Magic Quadrant for Sales Performance
Management
Published: 28 March 2017 ID: G00316158
Analyst(s): Melissa A. Hilbert, Tad Travis
The SPM software market grew 5% in 2016 to an estimated $753 million.
Application leaders supporting sales should focus on sales incentive
compensation in the short term, but also support use cases for operations,
planning and corporate performance management in the midterm.
Strategic Planning Assumption
By 2020, 25% of organizations using a sales performance management (SPM) solution will optimize
the design and maintenance of their sales compensation plans using advanced analytics solutions
provided by their SPM vendor.
Market Denition/Description
Gartner's view of the sales performance management (SPM) market is focused on transformational
technologies or approaches delivering on the future needs of end users. With full understanding of
today's market and related trends, this Magic Quadrant research places a strong focus on the
market's future direction, and will help organizations plan accordingly.
SPM is a suite of operational and analytical functions that automate and unite back-ofce
operational sales processes. It is implemented to improve sales execution and operational
efciency. Capabilities include sales incentive compensation management (ICM), objective
management, quota management and planning, territory management and planning, advanced
analytics (benchmarking, predictive and ML/cognitive), and gamication.
SPM accelerates representatives' time to value by providing real-time visibility into pay and
performance as well as opportunity estimation, thus enabling more accurate forecasting. Estimation
of possible commissions increases representatives' motivation and increases close rates on
protable sales with well-designed compensation plans. SPM, bridged with CRM, raises the
execution results of companies' go-to-market efforts. It enables the execution of more-effective
compensation plans at the territory and eld representative levels. Other benets include:
■
Driving increased sales representative performance with alignment of compensation to
corporate goals and objectives.
■
More-accurate and timely commissions processing, reducing costly over/underpayments and
sales representative churn.
■
Increased transparency to compensation, reducing disputes.
■
Increased agility in compensation plan design and change, allowing greater exibility to respond
to market changes and competitive situations.
■
Increased competitive sales representative behavior through contests (SPIFs) and gamication.
The three core capabilities included with an SPM system are incentive compensation, territory
management and quota management. These core functions also link to "near-core" complementary
processes, such as quota and territory planning, objective management, and advanced analytics,
providing a single operational system.
This is a different market denition than the one Gartner used in the previous two versions of the
Magic Quadrant. Buyers should not do a one-for-one comparison of the previous two versions to
this Magic Quadrant (and indeed should always be cautious when directly comparing current and
previous versions of any Magic Quadrant — see "How Markets and Vendors Are Evaluated in
Gartner Magic Quadrants"). SPM buyers traditionally purchase an ICM solution rst with
consideration to territory and quota management. Gartner considers these the core functionalities
that are required for SPM. Near-core functionalities that are most often considered include territory
and quota planning, objectives management, gamication and increasingly advanced analytics. To
better address SPM buyers' needs, Gartner has removed sales training, sales coaching, onboarding
and appraisal capabilities from its SPM market denition. While tangential to SPM, these
functionalities are often purchased by different buyers than Gartner sees for SPM, and are generally
not considered and evaluated together in the same buying cycle.
For more information, see "Hype Cycle for CRM Sales, 2016."
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Magic Quadrant
Figure 1. Magic Quadrant for Sales Performance Management
Source: Gartner (March 2017)
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Vendor Strengths and Cautions
Anaplan
Anaplan has moved to the Leaders quadrant from the Challengers quadrant, showing strength in
both vision and execution. Anaplan has improved scalability, provides a strong alignment to the
buyer journey and has good sales execution. Its customer base comprises generally of Global 2000
and hypergrowth companies, and it maintains a strong year-over-year customer acquisition rate.
Anaplan offers three SPM applications on the Anaplan for Sales platform: incentive compensation,
territory and quota management, and planning. Anaplan's strength continues to be its unied
planning capabilities, which connects it more closely to strategic corporate performance
management and SPM integration. With its in-memory Hyperblock technology, Anaplan provides
shorter deployment times and speed in processing times compared to the other SaaS vendors in
this Magic Quadrant. In response to customer concerns about space allocations for sizing, Anaplan
introduced a new pricing methodology in 2016.
Strengths
■
Platform: Anaplan executes against a vision for aligning corporate strategy with planning and
execution. Anaplan's platform connects multiple models for ICM and planning while also
providing a marketplace for third parties to develop new applications.
■
Customer experience: Anaplan received relatively high scores from this year's Magic Quadrant
reference customers for customer experience and referenceability.
■
Product capability: Anaplan offers strong quota and territory planning functionality. Customers
cite that they experience exibility, scalability and ease of use with Anaplan, which results in a
comparatively attractive time to value for the system.
Cautions
■
Capabilities: Whereas most SPM buyers purchase incentive compensation rst, Anaplan's
clients typically purchase Anaplan for Sales to rst improve their territory and quota planning
processes. Anaplan has a comparatively lower adoption rate of customers using all three
applications concurrently for the core ICM, quota and territory management functionality.
Customers evaluating ICM primarily should consider this in the evaluation.
■
Product: Anaplan lacks some near-core SPM functionality, such as advanced analytics and
gamication that is common to the other leading SPM vendors. Customer references mentioned
that some calculation types are missing.
■
Sales execution/pricing: Reference customers cited issues with running into space issues and
limitations with model size. Large enterprise-level customers should bear this in mind in
evaluations.
