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On Demand Compensation Management Partnerships for Spiffed-up Success

Written By: Predrag Jakovljevic
Published On: May 11 2007

As an early entrant in the enterprise incentive management (EIM) and on demand sales compensation software arena, Centive is committed to and focused on the software as a service (SaaS) delivery model only. The vendor remains determined to maintain its leadership position in this new market, as well as to expand its offerings in the on demand-sales compensation space. For more background, please see On Demand Delivery Compels a Compensation Management Vendor and The Compelling Capabilities of One Compensation Management Vendor's Solution.

Partnering up for Spiffed-up Success

As momentum for Centive's Compel continues to grow, the solution has sparked interest from a wide variety of business and technology partners. The most prominent result of this flurry of new interest was the May 2006 announcement of the availability of Compel for Salesforce.com's AppExchange—Centive Compel for AppExchange. With this development, Centive has become a certified solution partner of Salesforce.com, the leading on demand, customer relationship management (CRM) vendor.

Salesforce.com customers can now deploy Compel within their Salesforce.com implementations. The solution will provide these users with an at-a-glance look at interactive dashboards that display quick summaries of key sales performance indicators with a single-click, drilldown capability. Built on the AppExchange on demand platform, Compel for AppExchange has since been available for test drives and deployment at http://www.salesforce.com/appexchange. More recently, Centive has become active within the Salesforce.com Incubator Program, which opened in January 2007 in San Mateo, California (US) for a number of selected independent software vendor (ISV) partners.

Centive Compel for AppExchange is 1 of more than 430 applications created by Salesforce.com and its customers and partners that are now available on the Salesforce.com AppExchange—the world's first on demand application platform. AppExchange (renamed Apex and bolstered by its own namesake programming language) provides ease of customization and integration for Salesforce.com deployments, and enables a slew of on demand applications that go beyond the realm of CRM. Apex enables all of these on demand applications to be easily shared, exchanged, and installed with one or a few clicks into a customer's Salesforce.com account. For instance, Compel ensures a single sign-on with the Salesforce.com application, and is displayed as a commissions tab in the Salesforce.com interface.

In addition to the Salesforce.com Apex certification, Compel features integration with other CRM systems (albeit via either comma-separated value [CSV] files or Web-service integration) to enable sales representatives and managers to forecast compensation based on opportunities within their pipelines. This integration provides customers with full automation of the sales life cycle. Branded as From Prospect to Paycheck, the following phases are involved: qualify, forecast, strategize, close, commission, and payroll (that is, from the point of pipeline initiation through to the commission paid to the sales person).

This integration of opportunity-based earnings and actual commission earnings is aimed at ensuring sales representatives stay focused, aligned, and motivated to close the right business. While sales representatives should be able to more easily forecast their commissions and identify those deals that will maximize individual earnings in a given period, sales management becomes equipped with real-time access to key performance indicator (KPI) metrics to help them better manage their assigned teams.

Through a much tighter integration with the Apex application programming interfaces (APIs), Compel imports pipeline opportunity data to enable sales associates to forecast commission and bonus earnings for current periods. Compel applies import filters, such as estimated probability, amount, seats, stage, completed milestones, and close dates, to allow users to select opportunities that meet specific pipeline criteria.

For example, users can forecast opportunity-based earnings associated with a predicted opportunity close date in the current period, as well as a number of additional days, such as the current month plus sixty days. Compel then calculates projected participant earnings, and processes the associated commission value of these opportunities according to the plan rules, taking into account such factors as reaching higher ramped tiers or hitting accelerators. From their sales dashboards, sales folks can narrow the base filter with criteria specific to their needs. Once the filter is set, Compel automatically saves it, and applies this filter to future opportunity imports. The personal earnings forecast, which becomes more accurate, enables sales associates to better prioritize opportunities and maximize commissions; it motivates sales representatives to keep their pipeline records up to date.

In October 2006, American Express Incentive Services (AEIS), a business-to-business (B2B), prepaid card industry leader, joined with Centive to offer prepaid AEIS cards as a special incentive reward, or sales performance incentive funding formula (SPIFF), option in Compel. AEIS, a joint venture between American Express Travel Related Services Company Inc. and Maritz Inc., provides B2B reward solutions, including prepaid cards, American Express Gift Cheques, and a Web-based reward management tool. Its products address a broad array of applications, such as employee reward and recognition, sales incentives, and consumer promotions, while helping clients drive consumer and employee behaviors, build loyalty, and increase brand awareness.

