Sales Compensation Graduates to the Cloud

About every 10 years, there is a technology movement that captivates the world and quickly becomes embedded into the fabric of corporate information technology strategies.

In 1998, it was Java programming, with its lure of platform independence – write once, run anywhere.

Early in this century, it was adoption of web services, which would help standardize business transactions and also streamline the exchange of information.  And today, there is no doubt that cloud computing has become the darling of the Enterprise IT landscape.

Many organizations are looking to purchase  cloud based SPM solutions – and there are certainly good reasons to do so.  Monthly subscription service pricing is attractive, upgrades are greatly simplified, new value added offerings come online frequently, and the headaches of the ‘thick client’ on premise Enterprise IT application go away (in theory).  Already, hundreds of companies are using On Demand solutions and many are very satisfied.

How do you know if moving your incentive management and performance reporting to the cloud makes sense for your organization?

Here are some questions to consider when evaluating whether an OnDemand solution is right for your company -

1.  Security
Does your industry have requirements for stringent security requirements (e.g., HIPAA) that exceeds what standard cloud installations can provide?  OnDemand may still be an option however, you may need a specialized installation to beef up the out of the box security.

2.  Transaction Volumes
Does your business have high volumes of data (e.g., telecommunications) or lower volumes of data (e.g., software sales).  For companies with modest amounts of data, leveraging the cloud is straight forward.  However, for companies with gigantic transaction volumes and/or complex plans – the data transfer times and pipeline running times can exceed available processing windows.  There are strategies to deal with the larger volumes (e.g., upload and run more frequently, more powerful boxes etc.) , but careful consideration should be taken before assuming that large and complex businesses can be supported in the cloud.

3.  Existing IT Capabilities
How large and capable is your IT department?  Do you have significant investments in equipment and staffing?  If so, leveraging these resources can make the on premise installation as economical, if not more so, from a total lifetime cost of ownership than the cloud based solutions.

Recently, I have seen several instances where clients have moved commissions and performance reporting to the cloud before getting answers to the questions above.  In one case, data volumes proved to be too cumbersome, and a sophisticated pre-processing algorithm had to be developed (and maintained) after a year of operating a sluggish  solution.

In another, the organization had stringent security protocols, but somehow the cloud deployment escaped the scrutiny of the IT department, and the organization exposed themselves to unnecessary security risk with sensitive information.

The cloud has certainly been a tremendous advancement for Enterprise IT.  Make sure that you thoroughly assess your security requirements, data volumes, and internal capabilities before deciding how best to deploy your SPM solution.

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