payees but for the administrators, you know that's, that is, that is a call. High volume processing, complex data management needs. Right. So if you've got, I was on a project one time, we had 70 different data feeds we had to bring into the solution, right? It required a massive amount of effort to get all that data cleaned up and in at a point where you could port it in and then managing multiple business lines and regions. So that kind of goes back to, you know, that global view, right. So if you have seven different groups all managing comp differently, you know, do you need different instances, do they all need to be on the same instance for reporting capabilities but you need data and role based security. You know all those things are going to lead to are you an enterprise or are you covered by SMB? If you're covered by SMB. You know, if you get 15 plus vendors out there you can look at if you're an enterprise or you kind of fall into the enterprise bucket. Yeah, that list gets a little shorter.

So Rahm, on the crossover here, how often do you see situations where you're seeing crossover from one direction or the other, meaning an SMB type provider trying to simply sell too high into an organization that's got too many complex needs or maybe the other direction. You know, we want to put one of the big enterprise solutions in, but it's actually overkill for what we need for an SMB type of situation.

So I'll tackle the last one first. So any of these enterprise solutions can handle the SMB market very easily and I've seen very aggressive pricing from these guys. So even if you are only 100 payees or 150 payees, any of these enterprise applications are going to be a good fit for you. It's not going to be overkill and you're probably going to get a very good price. Now the thing that throws people off, however, that are less sophisticated or smaller is when they go into these demos and I'll pick on SAP is it does look complex. You know, they've got a very robust application, so it can be a little overwhelming. Whereas if you go into a demo with performing or. Exactly, it's clean, it's nice, it seems very simplistic and hey, I can navigate this no problem. The proof's in the pudding though. It's in the details. Because when you start pulling things back and you start looking well for this specific crediting scenario, when I have these 15 people getting credit off this transaction and I have to deal with these clawbacks and these rollovers and blah, blah, blah, that's when it's going to get interesting. That's when you start to find out, hey, which one of these vendors actually meets that the best? Or hey, I do a lot of dispute resolution, you know, and I need to have the ability to change things very easily in all these different areas. All that stuff sort of, sort of gets into it. I've actually forgot your first part of the question mark.

The first one was which actually ties into a question we had. If a company may grow out of.

Oh yeah, yeah.

If they feel it doesn't meet their needs, like what is a good example of that? And how does that, you know, what, what do you see? What, what are the situations that might happen?

Yeah, you know, that's, I mean, I think sometimes what we see is when clients go from, hey, I just care about table stakes. You know, I just need to get transactions in process, get a good report out. When it gets a little bit more interesting is when they start to mature, and they start to say, well, I need an analytics dashboard that tells me if my plans are driving the right behavior. Or I want to roll this spiff out. But I want the reporting to know if that spiff actually drove the results. Right. Was there ROI on launching a spiff or, you know, another. Another one is just when you start doing mergers and acquisitions and you start lumping in these other companies, well, you're typically not going to put them on your exact plan day one. They're going to have to run on their own set of plans until you create a migration strategy to bring them onto your compensation plans or get them under your fold, if you will. When you do that and you start to bring in other nationalities or different companies that are sitting in different regions of the world, that just explodes the requirements that you're going to be putting on the SPM platform. So if you start your path with one of these smaller applications. Yeah. And you know that you might be going on an M and a kick in the next five years. Well, so, you know, you got to keep that in mind. Right. Yep.

You know, with that, I think it's a good segue into some of this pricing. I think people are going to want to know what that looks like today.

Okay, let's see if we can have this. Hopefully we'll drive a question or two.

Yeah.

Okay, so before I put it on the screen, let me see if I can remember the disqualifiers or the qualifiers here. So we. Right, right. So we run a lot. Not a lot, but we run anywhere from 15 to 20 vendor selection a year. And this is when companies ask us, hey, you know the space, you know these applications. Will you come in and tell us what should we be looking at? You know, how do we evaluate these guys? And we'll just come in and we'll kind of help them along with that journey. Now, the results from those journeys are what you're going to see on the screen. I grabbed four different vendor selections and their pricing, and I want to qualify that the vendor in A, B, C and D are not the same vendors, each one. Right. So the prices are going to fluctuate, and it's not the same vendor coming in at the lowest price. And what we're going to start with is smaller accounts, 250c's to 750 payees. Now, pretty big delta between the highest and the lowest on this one. Right. You know, 13 to 25, 38 to 66. You're going to see these vendors not be as aggressive Obviously if they're selling lower payee counts. But you know, on the 750 we do see, we did see something coming at the low teens. The other thing I want to point out that I forgot to is folks on the phone, this licensing is based on core capabilities, right. Comp data and reporting. We didn't include advanced analytics or quota territory stuff, anything that would be considered outside or an add on sale. This was really just for the core product. Michelle, Mark, any questions on this or should I get.

Yeah, no, you can keep going with the, what the pricing looks like. Yeah.

Okay, so this, this is where it gets a little, they get a little bit more aggressive at the higher seat counts. Right. So we have a 2,000 seat that, you know, they got down to eight bucks and they have a 5,000 seat they got down to nine. Again, we were, I'm not saying that the same vendors are the same A, B and C. Right. But you are seeing a more significant drop from what we saw at the 250 seat, more aggressive approach to things. Things. Now again guys, this doesn't include the add ons. It doesn't include potentially an admin cost. Oh, you know what, I didn't even say it. I apologize. This is per seat per month.

Right.

