Build Or Subscribe For Spm 3
- 1. Deploying Sales Performance Management Programs: Build or Subscribe?
- 2. Executive Summary Many sales organizations today are going through rapid changes whether moving towards a solution selling model, shifting distribution strategies, re-aligning by business unit or product line, initiating new coaching programs, and many others. Enter the first line manager. Arguably the toughest job in any company, this role carries responsibilities as leader, manager, coach, mentor, teacher, judge and jury. Neglected for years, many companies are seeing the need to deliver improved tools and processes for this critical role. Any organization that is looking to utilize technology to optimize overall sales productivity and effectiveness can either build a performance management solution in-house or invest with a purpose-built, Software-as-a-Service (SaaS) performance management solution. A major challenge for many companies is that while the sales function remains the most critical, the sales people – individuals and managers alike – represent a highly fickle and demanding user base with little time for substandard tools or processes. If proposed solutions don’t provide visible and significant value in a short timeframe, they will be shelved in no time. According to global IT research firm Gartner, the annual cost to own and manage software applications can be up to four times the cost of the initial purchase. Traditional technology solutions have failed to fulfill their promises in this rapidly changing climate. At the same time, they have also become more cumbersome to use and less flexible to fit organizations’ changing business processes. Meanwhile, approximately a third of software projects fail to be completed altogether and the remainder often requires twice as much time and money than originally expected. Confronting the Build vs. Subscribe Dilemma When faced with making a Sales Performance Management program decision, there are many variables that must be considered: sales force structure and size; sales management processes; coaching processes; incentive compensation; customer relationship management applications; periodic reviews; training and development initiatives; offline utilization; geographic considerations; and, the corresponding access to volumes of data to support the effort. The key cost drivers for any software implementation are the cost to develop the tool or application, the hardware required to run the application and the people services required to design, deploy, manage, maintain, and support the application. And what about periodic required enhancements? This paper covers the “build vs. subscribe” considerations of an organization faced with the need for a Sales Performance Management program. The first section outlines preliminary issues and the due diligence required to start the process; the second sections presents more in-depth challenges related to the build and maintain internally option; and finally, the third section explains the benefits 2
- 3. of investing with a purpose-built sales performance management delivered via the SaaS model. Preliminary Considerations Whether or not to build an in-house performance management solution boils down to an honest assessment of the needs of the organization and what it will take to meet those needs. Sometimes the nature of the program dictates the necessary direction. Does your organization have an ample supply of highly skilled developers to build, test, implement, stay in tune with the dynamic needs of a fickle user base and provide ongoing support and maintenance? If so, then you should consider building that solution internally. Or do you need to flexibly support your sales teams as they ferret their way through multiple systems and processes such as CRM, SFA, HRIS, ICM and EDW tools across the enterprise? In this case, you should consider investing with a purpose-built, SaaS-delivered solution. Evaluate the following factors in regards to your proposed performance management project: • Availability of in-house resources, including development staff and project management • Complexity and purpose of the project • Time to deployment • Familiarity with the unique business requirements of the daily/weekly/monthly sales rhythm Also, consider these issues: • Can your project's time-to-market strategy define the crucial business requirements necessary for widespread adoption? • Do you have IT members that are experts in sales performance issues, coaching workflow, evaluation workflow and overall performance improvement processes? In other words, is sales performance management your IT department’s core competency? • What is the cost of taking the time to build a system when an established system can be up and running in weeks? • Are your resources best spent developing homegrown data and application performance management software? • Are the day to day needs of your organization being met or is the demand for IT resources already stretched? Still considering a custom-built solution? The next section details some of the problems you might encounter with developing a performance management application in-house. 3
