Enhanced Resource Planning: Integrating ERP with Sales Compensation Management Systems (SCMS)

You’re familiar with operating systems (OS) and applications — an OS like Microsoft Windows allows you to use your computer to access software applications, such as Word, Excel, or PowerPoint. It’s an efficient setup for home, personal, and even small business use.

But enterprise organizations need more. For companies of significant size, a network of computers connected via servers allows everyone in the business to access any available applications. These applications are known as enterprise software. Business enterprise systems all have a common use: They make managing information easier by integrating it throughout the organization and keeping it available in a single place.

Enterprise resource planning (ERP)

Enterprise resource planning (ERP) platforms package software into bundles of applications commonly used together, make them accessible to all licensed users, and can be updated with new software modules as needed. ERP systems consolidate information from every department in an organization, so that information can be shared to coordinate information, services, and operations activity.

Consider how a sale might move through an ERP system. A new client’s information is entered in the sales module, verified through the accounting module, and accessed via an inventory module to confirm item availability. The same inventory management application might go on to order replacement stock. A production module then notifies the production branch when stock is running low. An order tracking module tracks the customer’s order as it is packed, shipped, and delivered — thus completing the client transaction.

With this overview in mind, consider these benefits of ERP systems:

• Order integration. As orders are placed, information becomes available to all departments, including production, warehousing, accounting, and distribution.
• Customer data analysis. Customer relationship management (CRM) software integrated with an ERP platform can log all customer interactions, which allows your sales reps to serve each customer according to their specific needs.
• Standardized manufacturing. With an ERP system, large organizations with different business units can standardize and automate production processes for increased productivity and reduced labor costs.
• Standardized HR. ERP systems allow each employee to manage their personal information, such as expenses, schedule changes, and updates to their professional certifications.

Sales compensation management

A sales compensation management solution (SCMS) is a comprehensive platform for handling sales team incentive, commission, and compensation plans. An SCMS automates calculation and administration of comp plans based on customizable rules, such as sale type or employee role. It provides sales representatives and leaders with detailed information about past earnings, trends, and revenue forecasts.

Because it is less time-consuming and error-prone, an SCMS platform improves the efficiency and accuracy of sales, accounting, finance, and administration teams. An SCMS offers your business numerous benefits, including:

• Accuracy. Cloud integration connects disparate systems and aggregates data for consistent data integrity.
• Efficiency. Data resources are stored in one place to keep all relevant information accessible across business functions.
• Improved decision-making. Integrating all sales data points into a single source allows for consistent reliable insights, accurate compensation payouts, and user-friendly tools to help teams stay focused, motivated, and up to date.
• Risk mitigation. Improved quality control measures protect and standardize business processes across all levels of your organization.
• Increased motivation. Sales reps can easily track and navigate the app, view their updated comp plan earnings, and improve performance with increased transparency.

Better together

ERP systems can fulfill the needs of several departments, including accounting and inventory control, but they aren’t designed to manage and implement sales compensation strategies. So, sales compensation plans are often handled via spreadsheet and other types of external BI tools— separate from sales performance data — a cumbersome process prone to human error and verification delays.

But integrating your ERP with an SCMS platform maximizes your company’s data accuracy, business efficiency, and financial control. A comprehensive SCMS expands your data picture with an entirely new level of shared information. When your sales team records an order, the data is immediately available to team members and leaders via your SCMS. Compensation plans can be easily adjusted based on updated performance numbers, and integrated data from all departments is available for generating reports, validating commissions, and viewing performance and sales metrics.

ERP systems provide enormous benefits for your entire organization. The addition of SalesVista’s SCMS incorporates incentive and commission planning with rules-based automation and calculation, which makes it easy for sales, finance, and accounting teams to plan, validate, adjust, pay out, track, and measure sales team compensation and performance. Enhanced accuracy, efficiency, and control provide your teams with the transparency and motivation they need for a better employee experience.