So if you want to do the calculations for yourself and you're sitting at 2,000 seats, you know, my guidance would say, hey, take the middle one. 17 bucks times the number of payees, times the months. That's going to be your annual contract value.

Yep. I think that this is really, really helpful. Very practical. Rob. We get asked this question all the time. The other question we get asked. So this is great, a great guide. I'm assuming you can allow people to have some of this information or direct them at the end of this. But this leads to the other question that they have, which is a crazy one, which is the whole deployment cost of that initial implementation. Talk to us a little bit about this one.

Yeah, so this is a, it's hard to set this, this slide up well. But you know what we, what we've heard or I guess what we've, we even tell people this over the years is expect your implementation to be 1.5 to 2x on your annual contract value. So if you pay $100,000 for your licenses for one year, expect 150 to $200,000 implementation fee. Now that's sort of the rule of thumb or what you hear out of the vendor's mouths. What we've actually found is what you guys see on the right. It is not actually a strong correlation. You see everything that you can imagine, especially if you get a vendor in there that's super aggressive on the prices, but you have a really complex implementation, it's not going to be even close to the 2x. It might be 6 or 7x. So it really does depend on a number of things. And what I wanted to just maybe expand on here is the key drivers are usually the components, right? How many comp plans do you have, how many components in each one of those comp plans and how complex they are for reporting? It's often driven by are you going with out of the box reports or are you going to go with 17 tailored reports because you have to replace what your mainframe is delivering for you and then data feeds. If there's an expectation that your implementation team is going to handle all your data migration, that obviously brings the cost up. If it's handled by the internal team and you're giving them a flat file that's clean and ready to go, totally different. Those are the Go ahead. Sorry.

Well, good, Rob.

And the other, the other piece of it is just work streams. So if you are going into a vendor select. I'm sorry, if you're going into an implementation, testing is often one thing that gets overlooked. You know, if you're working directly with the vendors, they may not mention how much time you're going to have to put in to get the testing done. So if you bring in other work streams like testing or business process change management, or you get into a lot of advanced training, those are all things that kind of add to the cost.

So at first glance, Rob, at the pie chart, you see about half of the situations, 52% or you're going to pay 100% or less than the license fee and then 50%, you're going to pay 100%or more. So it's kind of half and half. And you go, wow, that seems kind of random. But you point out with these variables you have some level of control over this, over what it's going to be. So it's not just that you're going to get charged more or less depending on the deal that you cut, but the more complexities you have, the more you're going to pay. And then the other variable is the better deal that you get on the licenses, the more you're probably going to pay as a percentage of licenses for implementation. Just because it's going to be a higher multiple.

Yeah, I mean, you know, so one of the, one of the things that we try to advise clients on is to the degree you can get ready for this implementation, such as consolidation of data feeds. Even the harmonization of comp plans are going to pay off dividends when it comes to not only the implementation, but the ongoing management. Because if Mark, you know, a client comes to me and they've got 500 payees, but they've got 70 different comp plans and they're all wildly different. Oh, my God. Right? I mean, that's going to be significantly tough to implement for them and manage. And so often my guidance is, look, is there anything we can do to harmonize these plans? Right. Consolidate and repurpose some of the components across the plans? I know you guys get this question on the design side of the house, but that's a big driver, you know, and having a team that does your implementation that will give you that feedback to say, I'm not sure this is a good use of money to try to implement these seven plans for these 10 people. Why don't we think about, you know, putting them on phase two, let you guys get their plans cleaned up and maybe make it a little less arduous when we want to put them in the system.

That gives us something to segue into. We have more questions that we're going to answer offline, everyone. So your questions will be answered. We will be sharing them with Rob. When we talk about the SPM journey, I think it is important to talk about Rob. A good note to leave people with is what are the things they need to do before they even enter that journey or a journey of implementation. So one of the things we talked about is, you know, making sure that your plan designs are in good shape before you make the jump. But even before that, this whole assessment process, I mean, it really does make sense to get some help with your assessment because the choices are vast and it's kind of a very big landscape to navigate unless you really know. And having an approach that also helps you understand the different parts of the organization, the different users that need to be involved in the process up front will help you from, you know, avoid making some very costly mistakes.

Yeah, no, absolutely. I mean, it just plays into, you know, define your future state. I mean, you know, create a. Create a vision of where you want to land, because that's going to determine a lot of what you select from a technology standpoint. It's going to determine your roadmap, your implementation strategy, and it's going to keep you on the right track. Because when you bring these guys in, when you bring the vendors in, they got a lot of great stuff. They got some cool stuff, and it's easy to go, you know, shiny object and get pulled off of some of the core items that you need to have to be successful.

All right, well, thank you so much for joining us here today, Rob. So, everyone, you know, we are, we are happy we. Rob is one of our partners as well. So we work with you on the SPM assessment and implementation. But we hope you enjoyed this as much as we enjoyed talking to Rob. And we are going to be sending you all some valuable information after this and just kind of how you can navigate through your SPM journey. Thank you again, everyone. Have a wonderful weekend and we look forward to talking to you all on our next roundtable. So thanks again, Rob.

Yeah. And if anybody needs a copy of the actual details. Absolutely. Reach out to Michelle or Mark and I'll make sure we get a copy to you.

Thanks, Rob. I would love to send that out to you.

Thanks, everybody for joining us. We'll see you on the next session.

Yes. Thanks a lot.

Thanks, guys.

Bye. Bye.

Happy Friday. Bye. Bye.

Thanks.