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beqom
Beqom continues in the Challengers quadrant this year on the strength of its ICM and customer
experience. Headquartered in Switzerland with ofces in North America and Europe, beqom targets
only large enterprises in Europe and North America. It offers a single, SaaS-only SPM product, also
named beqom, that spans all of the major SPM capabilities. Beqom focuses the product on the
total compensation concept, which includes sales performance management as well as nonsales
groups that include base salary and bonuses. It can quickly process large transaction volumes and
handle complexity, and in 2015 introduced advanced analytics with benchmarking. Beqom has
strengthened and expanded its partnerships to include Deloitte and PwC. Beqom will need to
increase its SPM customer acquisition rate and improve marketing execution in order to move to
the Leaders quadrant.
Strengths
■
Product: Beqom provides vertical capabilities, including templates for telecommunications,
retail, nancial services and marketing that can be tailored for customers.
■
Capabilities: Beqom connects to HCM through its offering of total compensation management
to include total rewards, noncash/recognition, benets and long-term incentive management.
SPM buyers interested in more than variable incentive compensation should note this in
evaluations.
■
Customer experience: Reference customers noted that beqom has partnered with them for
success, as reected in the vendor's comparatively high scores for referenceablility and high
customer retention rates.
Cautions
■
Customer experience: North American-based implementations may require the use of a third
party to assist in the deployment. Customer references noted a lack of available resources
and/or expertise of beqom resources, which may be related to the location of resources.
■
Sales execution/pricing: In the past year beqom has acquired considerably fewer new clients
than other SPM vendors have, and has appeared on comparatively few buyer shortlists due to
its focus on larger enterprise prospects.
■
Capabilities: Beqom received reference customer scores that are average among all the
included SPM vendors for product capabilities regarding the incentive compensation, quota and
territory management functionality. Several reference customers cited issues with the
complexity of performing simulations.
CallidusCloud
CallidusCloud remains in the Leaders quadrant on the strength of its comprehensive Sales
Performance Management suite. CallidusCloud includes products for all core SPM functionality:
incentive compensation, territory management and quota management. It also includes
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complementary products for near-core functionality, such as gamication and planning, and more
advanced functionality in its predictive analytics offering. Additionally, CallidusCloud offers
connecting functionality to SPM, such as CPQ and LMS products. The mature product is well-
suited to complex compensation plan calculation and modeling, large-volume transaction
processing, and real-time reporting. CallidusCloud has introduced Telco Dealer Pro in addition to its
existing Producer Pro product to expand vertical offerings to the telecommunications industry, for a
comprehensive dealer management solution. In 2016 CallidusCloud continued to secure a
signicant number of new clients — many part of the Fortune 1000 — and continuing its strong
sales results from 2015.
Strengths
■
Innovation: CallidusCloud provides strong innovation, including a unied view of territory and
quota management across the business, as well as continued UI updates and integrations to
over 100 other systems out of the box.
■
Customer experience: Customers note that the system is stable with low maintenance. Plan
changes or adjustments are relatively easy to make, providing a quicker time-to-market
capability.
■
Product capabilities: Customers in the Magic Quadrant reference survey indicated that the
product is exible enough to allow for complex quota assignment and incentive compensation
plans.
Cautions
■
Customer experience: Implementation quality was noted as problematic by reference
customers in terms of design of the solution as well as resource location and turnover.
■
Platform: CallidusCloud lacks a marketplace strategy for third-party developers to develop
applications on top of its platform that could enhance it or provide additional offerings for
customers. Additionally, CallidusCloud lacks the same level of open APIs that other leading
SPM vendors have.
■
Product capabilities: CallidusCloud has not yet developed a mature set of planning capabilities
relative to other Magic Quadrant vendors, such as territory planning and consideration of
nancial planning and capacity planning.
IBM
IBM again is positioned in the Leaders quadrant, based upon strength of product vision and
functional capabilities. IBM offers incentive compensation, quota and territory management, as well
as SPM analytics. IBM offers multitenant SaaS, single-tenant SaaS and on-premises Incentive
Compensation Management (ICM) solutions, which makes it one of the few remaining SPM vendors
with an on-premises solution. IBM primarily sells to large enterprises. It offers strong functionality for
SPM planning, ICM crediting and analytics. When SPM is combined with the Planning Analytics
product or with IBM Watson Analytics (not included in the standard SPM offering), IBM offers
meaningful advanced analytics options, useful for planning and optimization processes. Planning
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Analytics connects it to strategic corporate performance management. In 2016 IBM released ICM
10.0 on a new SaaS infrastructure and released a new reporting product named Pulse.
Strengths
■
Product vision: IBM has one of the strongest product visions in the market, spanning
optimization, performance reporting, forecasting and advanced analytics.
■
Capabilities: IBM has deep SPM capabilities across core and near-core functionality. It has one
of the top solutions for handling large data volumes and managing complex crediting rules.
■
Pricing: Reference customers gave IBM strong scores for perception of value and pricing
exibility.
Cautions
■
Customer experience: IBM drew comparatively modest results for customer support and
postimplementation in the reference survey. Several reference customers noted issues getting
timely response from support, getting access to capability best practices or nding helpful
product documentation.
■
Market strategy: Compared to other Leaders in the Magic Quadrant, IBM has a more limited
customer segmentation strategy, focused on larger midmarket and enterprise organizations.
■
Implementation: Some reference customers cited concerns with the quality and effectiveness
of implementation partners. IBM drew comparatively average scores for ease of implementation
and implementation duration.
