Market Perspectives

ISG Research is happy to share insights gleaned from our latest Buyers Guide, an assessment of how well software providers’ offerings meet buyers’ requirements. The Sales Performance Management: ISG Research Buyers Guide is the distillation of a year of market and product research by ISG Research.

For almost 20 years, the annual planning exercise at most enterprises has included planning for how the sales organization will address the following year’s territories, quotas and incentive compensation plans. This collectively is referred to as Sales Performance Management. If not using a homegrown system or spreadsheets, enterprises can acquire and use specialist applications developed to address territory planning, incentive compensation planning and administration, including crediting and payouts or both. Typical users are in sales operations and finance, and sometimes HR.

To achieve these aims, leadership and planning are key. Unlike in years past, modern sales planning processes are dynamic and need to be open to continual adjustment and revision as events on the ground unfold. Sales reps change roles or leave. Competitors introduce new products or run aggressive price discounts and other promotions. For many enterprises, new digital products and services afford the ability to rapidly innovate or introduce new bundles requiring reworking of quotas, compensation and territories. To support this more dynamic approach, changes in the approach of strategic leadership and in the planning, monitoring and real-time adjustments via sales operation teams are essential. Sales-driven organizations must manage operations with performance demands in mind and ensure consistent results every quarter, month in and month out. Sales leaders need to implement processes that support overall strategy and growth, and also optimize both sales professional talent and the selling experience needed to achieve expectations.

ISG Research defines sales performance management (SPM) as a coordinated set of sales-generating and related activities, processes and systems that enable enterprises to plan, execute, monitor and adjust in real time to achieve customer, product and sales targets.

The need to maximize sales and revenue outcomes from sales teams creates challenges for many organizations. Key revenue responsibilities across departments that generate new business and client relationships and expand sales to existing customers are all about setting up sales efforts in an effective manner. This includes territories that are balanced, quota and incentive compensation plans that are coupled with sales resource capacity, and the development of reliable sales and revenue forecasts that work in concert to achieve overall sales goals and outcomes.

New initiatives from technology providers that apply artificial intelligence (AI) and machine learning (ML) to historic data can create new insights to inform both management and sales-focused professionals. The use of AI can be applied in a variety of different ways, from individual deal-scoring to overall pipeline health and identifying upsell and cross-sell opportunities for existing customers, as well as next-best-action recommendations. All this information can be used to inform sales forecasts with a greater degree of accuracy and predictability than traditional bottom-up judgement forecasting on its own. And in response to the increased pressure to retain sales talent, it can be used both to improve individual and team success and to highlight those at risk of leaving.

For many enterprises, revenue is primarily derived from existing customers, so using extensive first-party customer data from all internal sources, including ERP, accounting, billing and support systems with third-party data, can help inform total customer lifetime value and be part of a more targeted territory, account and quota planning process. Ensuring that all buying and selling channels and departments contribute as fully as possible to the success of the organization—to retention, growth, profitability and the overall customer experience—requires not only dedication but effective strategy and planning. A well-developed strategy to utilize current and future talent for sales efforts is essential for the best possible performance. To carry out this mission, enterprises need a set of coordinated sales-related activities, processes and systems that enable the sales teams, from leadership and operations to the manager and sellers, to operate in a coordinated and collaborative manner.

Sales teams are designed to deliver the most effective return on an enterprise’s products and services across customers or consumers and must ensure that selling is done efficiently and intelligently. Sales channels and departments are typically complex entities, often with cultures and historical approaches that can inadvertently sabotage their performance. And many in leadership believe that sales teams can adapt and change their behavior without seeking out and using best practices.

In our view, effective management across sales operations requires well-designed and continuously optimized territories and accounts aligned with quotas that are designed to achieve an enterprise’s full potential. Territories can be based not only on geography but on a variety of alternate drivers, leading to virtual territories more aligned with current needs.

Quotas need to be linked to both overall organization objectives and product and service category targets. With the advent of self-service and digital channels, and as customers can engage across multiple channels for a single purchase, both quotas and territories must ensure sales individuals are not penalized or disincentivized. To remain flexible and responsive to market conditions, enterprises should employ the concept of continuous sales performance monitoring and adjust territories, quotas and incentives based on data-driven insights and forecasts rather than a whim and gut feeling.

Use of analytics and data from operations and planning can assist in sales-related compensation plans that utilize commissions and incentives to influence and align behavior and priorities. To optimize sales performance, enterprises must be able to design and apply incentives that motivate those supporting sales generation to reach their targets. To evaluate whether compensation plans and incentives are effective, sales leadership, operations and finance needs tools to help assess the relationship between plans, targets and actual performance. Comparing compensation and incentive plans among all sales personnel, and with other parts of the enterprise, for example, can help managers determine whether what they provide is appropriate. Goals and objectives must be defined, established, tracked and then linked to incentives and rewards to help guide sales performance. Moreover, enterprises need to know whether their compensation is competitive in their market. Using benchmarks to compare compensation to that of others in the industry can provide this information.

