Compensation Apps: Go for the Best

According to a recently released study from Gartner, the sales incentive compensation market (ICM) is poised for growth due to the functional superiority of best-of-breed vendors, rather than enterprise resource planning (ERP) vendors. Best-of-breed ICM vendors like Callidus, Synygy, and Centive maintain an advantage over ERP players, including Oracle, Siebel, PeopleSoft, and SAP, when it comes to delivering ICM solutions. The study rates the ICM space as "promising," because the market has moved beyond potential to proven performance. ICM systems have demonstrated tangible ROI through increased payment accuracy, reduced support costs, and staff reductions. "Soft-dollar ROI" has been demonstrated through reduced sales reconciliation efforts, improved reporting flexibility, and increased visibility for sales, sales management, and finance, the study states. Gartner uses several criteria to measure vendors in the ICM space, including financial viability and market commitment, functionality and vision, market interactions, and market momentum. Based on those criteria Callidus software had the highest rating, of "positive." According to the study, Callidus showed strong performance in insurance, banking, telecommunications, and manufacturing. The company, which went public in November 2003, also has a strong financial position. Oracle and Synygy came in second, with a rating of "promising," which means that the vendors show potential in specific areas, but it is not fully developed. Oracle's rating is based on its strong performance in retail, high technology, and telecom. However, Oracle is lagging when it comes to banking. The company's products for quota management and territory alignment were cited as very strong. The rest of the pack (Siebel, Centive, PeopleSoft and SAP) all received a rating of "caution," which means the vendors faces challenges in one or more areas. The bottom line, according to the study, is that enterprises should look to replace internal commission-management systems with ICM systems to improve the accuracy, timelessness, and visibility to sales representatives. Best-of-breed vendors offer superior functionality for users seeking to solve the compensation management problems, the study says, while enterprise vendors provide improved functionality for their clients seeking a common business-applications infrastructure.

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