Incentives Solutions
Incentives Solutions moved into the Visionaries quadrant from the Niche Players quadrant, based
on product vision, vision for customer success and roadmap quality. Incentives Solutions is an
EMEA-based company with SPM capabilities suitable for midsize companies, and applicable for
both B2B and B2C selling. The vendor's primary SPM product is a SaaS SPM platform called
Joopy, but the company also offers an on-premises product. Its SPM offering makes Incentives
Solutions one of only three vendors in the market that offer benchmarked SPM metrics, useful for
setting quota and compensation levels against objective standards. In the past year, Incentives
Solutions announced a freemium offering, which is unique in the SPM market and will be attractive
for small or midsize businesses that are evaluating SPM providers.
Strengths
■
Geographic reach: Incentives Solutions is one of the few SPM vendors to build partnerships
with partners in Latin America, Eastern Europe and Africa.
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■
Market responsiveness: Incentives Solutions has one of the strongest product release
cadences, and one of the deepest number of new release components, of all the vendors in the
SPM market.
■
Customer experience: Reference customers gave Incentives Solutions very high marks for
customer satisfaction, customer support and ability to deliver enhancements that arise from
customer requests.
Cautions
■
Geographic reach: Incentives Solutions has yet to establish a signicant presence in North
America, both in terms of sales organization and partnerships.
■
Capabilities: Incentives Solutions received less-favorable scores from reference customers for
critical capabilities than the leaders in key SPM capabilities, particularly for incentive
compensation and workow.
■
Customer experience: Reference customers cited concerns with Incentives Solutions'
implementation duration and quality of implementation services, particularly with regard to
project management.
Nice
Nice remains a Challenger due to the breadth of its SPM offering, which covers all the SPM
capabilities, including incentive compensation, quota management, territory management,
objectives management and gamication. Nice sales efforts focus solely on enterprise
organizations. The vendor has strong ICM capabilities, driven by an in-memory calculation engine
that can handle the type of calculation volumes and crediting rules common to large enterprises
across multiple industries (e.g., banking, insurance, high tech, telecommunications, transportation).
Nice will be attractive to organizations that are looking to optimize sales operational processes such
as customized workow management. In 2016 Nice continued to acquire large enterprise
customers and improved implementation services. It must enhance its SPM offering to include
advanced analytics and improve territory and quota planning, as well as improve its sales and
marketing execution to improve its position in the Magic Quadrant.
Strengths
■
Market understanding: Nice offers an SPM system that is well-positioned to meet the needs of
business and IT leaders, Nice's target market. It has a scalable system that can manage very
large data volumes and complex compensation plans.
■
Implementation: Reference customers noted that Nice partners well during the deployment to
optimize success, providing good project management and stafng resources as well as
technical support.
■
Incentive compensation: Nice continues to deliver on its roadmap, including exible UI,
workow and performance improvements required to handle large volumes of data very quickly.
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Nice received relatively high scores from reference customers for its incentive compensation,
quota and territory management functionality.
Cautions
■
Implementation: A number of reference customers cited lengthy implementations, likely due to
enterprise deployments. This may lead to dissatisfaction regarding cost/value for their project.
■
Sales execution: Nice scored comparatively poorly for its sales and marketing execution. SPM-
specic messaging is not widely distributed across social media or other channels, and the
product appears on very few SPM buyer competitive shortlists. Coupled with its focus on very
large organizations, this is reected in Nice's relatively low acquisition rate of new customers
compared to those of other SPM vendors.
■
Customer experience: Reference customers noted the need for Nice development to engage
in various customer support issues, citing customer support skills level.
Optymyze
Optymyze has fortied its position in the Leaders quadrant on the strength of its product
improvement, market vision and SPM platform. The Optymyze product, Optymyze Sales
Operations, is offered as SaaS and has a full set of core and near-core SPM capabilities serving
multiple industries, including insurance, communications, banking, manufacturing, life sciences and
retail. Optymyze's primary value proposition is managed services for SPM, which are operational
services bundled into the software subscription cost, but Optymyze also offers this service for other
sales operations functions. The platform allows customers and third parties to develop applications,
many of which are available via the Optymyze App Gallery. In the past year, Optymyze has
strengthened its predictive capabilities, and customers can customize and access these as well as
other capabilities on mobile devices. The vendor also rearchitected its applications to support real-
time processing, which is important to buyers that value real-time analytics and modeling functions.
Strengths
■
Product platform: Optymyze provides a strong open platform for application/functionality
development by customers and third parties, and over 200 applications are available in the App
Gallery.
■
Customer experience: Reference customers provided comparatively high scores among all
included vendors in this Magic Quadrant for Optymyze's ease of deployment and customer
support.
■
Product: Optymyze offers a modern UI with material automation. Business users are able to
utilize the app studio to develop functionality specic for their organization, and Optymyze
received relatively high reference customer scores for overall ease of use of the product.
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Cautions
■
Market execution: While it improved slightly from 2015, Optymyze still lacks signicant social
media presence and thought leadership. This is reected in low appearances on vendor
evaluation shortlists of customers.
■
Customer experience: Optymyze reference customers cited some weakness around reporting
performance and limited functionality, as well as difculty creating complex congurations.
■
Product: Over 75% of Optymyze reference customers purchased and use the vendor's bundled
managed services for change management and operational services. Customers should
consider this when evaluating the skills necessary to maintain the solution or as resource relief
for the organization.