AEIS's prepaid cards provide Compel customers with a SPIFF option that is distinctly separate from a standard cash reward. A SPIFF is a small, immediate bonus for a sale, and traditionally, SPIFFS are paid, either by a manufacturer or an employer, directly to a salesperson for selling a specific product. However, unlike cash, AEIS cards may be customized and personalized, and can direct recipients' spending options to ensure that the reward is memorable, and that it has some sentimental value, too. A couple of examples of customization options include the ability to control card spend through AEIS's DirectSpend filtering process, and the ability to design a card face to feature a company logo, program theme, and participants' names. With such customization options, reward earners are reminded how they earned the card and who gave it to them every time they open their wallets.

Compel enables users to build SPIFF programs via the product's automated SPIFF Builder. With SPIFF Builder, users can quickly design their programs, choose an AEIS prepaid reward card as the reward option, and launch the program to the participants. The AEIS reward solution for Compel is seen as suitable for such sales incentive and dealer-distributor programs as sales contest SPIFFs, bonus payouts, dealer-distributor SPIFFs, training certifications, new business developments, sales lead referrals, salesperson performance recognition, etc. The idea here is to motivate sales people to deliver measurable results for the business.

Will Centive's Momentum Allay the Concerns of the "Doubting Thomases"?

Following the CompCentral divesture, some observers have rightfully assessed Centive's strategy as risky, given the fact that Compel alone now has to gain a sufficient subscription base to sustain Centive's business as well as any future product development or organizational expansion. The CompCentral business had previously produced most of Centive's revenue, and it even helped fund Compel. But only a minority of Centive's headcount was transferred to Incentive Technology Corporation (ITC). In other words, the staff and investment needed to market, service, and develop Compel will be relatively high initially in proportion to its revenue. The remaining Compel-based revenue streams will be relatively limited in the near future because of the nature of the SaaS market, which is subscription-based, and typically has smaller size deals than the on-premises counterparts.

To allay those concerns somewhat, Centive announced in November 2006 that the number of subscribers to Compel had surpassed the 10,000 mark. As a true indicator of leadership status, Compel has been selected and deployed by more chief financial officers (CFOs) and vice presidents (VPs) of sales than any other on demand sales compensation management system.

The vendor measures its on demand space leadership using many yardsticks, including product functionality, product maturity, number of customers, average customer size, awards, and coverage by the press and analysts. Namely, in addition to surpassing the 10,000 subscribers mark with about 50 corporate customers, Centive is also tracking up in terms of the average number of subscribers per Compel customer. In 2006, that number has reportedly increased by 26 percent, to an average of over 200 subscribers per customer. Compel is now deployed at companies ranging from those with as few as 20 sales representatives to those with over 1,000.

In December 2006, Centive announced MoreMentum, a program designed to help companies gain sales momentum by getting more out of their sales incentive programs. To this end, Centive will provide new Compel customers with free, personalized AEIS cards for use with their SPIFF programs. The MoreMentum program was available to new customers through the end of February 2007. In addition, Centive announced its own "More-Mentum"—a series of real world measurements that should validate the vendor's leadership position in the sales compensation market.

In November 2006, companies such as McData, UTStarcom, Flowserve, SPX, and BBUP completed deployment of Compel. Additionally, in the fourth quarter of 2006 alone, 17 companies, including IKON, ADIC, Knology, Cars.com, and Wolters Kluwer—representing more than 3,000 subscribers—selected Compel to automate their sales commission processes. The momentum continued into early 2007, with new customers that include well-known brands such as McKesson, ChoicePoint, and WebEx. At the same time, new "live" customers in February 2007 included Cars.com, Isymmetry, Intervoice, and the Asia-Pacific division of Quantum.

Product Development and Deployment Partnerships

For better performance and a richer user experience, Centive uses Flex technology from Adobe Macromedia for Compel's user interface (UI) instead of the more commonly used asynchronous JavaScript and XML (AJAX) technology in peer on demand applications. The technology's form elements (expandable and contractible, as required) in Centive Compel's UI, which business analysts use to build compensation plans, make it easy to arrange plan components and unnecessary to fill out a single, cumbersome form. Further, Centive uses technologies from Oracle, Microsoft, and BEA Systems for a strong and secure system performance.

