The benefits-administration company looks to increase sales performance through Centive's incentive compensation management.
Posted Nov 9, 2007
Payroll, benefits administration, and human-services services provider ADP Data Processing announced this week that it's teamed with Centive to offer the vendor's incentive compensation management (ICM) application to ADP's largest customers. Burlington, Mass.-based Centive's on-demand application is immediately available to ADP's National Accounts Services customers, those with 1,000 employees or more.
When speaking of the agreement, Centive and ADP executives focused on the potential to increase sales performance and manage sales commission via the application. What ADP's move may really signify, however, is the growing importance organizations are beginning to place on tracking and understanding performance-based pay, says Denis Pombriant, managing principal at CRM consultancy Beagle Research Group, .
"When I look at this, it probably has a great impact for the future of work in general," Pombriant says. "One of the problems with providing incentive compensation is it's always been hard to track and manage; products like Centive's make it more easy." Furthermore, he adds, the deal opens up the possibility of incentive opportunities within job positions that traditionally may not have been built to accommodate them.
Such software could also allow larger companies to offer and track goal-setting initiatives on a more frequent basis than the annual reviews many now routinely offer. Such changes, though, may be a ways off, Pombriant admits.
ADP signed off on the agreement because its executives saw a market opportunity to provide services that complement its other general payroll offerings, says Mike Torto, Centive's chief executive officer. "Offering our technology to their customers sounds simple," Torto says. "But managing sales commission is a very complex process and this software will simplify that by making sure ADP customers are using the right sales plans and compensating their salespeople appropriately."
There's little doubt that ADP now views automated ICM as a natural extension of its business. "We're confident this solution will be embraced by the market as a way to effectively increase sales performance and enhance the bottom line," said Regina Lee, president of ADP's National Account Services, in a statement.
Expect other companies to deploy software-as-a-service applications like Centive's for much the same reasons ADP highlights, says Michael Dunne, research vice president at Gartner Group of Stamford, Conn. Many organizations -- of all sizes and industries -- are already looking at software similar to Centive's, he says.
"Sales ICM applications should help organizations gain efficiencies, insights, and versatility in creating, deploying, and administering compensation plans meant to guide and motivate direct and indirect sales personnel," Dunne says.
The sector's growth reflects his thinking. The ICM software market grew by around 15 percent last year -- to $250 million in revenue worldwide -- and is expected to grow at a similar rate in 2007, Dunne says.
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