Oracle
Oracle retains its position in the Leaders quadrant, based on quality of sales execution, product
vision and market responsiveness. Customers can purchase Oracle Sales Cloud Enterprise and
Premium Editions, which include Oracle SPM. Oracle SPM is also sold separate from Oracle Sales
Cloud, and Oracle Incentive Compensation can be purchased separate from SPM. Oracle SPM
solutions offer prebuilt connectors to integrate with other enterprise solutions, such as Salesforce,
Siebel and PeopleSoft applications. Oracle prospects and clients should note that the vendor is
migrating some planning capabilities — notably Crystal Ball — to the Oracle Planning and
Budgeting Cloud Service (PBCS) system. Companies that are looking for SPM advanced planning
functions in addition to ICM will also have to consider purchasing Oracle PBCS as well.
Strengths
■
Sales execution: Oracle has again demonstrated strong SPM sales execution in the past year,
including greatly improving the number of ICM deals.
■
Product: Oracle has one of the leading visions for uniting SPM and corporate performance
management systems of all the vendors in this Magic Quadrant — a factor that is important to
companies that aim to improve their strategic planning processes.
■
Capabilities: Reference customers gave Oracle high marks for ICM product quality, citing the
exible plan set-up and crediting rule functions.
Cautions
■
Capabilities: Several reference customers expressed concerns using Oracle BI for SPM
reporting, noting difculties with creation and maintenance of complex reports.
■
Customer experience: Oracle SPM clients cited several concerns with the quality of training
materials and product documentation, which is an important consideration for buyers that need
to maintain complex SPM implementations.
■
Sales execution/pricing: Reference customers gave Oracle comparatively lower scores for
pricing and contract exibility and negotiation than other Leaders in the Magic Quadrant.
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SAP
SAP moves from the Challengers quadrant to the Niche Players quadrant. Gartner attributes the
movement primarily to the removal of talent management capabilities from the denition of the SPM
market, which had a considerable impact on SAP. SAP's SPM product vision, capabilities, customer
experience and sales execution are lower relative to the Leaders in this Magic Quadrant. SAP's
SPM functions are available in three different products: SAP Hybris Cloud for Sales and SAP CRM
have native territory management and quota management functions, and SAP Incentive
Compensation is a native, on-premises ICM product. SAP sells its SPM products only to its SAP
installed base and global enterprises targeting insurance. It maintains partnerships with Vistex and
Xactly for clients that seek SPM capabilities not provided by SAP Incentive Compensation.
Strengths
■
Capabilities: The territory management function in SAP Hybris Cloud for Sales can be
congured to assign leads, accounts and opportunities to territories. Records can also be
assigned to territory teams as well as account teams.
■
Marketing responsiveness: Reference customers pointed to the quality of help they received
from SAP presales and product development in sales cycles.
■
Capabilities: SAP CRM has a native territory simulation function that models the impact of
territory changes against key sales performance metrics. Users of SAP CRM can model quota
planning changes via a two-way Microsoft Excel plug-in.
Cautions
■
Product deployment: SAP Incentive Compensation is on-premises only, and is not integrated
with other SPM functions such as quota management or territory management.
■
Innovation: SAP's midterm roadmap for SPM is comparatively modest, limited to migrating
SAP Incentive Compensation to Hybris and implementing customer-requested enhancements.
In the past year, SAP has delivered fewer incentive compensation, quota management or
territory management improvements than the leading SPM vendors have.
■
Implementation: Reference customers scored SAP lower than most SPM vendors for
implementation satisfaction, noting several cautions about the implementation process.
Cautions included implementation duration, access to quality third-party implementers, and
hand-offs from sales to implementation teams.
Vistex
Vistex is again a Niche Player, based on the fact that its primary SPM product, SAP Incentive
Administration, is available only to SAP clients, and marketed and sold to those clients only via a
partnership agreement with SAP. SAP Incentive Administration by Vistex is an incentive
compensation, quota management and territory management system that installs in SAP ERP
software. It can be deployed on-premises, as single-tenant software managed by SAP or as SaaS
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managed by Vistex at its data centers. The quality of Vistex's product vision and sales execution
lags behind those of the other providers. In the past year, the vendor has updated SAP Incentive
Administration to the SAP Fiori user interface, and released a non-SAP SPM product as part of its
Vistex Go-to-Market Suite product.
Strengths
■
Product deployment: With three different deployment methods, Vistex offers exible options to
SAP clients. Vistex is committed to keeping all versions of the product at par, even if the Fiori
version offers newer product development options.
■
Integration: As an SAP Extension Partner, Vistex offers strong integrations to SAP ERP,
including nancial and payroll applications — a capability that was noted by several customer
references.
■
Market responsiveness: Vistex has a strong product release cadence. Each release includes a
signicant number of new components, and one of the deepest number of new release
components of all vendors in the SPM market.
Cautions
■
Product offering: The initial version of the SPM product in the Vistex Go-to-Market Suite was
released in November 2016. This should be a consideration for software buyers that prefer to
purchase mature technologies.
■
Customer experience: Several Vistex reference customers cited the need for better
implementation and maintenance documentation, such as conguration best practices or
product functionality help les.
■
Capabilities: Gartner notes that Vistex's incentive compensation, quota management and
territory management capabilities lag behind those of the leading vendors in the SPM market.
Similarly, reference customers noted cautions about incentive compensation capabilities.
