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4 Reasons It’s Time to Upgrade Your Sales Compensation Software

Sales compensation software is a critical component of driving sales performance and productivity. If you’re buried under an endless pile of spreadsheets or slogging away in a legacy ICM system, it’s probably time to upgrade.

If you look closely at today’s top sales compensation solutions, you’ll realize many are stuck in the past. Most of them are clunky, bolted-together systems that claim to automate the process when in reality, users spend more time fixing automation than actually benefitting from it.

Many of today’s top sales compensation solutions have led to overworked sales compensation departments, filled with thankless and unfulfilling roles.

If you are in the process of upgrading your sales compensation software or thinking about it, we’d like to share some reasons why it may be time for an upgrade.

Why It’s Time to Upgrade Your Sales Compensation Software

If you think it might be time to upgrade your sales compensation software, but you’re not 100% sure, the following reasons might push you over the edge.

Reason 1: You’re stuck in spreadsheet hell

Spreadsheets are a great way to share your data with others, but using them for tracking and calculating commissions can lead to costly mistakes. Without any form of data validation, there’s no guarantee that the information in your spreadsheet is accurate. Nearly 90% of spreadsheets contain errors—that means there’s a near 90% chance you’re looking at incorrect data.

Imagine spending hours calculating commissions across dozens of spreadsheets, only to start all over again because one source was out of date. Or worse, you calculated commissions and pushed them to payroll, so now you have to spend all of next week addressing disputes.

Commission errors don’t just lead to extra work — they could be the reason your top sales reps are leaving. Even minor mistakes can cause a rep’s confidence in the company to wane.

Sales compensation software can keep your commission data organized, structured and accurate. The best systems provide reps with transparency into every commission calculation so that you can build trust, and they can ditch the shadow accounting.

Reason 2: You’re completely paralyzed

In the words of my grandmother, “Don’t let anyone talk you into marrying someone just because they got money! It won’t last forever, and it will take all your time and then some!”

Every legacy ICM, SPM, or sales compensation software will claim to check every box in your RFP and rope you in with a low base cost. Only when it’s too late will the truth come out: this implementation will cost you a lot more in consulting fees, training fees, and other hidden costs.

Not to mention your sales compensation team may struggle to grasp the clunky formula-building system.

Legacy tools lack flexibility, usability and still leave you with a pile of administrative duties. It’s may not be spreadsheets, but it sure feels like spreadsheets.

In the wrong hands, legacy tools can create chaos in your organization, leaving you paralyzed until you find more budget and a better vendor:

  • You can’t make plan changes without breaking the automation.
  • You can’t manage the annual comp planning without bringing in a consultant to set up the system.

Sales compensation doesn’t have to be complicated. But making things complicated is how the old guard of the industry makes a living.

Reason 3: Smart team. Dumb incentives.

Don’t believe legacy vendors when they tell you to keep your compensation plan simple. It may make intuitive sense — simplicity creates clarity, which breeds motivation. But in reality, their platforms are too inflexible to manage complex comp plans, especially plans that change often.

A multi-tiered compensation plan is critical to driving desirable outcomes for a large and complex sales organization with multiple products and service offerings.

Complexity can motivate sales reps, especially when they can see their goals and target attainment in a real-time sales compensation dashboard.

Only in the last couple of years have next-generation sales compensation solutions emerged to handle the mounting complexity of compensation planning.

Suppose you want a more robust and complex plan. In that case, the first step is removing the burden of administrative duties like formula-building and commission calculations so your team can focus on strategizing and scenario testing to identify the optimal incentive plan.

Reason 4: You don’t care (about the details)

Well, of course you care. You’re reading this post, after all.

But you don’t buy a plane ticket and expect to have to fly the plane. So why do so many legacy sales compensation systems try to convince you to buy their platform and build an entire department around managing it?

You’re probably buying sales compensation software because A) you want accurate, on-time payouts, and B) you need clean, insight-rich data to steer performance strategies. It’s as simple as that.

If you don’t need (or want) a huge department to manage every intricate detail of your comp plan, then your best bet is to find a vendor that can take on the administrative burden.

Leave the formula building and data structure to the experts while retaining a solid strategic core. Believe it or not, there are solutions that allow that today.

Where is Sales Compensation Software headed?

As the adage goes, “hard times create strong men, strong men create good times.”

Sales compensation expert-turned-founder, Nabeil Alazzam, saw the writing on the wall and decided to create a new kind of sales compensation software.

Nabeil Alazzam headshot brick wall close up
CEO & Founder Nabeil Alazzam

A platform where sales compensation teams could execute unbreakable automation, unlimited scenario planning, and rapid plan changes through simple requests rather than complex formula-building or a mounting pile of spreadsheets.

Nabeil had a vision of a world where sales compensation teams were free from tedious tasks so they could focus on what mattered to them and the company — helping sales teams drive exponential performance improvements.

From that vision came Forma AI, a new way to optimize and automate complex incentive compensation plans. Forma AI is transforming how large-scale sales organizations drive sales performance with a compensation engine light-years ahead of the competition.

If you’re curious about what the next generation of sales compensation software can do for your business, reach out for a demo here.

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