The Illusion of Control in Enterprise Sales Compensation Management
Many enterprise sales compensation teams are living in a fantasy.
Glorified DIY formula builders and insanely complex spreadsheets are considered an acceptable norm, simply because they maintain the illusion of control.
Having full access to the systems and formulas of your sales compensation software might seem like more control, but a lack of standardization puts the integrity and architecture of your plan at risk.
Too much control can actually reduce how much change sales compensation analysts can enact on the compensation plan and structure—especially when they’re scared they might break the perfectly architected plan.
Ironically, learning to become an expert in implementing enterprise sales compensation software can result in the loss of control of your incentive plan, not the gain of it.
The Illusion of Control
We see these three trends in the enterprise space:
- Manual creation and continued maintenance of commission payout rules.
- Inaccurate tracking of change requests.
- Lack of transparency into how an incentive compensation strategy drives business objectives.
That doesn’t seem like a whole lot of control.
Most of the sales compensation automation solutions on the market today provide complex tools to help you build the rules and automation to administer sales compensation yourself.
That means that in every large enterprise there is a dedicated team or individual superusers. These superusers perform all the integrating, manipulating, rule-writing, and data translation. And most of the time, these superusers end up being the sales compensation analysts.
The value in having a comp team is that they’re able to perform complex analyses and help project different revenue scenarios. Analysts shouldn’t be spending their time writing and rewriting computer programming. Analysts should be barred from building any formula. Rebuilding automation rules in software should not be on any sales comp analysts’ to-do list.
Lost in Translation
The reality is that business leaders often do not understand either the incentive compensation plan or its impact on the rest of the business without the superuser. There is a layer of translation that is required from business leaders to comp analysts to automation rules and then back up the chain.
All that back-and-forth and deciphering happens over countless emails, phone calls, or chat messages that request additions or removals of plan attributes. And all this disarrayed chatter has profound implications for audit compliance.
At the end of it all, a business needs to work toward measurable goals to define success. Finance is often tasked with identifying cost savings and areas of optimization. Usually, that means answering questions like: why did we spend so much paying our sales reps? Or, are we incentivizing our sales team in a way that drives the right behavior?
A well-structured and easy-to-understand incentive compensation plan will provide a clear path to achieving your business goals. When a strong foundation has been established, the painful yearly tradition of recreating compensation plans becomes a matter of making a few changes here and there. It becomes a repeatable process, which means more time for your Finance and Sales Comp team to spend optimizing.
How to Take Back Control of Your Incentive Compensation Plan
Control is not about formula inputs and data management. It is about identifying your ideal outcomes and the steps you need to take to get them.
A proper sales compensation strategy is less about getting from point A to point B and more about figuring out if going to C or D, or jumping to E could be more beneficial to the business.
Most sales compensation administrators at the moment are so busy “controlling” the bi-weekly grind — getting from A to B every two weeks just to meet payroll — that they never have the chance to figure out a better way to do it.
Contrary to the status quo, sales compensation teams with Forma.ai aren’t bogged down by the daily administration of payroll.
They aren’t furiously updating spreadsheets, reprogramming rules, or troubleshooting payout errors. Instead, they’re defining what success looks like for their organization and what behaviors are required to get there. It’s the kind of valuable activity that highly qualified analysts should be doing.
And yes, we really said no more formula-building (you’re welcome).
By taking control of payroll administration, we free sales compensation analysts to make a real impact on sales strategy, elevating their role within the organization.
They are able to leverage insights found in our dashboards, reports, and scenario analysis to advise changes to their comp plans and deliver measurable sales results that get them noticed in the boardroom.
They have more control because when they want to make a change, they can. It goes into the platform’s ticketing system and a few hours later comes back either done or with a due date for completion.
Forma.ai is further proof that letting go of control over the nitty-gritty execution allows you to control the big picture; the decisions that drive big results for both the company and your career.
Want to see how it works? Request a demo of Forma.ai here.