Xactly
Xactly remains a Leader, based on its continued strength in terms of market focus, customer
satisfaction, sales execution and improved customer satisfaction from last year. Xactly Incent is a
pure-play SaaS SPM solution for midsize and large enterprises, offering ICM, quota management
and territory management capabilities, objectives, and gamication. Advanced analytics is also
available with its Insights product, sold separately. Xactly provides benchmarking based on
anonymized and aggregated SPM-specic data. It is one of three vendors to offer this, and has
done so for the last two years. It offers both enterprise (Incent Enterprise) and small business (Incent
Express) products. In the past year, Xactly has strengthened its partnership with Salesforce through
Lightning integration, and realigned its enterprise teams to serve specic industries. Xactly
continues its strong acquisition rate of new customers.
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Strengths
■
Market understanding: Xactly provides a very clear message and understanding for incentive
compensation, which resonates with SPM business buyers. Xactly utilizes multiple marketing
channels to provide thought leadership in the space.
■
Business model: Xactly focuses on the success of its customers, from sales through support.
Reference customers afrmed that Xactly partners with them for success.
■
Customer experience: Xactly maintains a strong cadence of product releases based on
customer feedback, and received the highest scores from reference customers regarding the
quality of releases as well as their ease of use.
Cautions
■
Product offering: Large or complex customers may nd issues with Xactly's structured data
model. Some potential customers noted that Xactly was eliminated due to integration and
complex plan requirements not being met.
■
Sales execution/pricing: All of Xactly's reference customers are using its incentive
compensation product. Xactly has low adoption and use of its quota and territory management
products in combination with incentive compensation.
■
Innovation: Xactly lacks strategy around quota and territory planning, utilizing partnerships with
third-party vendors, and does not offer a UI for data integration. Xactly has released mostly low-
level product improvements, with no new major functionality released.
Vendors Added and Dropped
We review and adjust our inclusion criteria for Magic Quadrants as markets change. As a result of
these adjustments, the mix of vendors in any Magic Quadrant may change over time. A vendor's
appearance in a Magic Quadrant one year and not the next does not necessarily indicate that we
have changed our opinion of that vendor. It may be a reection of a change in the market and,
therefore, changed evaluation criteria, or of a change of focus by that vendor.
Added
None
Dropped
Salesforce
Zoho
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Inclusion and Exclusion Criteria
The inclusion criteria represent the specic attributes that analysts believe are necessary for
inclusion in this research.
To qualify for inclusion, vendors need:
■
Overall corporate revenue from software sales to be at least 60% of revenue.
■
At least $8 million in sales from SPM software during the evaluation period.
■
At least 55% of SPM-specic revenue in the evaluation period to have come from software
sales.
■
To offer a native ICM product, plus at least one other SPM capability: territory management,
quota management, gamication or advanced analytics.
■
A product in GA for at least 12 months.
■
To have sold at least 20 net new named SPM accounts (new logos, independent of
reimplementations from previous versions of a product) in the last 12 months, where the buyers
purchased the SPM software to manage their own SPM operations, not as a managed service
function. The accounts each have at least 100 sales representatives (payees).
■
Demonstrated ability to handle transaction volumes greater than 500,000 line item records per
month
■
Demonstrated ability to sell to accounts with more than 100 sales representatives (payees)
■
To support a customer base of at least four different industries — for example, banking,
nancial services, retail, insurance, telecommunications, travel and transportation.
Honorary Mentions
Several vendors in the SPM market provide innovative or unique products, but did not meet the
revenue or technology criteria for inclusion in this year's Magic Quadrant. The following may be
worth considering:
■
Axtria
■
Iconixx
■
Obero
■
QCommission
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Evaluation Criteria
Ability to Execute
Gartner analysts evaluate providers on the quality and efcacy of the processes, systems, methods
or procedures that enable IT provider performance to be competitive, efcient and effective, as well
as to positively impact revenue, retention and reputation. Ultimately, providers are judged on their
ability and success in capitalizing on their vision.
Product or Service: SPM applications include capabilities for ICM, territory management,
objectives, quota management, planning, advanced analytics and gamication.
Different sales organizations require different levels of depth and complexity of capabilities. Vendors
that support a wide range of complexity have greater market potential and are rated accordingly.
This is a cross-industry Magic Quadrant; therefore, the evaluation of a provider's offering is focused
on the provider's ability to serve several distinct industry sectors, rather than on its ability to provide
industry-specic solutions.
In many cases, an SPM application will combine several functional components, some of which
require third-party vendors. A key evaluation criterion is how well the SPM vendor's application
integrates with third-party products and customer data sources. This is measured primarily by the
number and complexity of data and application integrations, as demonstrated by live customer
deployments. Vendors that have fostered an ecosystem of value-added application suppliers and
partners will rate well for this subcategory.
Overall Viability: Key aspects of this criterion are the vendor's ability to ensure continued vitality of
a product, including support for current and future releases, as well as a clear roadmap for the next
three years. The vendor must have the cash on hand and consistent revenue growth during four
quarters to fund employee burn rates and generate prots.
Sales Execution/Pricing: The vendor must provide global sales and distribution coverage that
aligns with its marketing messages.
Vendors will be evaluated based on measurable criteria, including but not limited to the number of
new customers acquired, average deal size and references' perception of value.
Market Responsiveness/Record: The vendor's ability to respond, change direction, be exible and
achieve competitive success as opportunities develop, competitors act, customer needs evolve and
market dynamics change.
Vendors will be evaluated based on the number of product releases, as well as the number and
quality of enhancements provided in those releases.
This criterion also considers the vendor's history of responsiveness to customers and to market
dynamics, including use of formal customer advisory programs.
