Varicent Blog

As a CMO, I have the opportunity to speak with many sales leaders about their experiences with sales performance management (SPM) solutions. One recurring frustration they share is the struggle with inflexible systems that create more problems than they solve. I recently spoke with a CRO who expressed challenges with their current platform: "There's always going to be that 5% of data that’s not right—but if you get 95% right, that’s okay. I feel like [our current solution] gets it right only 40% of the time. What's worse, it's a black box, and sellers can't see why they are getting paid what they are. The minute a salesperson thinks they’re getting shortchanged, their head is out of the game." This isn’t an isolated issue. Studies show that fewer than 50% of sales representatives have met their quotas every year since 2017. While there are likely many culprits for this, one thing we do know is that companies using manual sales planning and compensation processes lose 2%–5% of revenue due to inefficiencies and unoptimized rep assignments. The True Cost of Compensation Confusion When sales reps don’t trust their compensation system, the impact goes beyond frustration. Lost Productivity If you work in comp, you know that your goal is to keep sellers selling. But when you have a tool that doesn’t give reps complete transparency into what they’re earning and why, they spend their time verifying commission calculations and sending you questions about it. Instead of selling, they’re spending up to 10% of their time on unnecessary admin work. Meanwhile, admin teams end up spending too much of their time dealing with compensation disputes, pulling reports and responding to inquiries. Financial Losses On the surface, 2% revenue leakage from compensation errors (both human and system) may seem small. But at scale, that 2% means millions in lost profit! Overpayments don't just drain budget. They force finance teams to track down errors, process corrections, and reconcile discrepancies. Inaccurate payouts also throw off financial forecasts, making it harder to predict expenses and plan with confidence. Morale When reps don’t trust whether they’re being paid correctly, they get upset. (Rightly so!) What happens then? First they get disengaged, then they start looking for a new job. And as you know, the cost of replacing a top-performing sales rep isn’t just the resources you have to pour into hiring a new one—it’s lost deals, missed quotas, and longer ramp-up time. Why Inflexibility is a Business Killer One of the biggest challenges with legacy systems is their inability to scale and adapt to changing business needs. One executive described the frustration of working with a rigid system: "Our team has to pull a bunch of manual reports just to figure out why clawbacks happened. The impact? Reps believe they're being shortchanged, and once that trust is gone, it's hard to rebuild." It’s worth asking yourself: Have I built complex workarounds just to make my compensation system function? Have I accepted that these inefficiencies are just part of the job? For example, legacy systems often: 1. Struggle with Large Data Sets Legacy systems often fail to handle the sheer volume of CRM, HRIS, and transactional data required for accurate commission calculations. KPN, a leading telecommunications company, faced major challenges with its compensation system’s ability to process large amounts of data, leading to payment delays and inefficiencies. Their compensation system took up to 28 hours to process payments, requiring more than 20 people to manage the workload. Slow calculations led to payment delays, errors, and frustration for sales teams who couldn’t trust their payouts. 2. Require Extensive Manual Work In rigid systems, adjusting quotas, credits, or deal structures requires manual intervention. ServiceNow struggled with slow, manual quota adjustments that created unnecessary bottlenecks, making it harder to adapt to changing sales conditions. Every update required manual work, slowing down approvals and delaying sales plan rollouts, leaving reps uncertain about their earnings. 3. Lack Deep Analytics Legacy systems provide only basic descriptive data, making it difficult to analyze sales performance, identify trends, or pinpoint issues in compensation plans. Colt Technologies couldn't track or analyze how compensation changes impacted sales performance. Their outdated system required external IT consultants for even minor adjustments, delaying changes and limiting the insights needed to optimize sales incentives. The Path to a Smarter Compensation Solution Does any of this sound familiar? If so, know that it doesn’t have to be. It turns out that there is a better way. How do we know? Because we work directly with many of the world’s leading sales organizations. What do they do that’s different? Importantly, they don’t spend time wrestling with rigid compensation plans. They use flexible, automated systems that make it easy to adjust quotas, align incentives, and