Contradiction Prediction
Posted by: hgoldberg on Mar 08, 2011
Predicting the future is hard, especially when it comes to enterprise software sales. Forrester says ERP spending will be down, Gartner says it will be up. In the Sales Performance Management category, we are seeing significant interest that started early in 2010 and seems to be continuing in 2011 for our products and services. We believe large enterprises are coming to three conclusions as the recession recedes and growth returns that is driving uptake of SPM solutions:
- Should I be in the software development business or should I purchase my applications from a company that does this full time? In more and more cases companies are saying that as they focus on their core business execution, they should count on experts to provide them with the applications they need to run their business. In a number of customers this includes not just building the application but also hosting and managing the application in a cloud environment. We have a number of customers today who are relying more on the Merced for their entire solution and freeing up their IT organization to focus on projects core to their business.
- Companies are looking at sales effectiveness more closely than ever. We are seeing this in the job growth numbers. Although companies are growing again, they are not adding people. This growth is being fueled by an increase in effectiveness and productivity. To grow your top line, you need a highly effective sales organization with the same or less staff than you had last year and to get to this stage, you must start looking at Sales Performance Management. In CSO Insight's study on Sales Compensation and Performance Management organizations that install Sales Performance Solutions simply do better. They sell higher margin products (31% to 52%), are better at cross sell and upsell (45-57%) and they are better at forecasting their businesses accurately (11-22%).
- Companies have to continue to save money. Commissions, Spifs, Marketing programs, variable comp, bonuses make up one of the largest expense items for business to consumer companies. A 1% savings in these expenses can lead to millions of dollars in savings. With the average SPM project saving between 5-10% in variable compensation costs, the amount of resources that can be directed to other strategic projects or the bottom line in a company is huge. We have seen a number of customers in the telecommunication, banking and financial services industries all reap these savings by implementation Sales and Service PM solutions.
Merced Systems finished up 2010 with a 34% year over year revenue growth. Our customer base represents some of the largest companies in the world who are seeing the type of productivity and dollar savings they need to be competitive in their respective markets. We won’t know until the of 2011 who was correct on the ERP prediction, but we know that in the area of Sales Performance Management, companies are more interested today than ever before for this application.
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Author: Harold Goldberg
Harold Goldberg is the Chief Marketing Officer and Vice President of Strategy at Merced Systems. Goldberg brings more than 25 years experience in senior marketing, strategy and sales roles at top-tier organizations.