- 4. The Challenges with Custom Performance Management Solutions Many IT departments tend to be biased towards traditional in-house developed tools and applications because they fear they will relinquish control. They may only want to share control with other departments (both internal as well as external) as long as these groups can prove that they can do as good or better job running the application. Even then, some IT departments may still want control due to factors unrelated to TCO or end-user satisfaction. The complexity of today’s computing environments only magnifies the difficulties of implementing custom sales performance management applications. Problems inherent in building these solutions from scratch include: • Too expensive to develop • Too expensive to maintain • Too time consuming • No real program improvements • The benefits of millions of dollars of R&D that is spent by a performance management vendor will not be captured Too Expensive to Develop Many companies underestimate the true total cost of operations for building and maintaining in- house solutions. Unique sales performance management requirements must be captured and agreed to. Developers must be trained and code must be carefully tested. Think about the salaries of your development team, the downtime in user departments during all phases of development, and the opportunity cost of not putting developers on other worthy projects that would propel your business forward. The bottom line: Labor costs dominate custom coding projects, which require significant investments. Too Expensive to Maintain Maintaining a custom-built performance management application and keeping it running on the current platform or a succession of platforms can be an expensive proposition. Is your IT staff ready to take on routinely synchronizing data, managing hierarchies, and providing quarterly upgrades as needs continuously change? And what happens when the programmers who developed the original application move on to other projects and other jobs? The maintenance of custom performance management applications is complex, time-intensive and fraught with undocumented functions. Unless the performance management application is well documented – another complex and expensive proposition – your costs will continue to rise. 4
- 5. Too Time Consuming Traditionally, in-house application performance management projects have involved long learning curves and slow deployment schedules. Time consuming custom development requires considerable due diligence to scope and plan the entire performance management project. Once again, your developers’ time is better spent – and time is money. No Real Program Improvements One danger of in-house development lies in the tendency to fall back on the “one and done” build mentality. The challenge is that sales styles, coaching processes, measurements and review programs are constantly evolving as the business climate changes. Unless your programmers are versed in the latest performance management technology best practices, you risk ending up with something that’s less than what you hoped and planned for which only falls further behind over time. The Benefits of Subscribing to a Performance Management Solution In most cases, a purpose-built, SaaS-based performance management application can overcome the challenges presented by custom-built solutions. Purpose-built toolsets leverage existing expertise and technology and offer the following compelling reasons to subscribe: • Low total cost of ownership (TCO) • Faster time to market • Flexible, scalable implementations • Integrated, cross-functional processes • Automated, standardized design processes • High reliability through proven performance • Enhanced Customer Experience Lower Total Cost of Ownership As stated in the previous section, high costs remain the primary drawback to developing in-house performance management applications. Development and especially maintenance costs are often underestimated. Performance management costs in general continue to skyrocket as enterprise-wide computing environments become ever more heterogeneous and complex. Comprehensive SaaS-based performance management solutions keep these costs down through: • Automation and standardization of the design process, which eliminates the need for 5
- 6. costly custom coding. • Optimization of development resources, programmers are not necessary to deploy the purpose-built system and typically the vendor will configure the system for your needs. • Fast implementation and deployment, which reduces the cost of the entire performance management process. • Broad range of connectivity options, integration options are standard and tested with known systems. • Project scalability, which allows the organization to start with smaller performance management projects before investing for the whole enterprise. Faster Time to Market The long development cycle of a custom-built solution isn’t an option if your organization needs to deploy a performance management application quickly. Every day a system is not in use costs the company revenue and profit. Sales performance has become critical for most companies and purpose-built software solutions offer the following features that speed the time to value of your performance management solution: • Easy to learn, so sales managers, executives and sales people can begin working on performance management immediately. • Easy to design and configure performance management processes and transformation maps for faster implementation. • Short deployment period process has been done before with many customers. • Easy to use, for sales individuals and managers as well as sales operations and human resources staff who have vested interests in the outputs of the program. Flexible, Scalable Implementations Instead of leaving your organization to its standard old “build it yourself” methodology, the best SaaS- based performance management solutions provide maximum opportunities for flexibility. Most include customization/configuration features for fine-tuning the environment as it changes with business needs. Logic and business rule definitions, for example, can be customized to work with native sales systems through user-friendly tools. Open architectures accommodate emerging applications, allowing new technologies to plug into the platform. Through all this adaptability, the performance management application can remain up to date with best practices. In-house performance management applications are often developed to meet the needs of the 6
