Author: Caitlin Randall
If you are in a sales operations role, you probably know that Excel is one way to calculate commissions for your organization. If you have been using Excel, you also know that Excel has its limitations. When it comes to Sales Performance Management (SPM), a common misconception is that SPM software is merely a substitute for Excel. To be fair, Excel is a familiar and seemingly convenient solution to calculating variable pay. So, is SAP Commissions just an overly complicated solution to a problem you don’t have, or are there genuine benefits to using this SPM solution in your business?
In this blog you will find helpful information about why SAP Commissions is a superior choice over Excel because of its scalability, accuracy, insight, and dispute resolution. Keep reading to determine if an SPM solution is the right choice for your company.
Excel - Excel may be a reasonable choice for a small company. However, an expanding company will quickly outgrow what Excel can easily provide. Tracking customer information or other sales details will grow cluttered and chaotic, possibly leading to missed sales or incorrect payment of sales reps.
SAP Commissions - By contrast, an SPM Solution is exceedingly scalable, and can accommodate the needs of small, medium, or large companies. For global corporations, divisions can be built into SAP Commissions providing additional definition and security. SAP Commissions provides for versatility in payout schedule and unique calendar years. All companies should have a “growth-mindset,” which is why businesses should consider not only what is working today, but what they will need for the future.
Excel - Using Excel as an SPM tool typically requires some level of manual data entry, which invariably will result in mistakes or data errors, potentially leading to lost profits. According to research done by the University of Hawaii's College of Business, approximately 88% of all professional spreadsheets contain errors. For example, a Sales Rep whose annual bonus was off by a factor of 10 would end up with $80,000 rather than the intended annual bonus of $8,000. Hopefully, your rep would report an error this large, but that isn’t always the case. Errors like this trigger an increase in time spent shadow accounting and problem resolution by both sales representatives and compensation analysts, which decreases the productivity of both parties.
SAP Commissions - Alternatively, SAP Commissions can increase profit for your company through automation which increases accuracy and reduces human error during the calculation process. Additionally, automatic data feeds further support efficiencies and the potential for cost reduction and profitability.
Insight and Real-Time Reporting
Excel - Excel is only updated as an admin inputs data, and having dashboards just adds another step to the process. This is time consuming and limits insight for Sales Reps and Managers. The sooner they can see where they stand with their quotas and other compensation metrics, the more time they have to achieve their goals. While Excel can produce graphs and reports for your sales team, it requires multiple human interventions to create and distribute timely information, meaning insights are delayed and visualizing data is a long and tedious task.
SAP Commissions - One of the most appealing features of SAP Commissions is Dashboards and Reporting. A graph is worth far more than just the data behind it in the same way as a picture is worth a thousand words. For example, you can read that a Rep's total sales for the month are $14,523 and that they have a quota of $15,432. You probably understand that they didn’t achieve their quota. You can also tell they didn’t miss it by too much. It may also help to know that their achievement percent is 94.11%. But isn’t it just easier to look at this?
The human mind processes visualization of numbers and data far faster than it can process the numbers and data by themselves.
The Dashboards tool in SAP Commissions provides a variety of ways to display and manipulate data so payees have full visibility into their performance and goal achievement. SAP Commissions even enables custom branding, as well as a mobile app to display dashboards for up-to-date data on the go! (Let’s see Excel do that!)
These dashboards can be updated with the most current data every time calculations are run, so there’s no additional process required to inform payees about their current performance, and no delay in providing detailed, robust, flexible views into sales performance to Sales Reps, Managers, Leadership, and Comp Admins.
Excel - Managing disputes is arguably one of the hardest and most tedious parts of a Compensation Administrator’s job and if you are using Excel, the dispute process is a nightmare. Excel has no real dispute process, so if something is reported or paid inaccurately, (which happens often in Excel), you may even have Reps knocking at your door trying to get the pay they believe they deserve. There is an easier and simpler way of managing disputes.
SAP Commissions - A commissions solution streamlines the dispute process. Without a solution, compensation admins receive a barrage of unhappy emails from Sales Representatives at the end of the month and must keep track of emails and supporting documents all while communicating with Sales Reps and Managers. Compensation Admins using SAP Commissions, though, have a “one-stop-shop” for managing disputes. Not only can reps access current information via their dashboards, but payees can initiate a dispute using a self-guided and intuitive process, attaching supporting documentation for the approvers to review. Automating the process in this way makes disputes easy to track, produces quicker response times, and ensures more accurate payment adjustments. Tracking disputes in SAP Commissions even features an option for automatic email reminders for necessary approvals. For example, if a dispute requires the approval of a distracted Manager, the system can be configured to resend an email after three days, and say, every day thereafter until the Manager approves or disapproves of the dispute.
Other Benefits of SAP Commissions
Before we wrap up, here are a few more quick benefits of SAP Commissions over Excel:
- Excel has information security limitations. While Excel can be password protected, Excel doesn’t have the ability to determine who should be able to see various components of a spreadsheet.
- Also, in Excel, extensive formulas can break, causing corrupt or lost data in a file.
- SAP Commissions offers Single Sign-On (SSO) and PGP encryption on file transfers.
- To solve that pesky problem about who is allowed to see or edit various pieces of information, users can be assigned appropriate permissions determined by their role at the company. Role set up in SAP Commissions is very flexible and allows you to define specifically what a user can and cannot access.
- SAP Commissions provides the ability to safely store historical data which can later be used for reporting, forecasting, and other analytics.
- SAP Commissions also contributes flexibility to companies who must quickly and easily change their compensation plans. And when you make those changes, SAP Commissions is simple to audit, since the details of any changes are logged.
To every problem, there is a solution that is quick, simple, and inexpensive, but in the end, turns out to be the wrong answer. While Excel is a great and versatile tool, it is more of a “jack of all trades.” Excel is like a Swiss Army knife with a lot of “blades.” It can be economical and useful in a variety of situations, but sometimes the job at hand requires an actual pair of scissors or a bread knife, and a little pocket knife just isn’t going to “cut” it. Similarly, if you have a small enough business, you can figure your Sales Rep’s commission in your head. As it grows, you can use a calculator and maybe Excel. Although Excel may work for a small company today, what about tomorrow? You must pick the right tool for the job at hand, and SAP Commissions is a tool specifically designed for SPM challenges. It will scale as your company grows, accurately calculate incentive-based pay, increase efficiency, reduce costly errors, and motivate your Sales Reps through detailed and insightful up-to-date data about their performance.
If you want to learn more about SAP Commissions or still have questions about how it can benefit your organization, read our blog FAQ's about SAP Commissions, or, reach out to our dedicated SAP Commissions team by clicking the button below.