Unpredictable and rapidly evolving future scenarios in the commercial field require increasingly quick, flexible and solid decisions to face new problems. Decisions will increasingly be made by mixing qualitative and quantitative data, which implies acquiring a mindset based on data and facts. In a 2021 Commercial Excellence Lab research study, the data-driven decision-making approach emerged as one of the pillars of future commercial strategies. The research highlighted two “major absentees”: Sales Performance Management (SPM) systems and compensation systems, about which companies stated they had not found clear guidelines or new solutions for the “New Normal”.
This prompted the development of a survey to assess the state of the art of Sales Performance Management systems, with a view to getting to know the current situation of the tools and processes for planning and control, reporting and incentive in the sales field.
On April 6, the Commercial Excellence Lab presented the results of a research project on SPM systems (Sales Performance Management**) to 60 managers on SDA Bocconi’s campus and many more who were connected via streaming. This cross-industry study, conducted in collaboration with the Lab’s technical partner Akeron, collected responses from 330 executives from different functions, all involved in the processes examined.
During the meeting, the results of the different aspects investigated by the study were presented: the state of progress of SPM systems; the management capabilities, the importance and the organizational responsibilities of six key SPM activities; the availability of the appropriate technology, tools and processes that enable all the activities for a good governance of commercial organizations, as well as forecasts of future investment in SPM systems and tools.
The same topics were also analyzed and discussed through the direct experience of three managers, Henkel’s Sales Director Consumer Adhesives Hardware & Pro Donato Mancone, Zuegg’s Head of Sales Italy Andrea Signorini and Akeron’s Co-CEO Manuel Vellutini.
This is a major study and an interesting exchange to those who “conceive digital solutions and software not as pure technology, but as culture applied to a technology. Our aim is to continue to develop Akeron’s solutions thanks to a regular dialogue with industry experts and managers,” Manuel Vellutini commented.
“Some of the data surprised me: I would have expected the evolutionary stage of the systems to be more advanced in FMCG. Data, instead, seems to show some gaps that we can fill, compared to other sectors; we have clear areas to invest in and work on”, said Andrea Signorini, Head of Sales Italy at Zuegg.
The route seems to be laid out and there is still a lot to be done, though in different ways depending on the different sectors. Satisfaction with current SPM systems is not high, and most of them remain merely descriptive.
The most advanced systems (predictive and prescriptive) are found primarily among large, top performing companies. The work priorities that have been identified are to have a reporting system that integrates data from different sources, as well as tools to simulate the economic impact of decisions, and be able to calculate incentives/bonuses with fewer errors.
In short, there is still a long way to go, especially because widespread adoption of such systems requires a cultural and organizational change, a change in mindset.
SDA Bocconi School of Management
** Sales Performance Management (SPM) is a set of software tools and applications that perform data-based integrated analytical functions that can improve the effectiveness and efficiency of decisions concerning the various operational and back-office processes in the sales environment. These range from the definition of objectives to the planning of activities and the evaluation of sales networks, up to the optimization of reward and incentive systems and the design of sales regions.