- 7. moment, without taking into account rising user demands and data volumes. Purpose-built, SaaS- based performance management solutions, on the other hand, meet growing levels of user requests and needs with real-time, event-driven, scalable solutions. Integrated, Cross-Functional Processes Custom-built performance management applications may only address a limited spectrum of performance management issues, including hooks into other processes. The best SaaS options go beyond simplistic performance management projects to aid in managing process and data workflows, including third-party processes. For example, even with several applications linked together, users can get one point of view on the sales organization’s data – they don’t have to toggle between applications. Automated, Standardized Design Process When it comes to sales performance management business requirements, most organizations have similar needs. So why reinvent the performance management wheel when it already exists in the form of purpose-built SaaS-based solutions? SaaS-based performance management solutions automate and standardize the design process. While there’s plenty of opportunity for configuration – as described above – the basic implementation is ready to go. High Reliability through Proven Performance Building a performance management application in-house is only the beginning. Next comes a time- consuming iterative testing process, during which developers fine-tune the application and hope for the best in terms of reliability. In contrast, a purpose-built SaaS performance management solution offers high reliability by definition, right out of the box. Existing customers can attest to its proven performance. Enhanced Customer Experience SaaS is a recurring service, so for a SaaS provider the sale does not end when the initial contract is signed. If a customer does not use the application, they can simply choose not to renew the contract at the end of the contract term. If the system is hard coded and not used, these are sunk costs never to be regained. As a result, SaaS vendors have a vested interest in seeing customers widely adopt and use the application. SaaS vendors need to “win” their customers’ business day in and day out. Often, that translates into more intuitive, easy-to-use interfaces, increased availability and high levels of performance. It is for this reason that most SaaS vendors offer initial and ongoing end-user training, and this training is in most cases included in the service fees. 7
- 8. Conclusion: Subscribe Trumps Build In today’s complex IT landscape and competitive business environment, custom-built performance management applications can’t stand up to road-tested p u r p o s e - b u i l t S a a S s o l u t i o n s . Quick- hitting, cost-effective SaaS solutions can meet your organization’s performance management demands by leveraging existing applications and technologies while taking the burden off of internal development resources. Where custom-built solutions present expensive development and maintenance considerations, SaaS solutions counter with proven lower total cost of ownership. Where in-house performance management involves long deployment cycles, easy-to-learn and easy-to-use SaaS solutions speed time to value. Where custom applications can get mired in old methodologies and lack scalability, available SaaS-based performance management solutions offer the flexibility of customization options and the scalability that meet your organization’s needs – now and into the future. Even though a custom-built performance management application may seem to offer control and flexibility, it will only lock your organization into a suboptimal solution. Is performance management really your organization’s core competency? Can you spare the programming resources? Do you have several months to a year to develop, test and fine-tune your application? Do you want to deliver another sales tool du jour that sits on the shelf due to a fickle user base? If like most organizations you answered “no” to all of the above, subscribing to a highly reliable and functional purpose-built SaaS- based performance management solution is your best option. The ForceLogix Performance Management Solution ForceLogix’ purpose-built, SaaS-based performance management solutions help reduce the complexity, costs and risks associated with in-house performance management deployments by providing a versatile and configurative performance management architecture for rapid implementation, superior scalability, low total cost of ownership and high ROI. The software leverages 30+ years of industry expertise and features a comprehensive set of easy- to-use tools that allows organizations to rapidly deploy performance management processes – regardless of size and complexity – across the enterprise. More information about ForceLogix and Sales Force Optimizer is available at www.forcelogix.com. 8
- 9. What our customers are saying • “All encompassing view of the business at hand.” • “Cut the time to fill out a coaching form in half, if not more.” • “…having all the information available in one spot has helped me to stay on top of potential issues and coaching opportunities.” • “Overall, the efficiency of completing a coaching session has been drastically improved, which allows focusing more on the pure coaching of each rep. Also, with many of us having large regions, the offline tool is great/essential.” • “To me the key has been identifying areas of improvement earlier by making the data readily available.” • “This 360 view has made me a better coach by making me aware of opportunities that I may have missed otherwise.” • “Overall great tool and big improvement from our current excel based coaching forms.” • “Freeing up time to spend more on coaching instead of finding data from multiple sources.” • “Significant improvement. All data is accessible via the new coaching form. No need to run numerous CRM reports.” • “Excellent for accountability.” • “The new Sales Performance Management tool is great…” Contact Information ForceLogix Corporate Office: 100 East Cook Street, Suite 300 Libertyville, Il 60048 Sales: 1-847-281-9308 Email: info@forcelogix.com © 2010 ForceLogix Technologies Inc. All rights reserved. All ForceLogix’ brand and product names are trademarks or registered trademarks of ForceLogix Technologies Inc. in Canada, the United States and other countries. All other marks are the property of their respective owners. 9