One of the most contentious areas inside any company is anything that has to do with sales management, especially when it involves compensation.
IBM today waded into this area with the acquisition of Varicent Software, a provider of analytics software that is specifically designed to optimize sales performance management as it pertains to compensation and other activities such as the allocation of sales territories.
In theory, many companies thought they were addressing this issue when they invested in customer relationship management (CRM) software. In reality, CRM software is used primarily by salespeople to keep track of customer opportunities. The optimization of the sales staff has generally been handled by sales managers working on collaboration with the finance department that typically rely on a custom Excel spreadsheet application that is usually highly prone to errors.
According to Paul Hill, IBM vice president for performance management and business analytics, the acquisition of Varicent Software will extend IBM's analytics push into an area that clearly needs more sophisticated software, especially when transactions frequently involve as many as 20 to 30 sales people who work across multiple organizations.
In general, organizations are pushing for more visibility into the sales process because of increasingly rigorous compliance requirements that are leaving less discretion when it comes to accounting for revenues. At the same time, many organizations want to streamline the sales process as part of an effort to make their organizations more profitable.
In addition, Hill notes that analytics applications allow organizations to better model the sales process within their organization, which should provide greater insights into the impact changes, such as the addition of new sales people in a given territory, might actually have.
Ultimately, Hill says IBM's goal is to close the loop between the investments IBM is making in enhancing the customer experience management process in way that allows organizations to use that information to better manage the sales organization.
In reality, what all this really amounts to is the long overdue application of scientific principles to an area that has been a major source of frustration for business executives ever since the first company was incorporated.