The Compelling Capabilities of One Compensation Management Vendor's Solution

Centive, an early entrant in the enterprise incentive management (EIM) and on demand sales compensation software arenas, is focused solely on the software as a service (SaaS) business model. With its product suite Centive Compel, the company maintains its leadership position in the on demand-sales compensation market. Centive also plans to expand its solution set to include other high-value on demand solutions in support of its vision for the sales operations center. For more background information, please see On Demand Delivery Compels a Compensation Management Vendor.

Zooming in on the Centive Compel on demand-sales compensation management solution, the product aims at automating the entire sales compensation management process, including plan creation, testing and management, commission and bonus calculation and approvals, posting and reporting, modeling and analysis, plan document distribution and approvals, and dispute resolution. In other words, the solution was designed to go well beyond simply calculating sales compensation; it helps users to align their sales organizations with their corporate strategies by rolling out more effective and timely sales compensation plans.

Indeed, Compel's real-time visibility into sales performance metrics and analysis should sanction executives and managers to identify issues and trends, take proactive measures, and track and communicate interim individual and team results—all in time to make a difference. Because the solution is an automated, secure, and auditable system, it should foster tighter cost control and greater financial integrity and compliance in the commission accounting process.

In terms of sales plan execution, Compel delivers the flexibility needed by users to easily create, manage, and modify plans without much (if any) dependence on the information technology (IT) department, where day-to-day management is automated with full audit capability, adjustment processing, and process controls. Executives, managers, and compensation analysts thereby gain mid-cycle visibility into more accurate performance data and metrics to motivate performance, analyze plan success, and model for the future. Last but not least, with Centive Compel, organizations are equipped to motivate not only sales representatives, but also partners and channels, to efficiently achieve specific performance goals.

The strategic angle to sales compensation management includes modeling and forecasting capabilities (that is, of new plans, new data, new plans and data, actual versus planned or modeled analysis, etc.), payee modeling (that is, ascertaining potential commissions), and management and adjustment capabilities of compensation strategies to achieve better sales performance and revenue. Pivotal here is the actionable information via interactive (dynamic) drilldown dashboards and graphical analytics for all involved parties, since long gone are the days of waiting weeks, or even months, to receive hardcopy reports on the organization's sales and performance metrics.

Centive Compel's on demand technology strives to allow sales representatives, managers, and executives to access and, where appropriate, share key performance and earnings indicators in near real time. New what-if scenarios can be built on the fly, and the results can then be stored, compared, and securely shared, which precludes the need for traditional spreadsheet formula changes, macro manipulations, or updates to a series of pesky, interrelated spreadsheets. Consequently, there are no inherent risks of making macro errors, forgetting to change formulas (and to apply them across the board), or committing calculation logic errors.

To that end, Compel offers four different reporting options, each a native part of the solution, and delivered on demand. Users can access information via

1. Compel's interactive dashboards for ad hoc queries (that is, a sales dashboard with transaction details or an executive dashboard with actual versus modeled results);

2. creating and publishing custom reports (that is, a Subordinate payout by manager report) in Compel's Custom Report Builder;

3. viewing a plethora of canned reports (that is, employees' commission statements); and

4. creating custom data exports to Microsoft Excel for further manipulation and analysis.

Centive is quite proud of its reporting paradigm, which provides interactive drilldown dashboards for sales and executive staff. That is, instead of viewing static reports in paper or Web format, Compel users access live dashboards with intelligent summary views linked to well-organized detail views. The information is dynamic and vital, pertinent to the user type, neatly presented, and easily navigated, with drilldown access to transaction level detail. For instance, central to the product is a dashboard where sales personnel can always check their alerts, correspondence, participation and attainment in special programs like spiffs or the president's club, and their commissions and due compensation, which all customarily lead to more immediate satisfaction.

Sales staff, for example, can quickly get the "big picture" from a summary view displaying their sales, attainment, and commissions earned. From this summary dashboard, representatives can then drill down to the transactions related to a specific plan measure, and then summarize, group, or sort these transactions to quickly find specific transactions and to examine related earnings. Sales representatives can even view how their commissions were calculated. Moreover, it is not a static system for checking commissions, since salespeople are able to interact with the system and momentarily obtain answers to the questions such as "How many sales calls, and within which prospects, must I make to achieve my quota?" or "How many orders do I need to close and deliver to win that trip to Fiji?"

