Strategic Importance of Sales Compensation Planning Revealed In Aberdeen Group Research Sponsored by Makana Solutions

Business Wire, Jan 7, 2008

Report Recommends That Organizations Automate and Streamline Sales Compensation Planning

LEXINGTON, Mass. -- Makana Solutions, developer of on-demand software for sales compensation design, today announced the availability of an Aberdeen Group research report that underscores the strategic importance of effective sales compensation planning. Sponsored by Makana Solutions, the report, entitled "Sales Compensation Management: Coin-Operated Productivity," is available at http://www.aberdeen.com/link/sponsor.asp?spid=30411006&cid=4562.

Aberdeen Group surveyed more than 130 companies to identify the strategies, capabilities, and enablers that best-in-class firms are using to improve sales productivity and to effectively manage compensation plan design and administration. The research showed that the pressure to increase market share is driving top organizations to focus resources on increasing sales productivity through improvements in compensation management, and that a key success factor was organizations' ability to align plans with strategic goals.

"Aberdeen's findings support Makana Solutions' belief that effective sales compensation planning is critical to ensuring that sales activities support corporate strategy," said Elizabeth Cobb, chairman and CEO of Makana Solutions. "Yet surprisingly most companies do not have visibility into how their comp plans work together. There is such strong interest in Makana Motivator(SM) because our unique presentation of the incentives for each job role makes it easy for executives to understand the connection between strategy and motivation."

"Organizations are pressured by increasingly complex compensation plans, and best-in-class performers are adopting automated plan design to keep variables in check and ensure a smooth roll-out process," said Gretchen Duhaime, senior research analyst, Aberdeen Group. "Our research shows that the planning process is strategically important. We recommend that companies automate their compensation plan design."

Best-in-Class Organizations Automate Sales Compensation Plan Design

The Aberdeen Group research shows that 100 percent of best-in-class organizations--that is, the top 20 percent of aggregate performance scorers--have a compensation plan design initiative in place, demonstrating that top performers recognize the strategic importance of automating the sales comp planning process. In fact, Aberdeen identifies streamlining compensation plan design as one of three recommended "steps to success."

Best-in-class organizations have implemented organizational processes that support compensation management technology adoption, and fully 90 percent have improved plan alignment with strategic goals, year over year. The report states that compensation plans should be optimized for organizations' business drivers, and 80 percent of best-in-class organizations strive to align performance targets with business goals.

"Makana Motivator is the only automation solution that lets comp designers view plan components side by side, model the costs without a detailed implementation, and automatically generate plan documents," said Elizabeth Cobb.

Automation of Sales Comp Planning On the Rise

The Aberdeen report noted that, although only one-third of best-in-class performers included in the study currently use a compensation plan design solution, 44 percent more plan on implementing such a planning solution within 12 months. Additionally, 85 percent of best-in-class performers plan to integrate plan document workflow into their compensation management solution, automating the task of distributing plans and collecting approvals for every individual employee.

About the Companies

Aberdeen Group, a Harte-Hanks Company, is a leading provider of fact-based research and market intelligence that delivers demonstrable results. Having benchmarked more than 30,000 companies in the past two years, Aberdeen is uniquely positioned to educate users to action: driving market awareness, creating demand, enabling sales, and delivering meaningful return-on-investment analysis. For more information, visit http://www.aberdeen.com.

Makana Solutions' on-demand software helps companies design, model, and communicate sales compensation. Effective sales incentive plans support company goals and help teams pull together to achieve them. Makana Motivator is the industry's first on-demand solution designed specifically for effective sales compensation planning. For more information, or to test drive or subscribe to Makana Motivator, visit www.makanasolutions.com.