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Marketing Execution: The clarity, quality, creativity and efcacy of programs designed to deliver
the organization's message in order to inuence the market, promote the brand and business,
increase awareness of the products, and establish a positive identication with the product/brand
and organization in the minds of buyers. This "mind share" can be driven by a combination of
publicity, promotional, thought leadership, word-of-mouth and sales activities. Vendors will be
evaluated based on their appearance on buyers' shortlists as well as their use of multiple marketing
channels to reach prospects.
Customer Experience: Feedback from active customers on generally available SPM releases
during the past 12 to 18 months is an important consideration. Sources of feedback include vendor-
supplied references, Gartner inquiries and other customer-facing interactions, such as Gartner
conferences. Customers' experiences are evaluated based on the vendor's ability to help customers
achieve positive business value, as well as sustained user adoption, quality, implementation and
ongoing support.
Operations: The ability of the organization to meet its goals and commitments. Factors include the
quality of the organizational structure, including skills, experiences, programs, systems and other
vehicles that enable the organization to operate effectively and efciently on an ongoing basis. For
SaaS offerings, Gartner will evaluate the vendor's ability to manage operational infrastructure
requirements and to provide postsales usage and adoption support.
Table 1. Ability to Execute Evaluation Criteria
Evaluation Criteria Weighting
Product or Service High
Overall Viability Medium
Sales Execution/Pricing Medium
Market Responsiveness/Record High
Marketing Execution Medium
Customer Experience High
Operations Medium
Source: Gartner (March 2017)
Completeness of Vision
Gartner analysts evaluate providers on their ability to convincingly articulate logical statements
about current and future market direction, innovation, customer needs, and competitive forces, as
well as how well they map to the Gartner position. Ultimately, providers are rated on their
understanding of how market forces can be exploited to create opportunity for themselves.
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Market Understanding: The vendor's ability to understand buyers' needs and translate them into
products and services for the SPM market. Vendors that show the highest degree of vision listen
and respond to buyers' current demands with consistent product enhancements. They also have a
clearly dened product roadmap. Vendors demonstrate a strategic understanding of SPM capability
trends, including operational efciencies, planning processes and go-to-market strategic alignment.
In addition, the vendor demonstrates an understanding of SPM positioning with buyers' overall
CRM, SFA and ERP strategies.
Marketing Strategy: A clear, differentiated set of SPM messages consistently communicated
throughout the organization, externalized through the website, advertising, customer programs and
positioning.
Vendors will be evaluated on their customer segmentation strategies and their ability to
communicate to those segments. Vendors will also be evaluated on their thought-leadership
programs and vision for customer success.
Sales Strategy: The strategy for selling SPM solutions that uses the appropriate network of direct
and indirect sales, marketing, service and communication afliates that extend the scope and depth
of market reach, skills, expertise, technologies, services and the customer base.
Vendors will be evaluated based on their vision for employing direct sales teams, resellers, system
integrators and ISV companies. Vendors will also be evaluated on their ability to sell to operational
leaders, business leaders and IT leaders.
Offering (Product) Strategy: Vendors demonstrate a vision for SPM capabilities that crosses the
breadth and depth of the SPM market; this is critical for meeting the needs of a maturing market.
The product strategy can be a combination of organic development, acquisition and/or ecosystems.
However, for ecosystems, Gartner pays close attention to the quality and support of third-party
vendors.
Gartner will evaluate product vision for core SPM capabilities: sales incentive compensation, quota
management and territory management. Vendors will also be evaluated for near-core SPM
capabilities: objectives management, planning, advanced analytics, gamication, platform
capabilities, mobile capabilities and third-party application marketplaces.
Business Model: Vendors have a clear business plan for how they will be successful in the SPM
market. These business plans should include appropriate levels of investment to achieve protability
and healthy revenue growth during a three- to ve-year period. Sales channel and partnership
strategies are important considerations in this criterion.
Vertical/Industry Strategy: The vendor's strategy to direct resources, skills and offerings to meet
the specic needs of individual market segments, including verticals.
Innovation: Vendors demonstrate a commitment to investment in new SPM areas, such as
planning, advanced analytics and complementary process extensions.
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Geographic Strategy: The vendor's alignment of resources, skills and offerings to meet the specic
needs of geographies outside the "home" or native geography, either directly or through partners,
channels and subsidiaries, as appropriate for that geography and market.
Table 2. Completeness of Vision Evaluation Criteria
Evaluation Criteria Weighting
Market Understanding High
Marketing Strategy Medium
Sales Strategy Medium
Offering (Product) Strategy High
Business Model Medium
Vertical/Industry Strategy Low
Innovation High
Geographic Strategy Medium
Source: Gartner (March 2017)
Quadrant Descriptions
Leaders
Leaders demonstrate a market-dening vision of how technology can help top business executives
achieve business objectives. Leaders have the ability to execute against that vision through
products, services and demonstrated solid business results, in the form of revenue and earnings.
Leaders have signicant successful customer deployments in North America, which demonstrates
the largest volume of SPM deployments globally (with EMEA and other regions gaining traction), in a
wide variety of industries and with proofs of organizational deployments above 500 users. Leaders
are often what other providers in the market measure themselves against.
Challengers
Challengers are often larger than most (but not all) Niche Players, and demonstrate a higher volume
of new business for SPM. These vendors have the size to compete worldwide, but in some cases
may not be able to execute equally well in all geographies. They understand the evolving needs of a
sales organization, but may not lead customers into new functional areas with their strong functional
vision. Challengers tend to have a good technological vision for architecture and other IT
organizational considerations, but have not won the hearts and minds of top sales executives
and/or IT leaders.
