Why you should outsource your sales performance management?

March 6, 2012: Sales Performance Management involves the process of planning, modeling and implementing strategies that will help an organization to improve sales force effectiveness. Sales Performance Management is closely connected to Sales Compensation Management, which when properly managed will lead to higher cost savings and higher level performance.

A good compensation plan combined with properly managed processes and software applications will help firms to better align their sales compensation strategies with desired business outcomes that will have a positive effect in revenue generation.

Organizations world over have invested millions of dollars on building, upgrading and maintain systems with the help of employees, which adds no value to the core activity of the firm. This realization by the firms has persuaded them to outsource such activities, a practice that reduces cost and help the firm to deliver high performance.

There are various advantages with outsourcing Sales Performance Management in addition to cost reduction. They are:

1)      Flexible process: In the case of most of the organizations they follow processes that are manual and cumbersome. In case if the company wants to make changes in the plan, the effort required will be very large and will also introduce errors. Outsourcing it to a service provider with flexible processes will help organizations to eliminate errors and to reduce the effort required. Flexible processes will help firms to scale up their operations with ease.

2)      Better technologies: Since these service providers are experts in the field, they will be updated in terms of technology. The firms on the other hand will be using outdated technologies as they have many areas to attend to. So outsourcing will give firms access to better technologies, which will give them valuable insights that will help firms to drive sales force performance and increase revenues.

3)      Better process expertise: Most of the organizations do not have employees who are experts in the process the company use. Such employees will not be able to carry out the incentive compensation plan of the firm and to respond to changes in the business.  On the other hand a service provider will have specialist employees who have proven track record and expertise in the process they use to serve the clients.

4)      Reduced payment cycle time:  The organizations using in-house SPM will take long durations to process payments to the employees. On the other hand outsourcing will help them the firms to reduce their payment cycle time. The reduction of cycle time can go up to 70 per cent.

By looking into these merits of outsourcing sales performance management, more and more companies worldwide are trying to outsource their activities and thereby reducing the cost and optimizing their performance.

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