pay reps accurately. That means fewer disputes, less time spent fixing errors, and more confidence that compensation is driving the right sales behaviors. In fact, in our experience, organizations that adopt AI-powered, integrated SPM solutions see revenue uplifts of 4%–10%. A modern sales compensation platform should give you: Real-time transparency – Sales reps should have clear, immediate visibility into their earnings and adjustments. Automation and accuracy – Less manual work means fewer errors, faster payouts, and more time to focus on optimizing sales performance. Scalability and flexibility – Whether you’re adding new sellers, adjusting quotas mid-year, or updating incentive structures, your compensation system should handle changes quickly without hours of manual work. Predictive insights – AI-powered analytics should analyze sales territories to spot imbalances and make recommendations, mitigate risk by identifying sellers or customers at risk of churn, and spot flag under-resourced accounts before they become a problem. What Are You Actually Paying for Your Comp Software? An outdated compensation system may seem cost-effective on paper, but the hidden costs tell a different story. Lost revenue, wasted time, and manual work add up fast. Companies that aren’t using an integrated SPM solution struggle to adapt to market shifts, leading to delays in sales plan distribution and missed revenue opportunities, effectively leaving sales teams sidelined. Without a truly flexible system, every adjustment to quotas, territories, or incentives means spreadsheets, workarounds, and back-and-forth approvals. Reps wait for clarity, admins spend hours fixing errors, and forecasting becomes reactive instead of strategic. Is your sales compensation system holding you back? The right compensation system doesn’t just pay reps, it fuels growth. If yours isn’t doing that, it’s worth exploring a solution that keeps up with the evolving complexity of your sales organization. See how a modern compensation system can improve accuracy, efficiency, and revenue performance today.

As Chief Marketing Officer at Varicent, I frequently have the chance to speak with sales and revenue leaders about their challenges with existing planning and performance management solutions. A recent customer conversation crystallized what we hear when we talk to customers trying to use FP&A platforms for sales planning: the promise often falls short of reality. The True Cost of "Connected" Planning One of our new customers, a financial services company, recently shared their journey away from a well-known enterprise planning solution. Their story will likely resonate with many organizations: The organization had invested over $1 million in their previous solution, but the hidden costs were even greater. Specialized model builders were needed to implement every substantial change. What was positioned and sold as “connected planning” actually required extensive coding and API work to achieve basic integration. The promised agility never materialized. Common Warning Signs Are you experiencing any of these red flags with your current planning solution? 1. Specialized Skill Dependencies Every model change requires technical resources Simple updates take weeks due to reliance on expert model builders Knowledge is concentrated with a few key personnel, or is outsourced to experts 2. False Promises of Flexibility Setup requires extensive custom coding, as does ongoing maintenance. API integration is more complex than advertised Changes to business rules require IT involvement. This ends up restricting business decision-making to what is implementable in the tech stack. 3. Mounting Hidden Costs Ongoing technical training and certification Additional consulting fees for model changes Increasing headcount for system maintenance The Challenge of Using Finance Software for Sales Planning One of the obstacles to replacing legacy planning systems is their deep entrenchment within finance and operational planning processes. This can make it difficult to build out a robust sales planning operation, as the assumption is that doing so will disrupt other functions. The reality is that separating SPM models from FP&A models typically causes no pain to the business. In fact, it usually makes things easier! Even if Finance is a key stakeholder in the planning process and the business and financial targets are initially set by Finance, Sales planning is its own entity and function. Solutions like Varicent have successfully replaced legacy sales planning systems while keeping existing financial planning solutions in place. Systems integrators and solution providers with specialized sales planning practices have achieved this in as fast as a few months by leveraging automated tools to facilitate the process, combining technology with strategic change management to ensure a smooth transition. The Path to a Modern Sales Performance Management System While replacing an entrenched planning system can seem daunting, the benefits of modern SPM solutions are compelling: True business user empowerment, without coding Genuine no-code/low-code flexibility Purpose-built sales performance capabilities Reduced total cost of ownership Overcoming Implementation Challenges So how do successful teams manage this kind of migration? In my experience, teams that do this best tend to take special care when addressing these three areas: 1. Data Migration Most successful teams start with a clear data mapping strategy. During the transition, they maintain parallel systems, in case anything breaks. Finally, as they’re nearing the endpoint, they validate the accuracy of all historical data before committing to the new system. 