Gartner Survey Shows Sales Incentive Compensation Management Systems Rank High In User Satisfaction and Return on Investment
STAMFORD, CONN., May 27, 2003 — Sales organizations struggling to manage and administer the payments of commissions to sales representatives should evaluate packaged software alternatives for incentive compensation management (ICM), according to Gartner, Inc. (NYSE: IT and ITB). Rating overall product satisfaction in a recent Gartner survey, 65 percent of respondents gave ICM applications a score of eight or higher out of a possible 10.
In December 2002 Gartner surveyed 29 ICM clients on a variety of topics that covered aspects of the selection, implementation and production experience related to ICM applications.
"For the processing and payment of commissions to salespeople, packaged sales ICM applications have become the solution of choice to replace mainframe-based commission systems or spreadsheet-based commission and performance tracking," said Joe Galvin, group vice president for Gartner. "During the next two years, successful ICM system deployments will produce tangible ROI through increasing the efficiency and effectiveness of sales performance management."
According to the survey, 55 percent of respondents who implemented ICM systems indicated that they achieved a positive ROI.
"The high rate of ROI associated with these applications suggests that businesses struggling with cumbersome, inflexible or inaccurate compensation systems should take a hard look at the potential value of replacing legacy systems with the current generation of ICM systems," said Galvin.
Efficiency and effectiveness were also cited by respondents as significant benefits of ICM implementations. Some 88 percent of respondents reported improved efficiency and 85 percent said effectiveness was enhanced.
According to Gartner, as part of the cost justification analysis, businesses should evaluate their commission systems? accuracy and flexibility for commission and performance reporting, along with the associated administrative resources and time required for commission reconciliation.
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