The increasing complexity of omnichannel engagement is challenging enterprises to develop plans that will achieve balanced revenue performance supporting overall objectives. Emerging AI-based optimization increasingly will offer more sophisticated guidance and aid in territory, account and quota alignment as well as help to design incentive plans that reflect omnichannel buyer engagement. In fact, we assert that through 2026, software providers will be utilizing AI to provide plan templates and optimization to both speed time-to-value and help enterprises deploy performance plans using best practices.

The traditional use of spreadsheets to manage sales operations and performance is ineffective and can be problematic when trying to achieve optimal outcomes. Spreadsheets are not designed for managing the data needed across multiple sales channels or the varying types of buying and selling channels that must be measured toward goals and targets. Spreadsheets also cannot scale as a company grows. The use of multiple spreadsheets, often stored on users’ local drives, is a factor in producing scattered information, which the majority of enterprises cite as a major impediment to managing sales performance. A dedicated approach to SPM can provide a better method to achieve an enterprise’s goals.

Even sales-related applications such as sales force automation (SFA) and customer relationship management (CRM) that are designed to capture data about accounts, contacts and opportunities cannot deliver optimal visibility into overall sales performance in the way that a dedicated SPM system can. Dashboards and reports from SFA systems typically look only at historical performance, but backward-looking reports can’t provide timely guidance on the current state of quotas and incentives for sales professionals and are not flexible enough to provide information on, or credit, others involved in deals.

The next generation of sales leaders will embrace the need to focus on creating processes that generate and project predictable revenues. Sales performance management systems should deliver functionality and support that enables enterprises to plan for and optimize revenue growth across all relevant teams and channels. And in today’s fast-paced and dynamic business environment, the ability to react to changes on the ground with revised territories, one-off SPIFFs and adjustments to incentives requires applications to be responsive to non-IT admins and subject matter experts. Finally, the importance of aligning marketing, sales, operations, finance and HR means that SPM applications need to easily integrate and communicate with other core systems such as ERP, accounting, HR and CRM systems.

Our comprehensive evaluation of providers takes into consideration all the preceding characteristics needed for a sales performance approach. Our Buyers Guide report will be of relevance to those organizations that have decided to adopt a sales performance approach or are investigating it.

The ISG Buyers Guide™ for Sales Performance Management evaluates products based on sales resource capacity, territory and quota planning, incentive compensation planning and execution, sales and revenue forecasting, and the use of data and analytics to identify process improvements. The evaluation identifies capabilities that enable enterprises to plan for and execute against objectives by aligning and incentivizing all those involved in supporting sales and to identify ways to continually improve.

This research evaluates the following software providers that offer products that address key elements of sales performance management as we define it: Akeron, Anaplan, Board, Forma.ai, Jedox, Oracle, Pigment, Salesforce, SAP, Varicent and Xactly.

This research-based index evaluates the full business and information technology value of sales performance management software offerings. We encourage you to learn more about our Buyers Guide and its effectiveness as a provider selection and RFI/RFP tool.

We urge organizations to do a thorough job of evaluating sales performance management offerings in this Buyers Guide as both the results of our in-depth analysis of these software providers and as an evaluation methodology. The Buyers Guide can be used to evaluate existing suppliers, plus provides evaluation criteria for new projects. Using it can shorten the cycle time for an RFP and the definition of an RFI.

The Buyers Guide for Sales Performance Management in 2024 finds Oracle first on the list, followed by Anaplan and Xactly.

Software providers that rated in the top three of any category ﹘ including the product and customer experience dimensions ﹘ earn the designation of Leader.

The Leaders in Product Experience are:

• Oracle.
• Anaplan.
• Xactly.

The Leaders in Customer Experience are:

• Anaplan.
• Oracle.
• Xactly.

The Leaders across any of the seven categories are:

• Oracle, which has achieved this rating in seven of the seven categories.
• Anaplan in six categories.
• Salesforce in four categories.
• Xactly in two categories.
• Board and Forma.ai in one category.

The overall performance chart provides a visual representation of how providers rate across product and customer experience. Software providers with products scoring higher in a weighted rating of the five product experience categories place farther to the right. The combination of ratings for the two customer experience categories determines their placement on the vertical axis. As a result, providers that place closer to the upper-right are “exemplary” and rated higher than those closer to the lower-left and identified as providers of “merit.” Software providers that excelled at customer experience over product experience have an “assurance” rating, and those excelling instead in product experience have an “innovative” rating.

Note that close provider scores should not be taken to imply that the packages evaluated are functionally identical or equally well-suited for use by every enterprise or process. Although there is a high degree of commonality in how organizations handle sales performance management, there are many idiosyncrasies and differences that can make one provider’s offering a better fit than another.

ISG Research has made every effort to encompass in this Buyers Guide the overall product and customer experience from our sales performance management blueprint, which we believe reflects what a well-crafted RFP should contain. Even so, there may be additional areas that affect which software provider and products best fit an enterprise’s particular requirements. Therefore, while this research is complete as it stands, utilizing it in your own organizational context is critical to ensure that products deliver the highest level of support for your projects.

You can find more details on our community as well as on our expertise in the research for this Buyers Guide.