2. Process Continuity Moving a whole team onto a new system can be daunting. The teams who do it best phase the implementation by component, to ensure nothing breaks along the way. They train all users comprehensively – admins and reps. Most importantly, they make sure commission payments remain uninterrupted throughout the transition. 3. Change Management Here the usual rules apply: Build internal champions across departments. Create a compelling vision for improvement. Document clear ROI metrics and gauge effectiveness according to them. Real Results Organizations that have made the switch report significant reduction in time spent on system maintenance, and faster implementation of compensation changes. We've seen significant decreases in technical resource requirements. On average, we've seen full ROI achieved within 18 months. Taking the First Step The journey to a truly flexible sales performance management system starts with an honest assessment of your current situation. Ask yourself: What percentage of your sellers are achieving quota today, and how effectively is the overall sales budget being utilized ? How much are we spending on specialized technical resources? What's the true cost of delayed changes to our sales plans? How quickly can we actually pivot when market much business agility are we sacrificing? Ready to explore what modern sales performance management could mean for your organization? Contact us to learn how other companies have successfully made the transition.

As a CMO, I frequently speak with sales and revenue leaders who share their frustrations with sales performance management (SPM) solutions. One recurring issue I hear is that legacy compensation systems simply can't scale with the evolving complexity of today's businesses. One CRO I recently spoke with summed it up perfectly: "Despite escalating issues to the vendor's CEO and bringing in a dedicated SWAT team, persistent challenges remain unresolved. The system lacks the flexibility to handle our compensation structure without requiring extensive workarounds." This scenario is far too common. Many sales organizations begin with basic compensation systems that work well at first, only to find themselves struggling when their needs evolve. What starts as a solution quickly becomes a constraint. Why Do Compensation Systems Fail at Scale? Over time, growing sales teams face challenges that many legacy SPM solutions simply aren't built to handle. These include: 1. Fragmented Tech Stacks Lead to Integration Nightmares Most legacy platforms weren’t built as a single, cohesive system. They’re often pieced together through cobbled-together acquisitions, resulting in disconnected tech stacks that don’t integrate well. For example, platforms that jerry-rig separately acquired tools for quota planning, forecasting, and compliance often experience: Limited data visibility across functions – Sales, finance, and leadership pull reports from different systems, leading to conflicting numbers and misaligned decisions. Manual interventions to bridge gaps – Ops teams spend hours exporting, cleaning, and reconciling data in spreadsheets just to ensure accurate payouts. Slow performance due to disconnected systems – Processing commissions can take days, delaying roll-out for incentive updates and frustrating sales teams. Without a unified system, sales ops and finance teams end up managing compensation in spreadsheets, manually adjusting numbers, and chasing down errors. Instead of focusing on strategy, they spend their time fixing mistakes. 2. Rigid Workflows That Struggle with Complex Sales Structures Legacy compensation solutions tend to rely on preset workflows and formulas, which can’t adapt to the dynamic needs of modern sales organizations. As businesses scale, these rigid structures create unnecessary complexity: Hierarchies across regions and product lines – Compensation plans struggle to account for varying commission structures, territories, and team overlays. Teams end up doing manual calculations just to confirm the system is correct. Extended approval processes – Sales leaders and finance teams are forced into lengthy, manual approval chains, delaying compensation adjustments. Quota adjustments based on fiscal year changes – Simple quota updates become multi-step IT projects, requiring