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Visionaries
Visionaries are ahead of most competitors in delivering innovative products and/or delivery models.
They anticipate emerging and changing sales needs, and move the market into new areas. They
inuence the direction of the SPM market, but are limited in terms of sales execution, operational
execution or consistent record of customer success.
Niche Players
Niche Players offer products for SPM functionality, but may lack some functional components,
strong business execution in the SPM market on a large scale, or demonstrable ability to
consistently handle deployments of more than 500 users across multiple geographies. Niche
Players may offer portfolios for a specic industry or specic software ecosystem. They
demonstrate weaknesses in one or more important areas with regard to supporting cross-industry
requirements, such as product functionality for core SPM, and may include decits regarding
planning, advanced analytics or objectives/gamication. Despite these shortcomings, Niche Players
often offer the best solutions to meet the needs of particular sales organizations, industries or
organizational sizes, in view of the price/value ratio of their solutions.
Context
This Magic Quadrant covers a wide cross-section of vendors, including those that offer different
delivery models (e.g., on-premises, hosted and SaaS), and differing levels of functional breadth and
sophistication. Whichever provider you are considering, ask yourself:
"Will this vendor help my sales organization sell more effectively?"
"Will my sales compensation team become more efficient and effective using the tools the vendor
provides?"
In many cases, a sales organization must evaluate not just a vendor's suite of product offerings, but
also the ecosystem of providers that can ll the gaps in that vendor's capabilities.
Use this Magic Quadrant as one point of reference for your evaluations. It is not intended to be the
sole tool for creating a vendor shortlist. Use it as part of your due diligence and in conjunction with
discussions with Gartner analysts. It is important to explore the market further to assess the
capacity of each vendor to address your unique business problems and technical concerns.
Depending on the complexity and scale of your requirements, your shortlist may be unique.
For this Magic Quadrant, Gartner collected end-user data from two sources: interactions with
Gartner clients and the results of a primary research survey conducted specically for this Magic
Quadrant. The survey had 92 respondents, drawn from end-user clients identied by the software
vendors included in this analysis. In addition, data was collected from vendor interactions, including
conferences, briengs and advisory sessions, as well as from interactions with other Gartner
analysts for related technology and application insights, along with the author's own analysis.
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Note: Magic Quadrants are snapshots in time. To be fair and complete in its analysis, Gartner stops
collecting data for Magic Quadrants at a consistent time. For this Magic Quadrant, the cutoff date
was November 2016.
Market Overview
The SPM market continued to mature in 2016, growing to an estimated $753 million in software
revenue. The growth rate is lower than those of the previous two years, but this does not indicate
that interest in the SPM market is waning — it reects the changed market denition provided in the
Market Direction/Denition section of this document.
A Gartner primary research survey, conducted for this 2016 Magic Quadrant, of 92 reference
customers that were using at least one SPM component found that:
■
89% were using ICM capabilities
■
23% were using quota management and planning capabilities
■
20% were using SPM advanced analytics
■
16% were using territory management capabilities
■
10% were using objectives management capabilities
■
3% were using gamication
These percentages represent considerable departure from the results of the 2015 survey. For
example, the percentage of respondents claiming to use incentive compensation grew from 73% in
2015 to 89% in 2016. Adoption of territory management, however, dropped from 38% in 2015 to
16% in 2016.
SPM buyers should not read too much into these results. Because the Magic Quadrant process
does not survey a static set of respondents year by year, these results do not constitute a statistical
trend. More importantly, the types of respondents in the 2016 survey were considerably different.
Because this 2016 SPM Magic Quadrant includes only vendors that offer incentive compensation,
the survey excluded clients of Salesforce and Zoho that were included in 2015. This necessarily
reduced the number of respondents using quota and territory management, and increased the
percentage of those using incentive compensation.
As has been the case in previous years, software buyers are predominantly concerned about a
vendor's ability to handle large data volumes and manage increasing business process complexity.
Of all respondents, 58% said that performance and scalability was an "extremely important"
software selection consideration, making it the second highest scoring consideration.
There was a surprise in this year's survey results. The most cited reason for selecting a specic
SPM vendor was "understanding of my organization's business needs" — the rst time that this
reason has ranked so highly in the SPM survey. This result does match Gartner's experience with
Gartner clients, but it also highlights an important gap in the SPM market. In the Magic Quadrant
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survey, many respondents, across most of the vendors, expressed concerns that their vendors were
not providing good best practices and good product documentation. This means that SPM vendors
may be good at winning clients during presales, but are failing to deliver upon those expectations
during and after implementation.
Analytics is an important component of SPM, but buyers will nd more similarities than differences
across vendors. Most analytics offerings are reporting and dashboard systems that are suitable for
building custom reports. Some vendors are working on advanced analytics, in the form of
benchmarking, predictive and prescriptive analytics, as well as optimization — but that was the
case last year too. Gartner expects that it will be at least two years before most SPM vendors offer
mature advanced analytics.
Gartner changed the denition of SPM in 2016, dropping talent management functions to better
focus on the SPM capabilities most important to buyers. Based on analysis of client inquiries and
vendor feedback, Gartner has long estimated that less than 5% of all companies using at least one
SPM solution have implemented the full set of SPM functionality. Gartner will continue to cover
sales training, coaching and appraisals, but they will be covered as part of sales enablement
research.
Gartner nds that vendors' incentive compensation capabilities, particularly for rule denition and
crediting, are maturing rapidly. This means that the core ICM capabilities are approaching
commodity status.