Compel is hosted at a top-security, carrier-grade site that is SAS 70 Type II certified by Ernst and Young, and owned and operated by Computer Sciences Corporation (CSC), as mentioned in On Demand Delivery Compels a Compensation Management Vendor. SAS 70 is an auditing standard designed by the American Institute of Certified Public Accountants (AICPA) to enable an independent auditor to evaluate and issue an opinion on a service organization's controls. The service auditor's report contains the auditor's opinion, a description of the controls placed in operation, and a description of the auditor's tests used to determine operating effectiveness (if the report is a Type II). The audit report can be shared with the service organization's customers (user organizations) and their respective auditors. The service organization is responsible for describing its control objectives and control activities that would be of interest to user organizations and their respective auditors.

Also, while Centive has a back-office staff of nearly thirty individuals who are involved in all aspects of product development, upgrades, updates, and deployments, the vendor also has partnerships with many outside organizations for additional deployment services, customer service, and support. One of the more longstanding partnerships is the one Centive has with Compensation Technologies (http://www.compensationtechnologies.com/). Compensation Technologies is a provider of services for planning, implementing, and supporting a user company's incentive compensation infrastructure. In addition to EIM system deployment services, the firm offers such solutions as needs assessment, requirements planning, business case development, administration support, and outsourcing.

In early 2006, Centive formed a strategic alliance with Southborough, Massachusetts (US)-based Theikos (http://www.theikos.com/)—a provider of CRM-related services and solutions—based on its expertise in sales, marketing, and customer service operations and automation. Under the terms of this relationship, Theikos has been referring Centive Compel to new and existing customers, and providing deployment services to help customers automate the holistic sales process (that is, the previously mentioned From Prospect to Paycheck) to enhance forecasting and to improve sales performance. The firm, which was founded in 2000, and which is a gold-level Saleforce.com partner and leading AppExchange developer, provides implementation, development, and outsourcing services, as well as value-added software solutions.

As Centive's strategy is to form a limited number of strategic partnerships with leading management consulting firms to ensure that all of its customers receive the highest possible levels of service and support, mid-2006 saw a number of additional pertinent alliances. To that end, Centive signed a joint sales agreement with Dallas, Texas (US)-based MW Advisors, LLC (http://www.mwadvisors.com/), a management consulting and technology services firm focused on helping clients accelerate sales through its marketing, selling, employee performance, and technology practices. MW Advisors, with offices in over a dozen major US markets, provides solutions to clients across North America as well as internationally. The provider's clients represent a variety of industries, and range in size from small and medium-sized, private businesses to publicly traded, global companies. MW Advisors has added Centive Compel to its list of solutions offered to its clients.

A similar joint sales agreement was signed at about the same time with Atlanta, Georgia (US)-based GrowthCircle (http://www.growthcircle.net/), a management and technology consulting firm with a dedicated practice in Salesforce.com implementations. In early 2007, MW Advisors and GrowthCircle announced a merger. The new company, Astadia, provides Centive with trained human resources that cover a broader spectrum of territories and vertical markets.

Centive also entered into a joint sales partnership agreement with Atlanta, Georgia (US)-based Profiling Solutions (http://www.profilingsolutions.com/), a systems integration (SI) firm that delivers expertise and tools to streamline and improve customer interaction and retention. The firm has been a reseller of ACT!, Sage CRM, Sage CRM SalesLogix, KnowledgeSync, QlikView, and Centive, and offers a broad suite of solutions and best practices for businesses of all sizes and industries. As a partner, Profiling Solutions will implement and provide deployment services for Centive's Compel sales compensation management solution to new and existing customers using SalesLogix sales and help desk automation software.

Finally, while not providing specific company names, Centive reports it has been actively developing relationships as of April 2007 with potential partners to support international expansion. Several Centive customers use Compel's multicurrency capabilities now to pay their international sales force. Centive claims its plan is to engage and train a select group of partners that will be able to provide sales and services support for international customers.

This is part three of the series On Demand Delivery Compels a Compensation Management Vendor. In the next and final part, Centive's game plan for establishing itself as a leading vendor in the EIM-SaaS market space encompasses a host of strategies, which will be discussed at length.

 
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