consultants or workarounds to deal with market shifts. Companies with these challenges often find themselves trapped in a cycle of expensive customizations just to stay operational. If making a simple quota change requires multiple approvals, IT involvement, or external consultants, it’s a sign your system could be working against you. 3. High Total Cost of Ownership (TCO) Without Predictable ROI A recurring concern I hear from executives is the high ongoing costs of maintaining their current platform. One leader noted: "To administer needed changes, we’re spending anywhere from $40,000 to $100,000 annually—just to keep up with our evolving needs." Many legacy providers require expensive professional services engagements even for minor adjustments, leading to an unpredictable and often unsustainable total cost of ownership. 4. Clunky User Experience A system that looks great in a demo but slows your team down in practice isn’t a solution. t’s a problem. These systems make even simple administrative tasks complicated, frustrating users and slowing down productivity. Some common complaints include: Too many screens required for simple tasks like adding users Sales reps can’t get answers on their own. They’re constantly asking sales ops for updates on their earnings. IT is stuck handling simple updates. If your team is spending more time managing the system than benefiting from it, it’s probably not supporting your business. It’s just slowing you down. 5. Scalability Issues That Hinder Business Growth As your business grows, sales compensation gets more complex. More reps, new product lines, and expanded territories all require a system that scales with you. Too often, companies find their compensation platform falling behind, creating frustration, inefficiencies, and costly workarounds. I hear this from other executives all the time: Running reports takes forever. Your team can’t get the data they need because the system lags under the weight of your sales org. Comp plans become a tangled mess. What started as a simple structure now requires endless workarounds to handle different regions, roles, and commission models. Making adjustments feels impossible. A territory or quota change shouldn’t mean weeks of approvals, IT tickets, and consultant fees just to keep things running. If the points above feel familiar, you’re not alone! Many legacy systems struggle with these challenges, forcing businesses into a reactive compensation strategy, rather than the proactive stance they all want to take. What to Look for in a Scalable Incentive Compensation Solution By now, you’ve probably experienced some of these challenges firsthand. Maybe your team spends too much time fixing compensation errors. Maybe small changes take weeks when they should take minutes. Or maybe your sales reps are constantly asking, “Where can I see my commission details?” The good news is that a better system isn’t just possible. It’s available now. And it’s easy to implement! Here’s what to look for: Unified Data and Process Automation: A single, integrated platform that reduces complexity and ensures data integrity across functions. Your finance, sales, and operations teams should all be working from the same real-time data instead of chasing down numbers across disconnected systems. Configurable Workflows: A flexible approach that allows businesses to adapt without costly customizations. Adjusting compensation plans, quotas, and territories shouldn’t feel like a major project. A scalable system makes these changes simple. Clear, predictable costs. You shouldn’t need a separate budget just to maintain your compensation system. Look for a pricing model that doesn’t require ongoing professional services just to keep things running. Intuitive User Experience: Reps should be able to check their commissions easily. Sales ops should be able to adjust plans without needing outside help. If a system is frustrating to use, adoption will suffer. Enterprise-Grade Scalability: Your compensation system should keep up as your business grows. Whether you're expanding into new markets, adding more reps, or adjusting complex compensation plans, the system should handle it all smoothly without slowdowns or costly customizations. An Incentive Compensation System Built to Scale At some point, every growing company reaches this crossroads. Some continue pushing forward with workarounds, hoping their system can hold up a little longer. Others take a step back and ask, Is this still the right fit for where we’re headed? A scalable compensation system isn’t just about handling more reps or bigger datasets. It’s about giving your team the flexibility, visibility, and control they need to drive performance. The companies that get this right don’t just compensate sales teams efficiently. They create a foundation for long-term, predictable revenue growth. Don’t let your compensation system become a roadblock to success. Explore how a purpose-built solution can empower your sales teams and drive better business outcomes.