Gartner expects the market to become increasingly data intensive, replacing the process-intensive
focus that has predominated so far. Soon, companies will be able to capture and analyze accurate,
rich data about representative behavior, taking an operational view of all their sales processes. The
time is approaching when sales operations will be able to monitor sales activity with the same detail
as manufacturing processes. By applying emerging advanced analytical capabilities such as big
data, machine learning and predictive analytics, companies will be more able to estimate outcomes
and thereby make immediate, fact-based adjustments to their sales execution, incentive
compensation and go-to-market plans.
Buyers are advised to consider using an experienced ICM implementer or plan design consultant,
particularly if implementing SPM software for the rst time and without mature ICM processes.
Leading implementers include Accenture, Canidium, Deloitte, IBM Global Business Services and
OpenSymmetry. Leading advisory rms include Willis Towers Watson, Aon Hewitt, ZS Associates
and Alexander Group.
Lastly, Gartner notes that SPM has an emerging role in forecasting and planning. Gartner has
spoken with many companies that want to improve their planning processes. Before the start of the
scal year, they need ways to link nance's revenue plans with territory alignments, quote
assignments and compensation plans. During the scal year, they need tools and processes that
keep their plans synchronized with their frequently changing sales forecasts.
Gartner believes that SPM has an important role in this process because it provides information that
bridges sales planning and sales execution. In fact, Gartner evaluated all vendors in this year's
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research for the Magic Quadrant and Critical Capabilities against these needs. However, as with all
integrated planning solutions, aspects of governance such as model sharing, data integration and
analytics should be managed formally.
Acronym Key and Glossary Terms
CPM
corporate performance management
CRM
customer relationship management
HCM
human capital management
ICM
incentive compensation management
ML
machine learning
SFA
sales force automation
SPIF
special performance incentive fund
Gartner Recommended Reading
Some documents may not be available as part of your current Gartner subscription.
"Hype Cycle for CRM Sales, 2016"
"Predicts 2017: CRM Sales"
"Magic Quadrant for Strategic Corporate Performance Management Solutions"
"How Markets and Vendors Are Evaluated in Gartner Magic Quadrants"
Evidence
Gartner collected input from several hundred reference customers (who had been identied by the
vendors) using a formal online survey, as well as from inquiries from Gartner clients evaluating the
vendors' products. We also interviewed vendors and attended product demonstrations.
Evaluation Criteria
Denitions
Ability to Execute
Product/Service: Core goods and services offered by the vendor for the dened
market. This includes current product/service capabilities, quality, feature sets, skills
and so on, whether offered natively or through OEM agreements/partnerships as
dened in the market denition and detailed in the subcriteria.
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Overall Viability: Viability includes an assessment of the overall organization's nancial
health, the nancial and practical success of the business unit, and the likelihood that
the individual business unit will continue investing in the product, will continue offering
the product and will advance the state of the art within the organization's portfolio of
products.
Sales Execution/Pricing: The vendor's capabilities in all presales activities and the
structure that supports them. This includes deal management, pricing and negotiation,
presales support, and the overall effectiveness of the sales channel.
Market Responsiveness/Record: Ability to respond, change direction, be exible and
achieve competitive success as opportunities develop, competitors act, customer
needs evolve and market dynamics change. This criterion also considers the vendor's
history of responsiveness.
Marketing Execution: The clarity, quality, creativity and efcacy of programs designed
to deliver the organization's message to inuence the market, promote the brand and
business, increase awareness of the products, and establish a positive identication
with the product/brand and organization in the minds of buyers. This "mind share" can
be driven by a combination of publicity, promotional initiatives, thought leadership,
word of mouth and sales activities.
Customer Experience: Relationships, products and services/programs that enable
clients to be successful with the products evaluated. Specically, this includes the ways
customers receive technical support or account support. This can also include ancillary
tools, customer support programs (and the quality thereof), availability of user groups,
service-level agreements and so on.
Operations: The ability of the organization to meet its goals and commitments. Factors
include the quality of the organizational structure, including skills, experiences,
programs, systems and other vehicles that enable the organization to operate
effectively and efciently on an ongoing basis.
Completeness of Vision
Market Understanding: Ability of the vendor to understand buyers' wants and needs
and to translate those into products and services. Vendors that show the highest
degree of vision listen to and understand buyers' wants and needs, and can shape or
enhance those with their added vision.
Marketing Strategy: A clear, differentiated set of messages consistently communicated
throughout the organization and externalized through the website, advertising,
customer programs and positioning statements.
Sales Strategy: The strategy for selling products that uses the appropriate network of
direct and indirect sales, marketing, service, and communication afliates that extend
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the scope and depth of market reach, skills, expertise, technologies, services and the
customer base.
Offering (Product) Strategy: The vendor's approach to product development and
delivery that emphasizes differentiation, functionality, methodology and feature sets as
they map to current and future requirements.
Business Model: The soundness and logic of the vendor's underlying business
proposition.
Vertical/Industry Strategy: The vendor's strategy to direct resources, skills and
offerings to meet the specic needs of individual market segments, including vertical
markets.
Innovation: Direct, related, complementary and synergistic layouts of resources,
expertise or capital for investment, consolidation, defensive or pre-emptive purposes.
Geographic Strategy: The vendor's strategy to direct resources, skills and offerings to
meet the specic needs of geographies outside the "home" or native geography, either
directly or through partners, channels and subsidiaries as appropriate for that
geography and market.
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