On the other hand, managers and executives have access to the key information they need to measure and manage their teams. To that end, they can see virtually, in real time, how their teams are performing in terms of both sales and incentive pay; they can rank individual performance by various attributes and drill down to individual-level information. The executive summary view includes key performance indicators (KPIs) such as percent of total sales, cumulative percent, and percent of pay based on a specific measure. Empowered with such vital information, managers can then use Compel as an influential coaching tool in one-on-one meetings, as they should then know what people, territories, and products outperform and under-perform, and what the impact on individual earnings is.

Last but not least, as a strategic tool, Compel does not stop with reporting. The solution also presents executives with graphical analytics to compare and contrast performance across multiple dimensions. The ability to compare actual versus expected results allows managers and executives to monitor and adjust the effectiveness of compensation plans in a timely manner. They can even link back to the particular plan model to review incentive costs at the macro- and micro-levels, as well as obtain a snapshot of their teams' attainment distribution curves to easily assess the effectiveness of sales quotas. For more information on the enterprise incentive management-incentive compensation management (EIM-ICM) constituencies and their particular needs, please see Enter Enterprise Incentive Management and Incentive Compensation Management.

As Compel is a Web-based solution delivered in the SaaS model, it does not require an additional software development kit (SDK) to install or maintain it. Furthermore, no additional hardware or software is required to use the system, which has a completely configured user interface (UI) and an access point through a Web browser. The product also has the ability to support subsidiaries and affiliates of the user company, as these potential future businesses can be built into the Compel database, or they can be designed as completely separate units, depending on organizational roll up and reporting needs. Finally, the product supports multicurrency and dynamic currency conversion requirements for companies with operations that extend internationally.

In summary, Compel contains all the necessary tools to help users design, model, test, roll out, calculate, track, communicate, manage, and pay on the most effective sales plans for their organizations. The product was awarded the 2006 CODiE award for Best Financial Software, the 2006 CRM Excellence award from Customer Interaction Solutions, and the 2007 WizKids CRM award. The CODiE award, presented by the Software and Information Industry Association (SIIA), represents the highest honor in the software and information industry, and is the only peer-recognition program of its kind.

Centive's Compel(ling) Roadmap

Despite the product's notable functional scope, Centive is committed to maintaining leadership in on demand sales compensation management, and the vendor believes it now has sufficient resources (including the cash received from the recent CompCentral sale) to fund product research and development (R&D) and business initiatives for some time to come. Compel is supported by an expert professional services team that has years of experience in sales incentive compensation, as Centive currently employs nearly sixty well-versed individuals. Two years ago, the vendor proclaimed its commitment to at least two major releases of Compel per year. The vendor maintains a detailed internal product roadmap, along with a detailed feature list having precise enhancement specifications that are targeted for each release.

With the upcoming spring 2007 release, Centive will have successfully achieved the stated release cycle for five consecutive releases. The scope of each release is locked down incrementally as the prior release is introduced to the market, which incorporates the most requested enhancements and new features. It is Centive's goal that each release of Compel delivers a solution that is aligned with market needs and that supports an evermore rapid return on investment (ROI).

Compel's product strategy and release plans are driven by feedback from Centive's Customer Advisory Panel (CAP) and prospective users. Such feedback enables Centive to consistently maintain perfect subscriber loyalty. The CAP includes key customers and partners, all of whom are committed to successfully managing sales compensation with Compel. CAP attendees meet periodically with Centive executives and prereview the forthcoming release. They discuss role-based customer experience, IT strategy, and data integration, as well as professional services and customer support. Attendees also share their sales operations goals, and provide feedback for the next release and overall product vision.

The CAP program, along with ongoing customer visits and market research studies, is vital to keeping Compel focused on customer and market needs. Centive claims that one of the key reasons for Compel's success is that each product release is driven by and prioritized based on customer and market input. Therefore, it is no coincidence that over 90 percent of Compel customers serve as references for the vendor and its product.

On Demand Compensation Management Partnerships for Spiffed-up Success

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 (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 (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 (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 (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 (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.