 Live from the Hilton at Bonnet Creek, Orlando, Florida, extracting the signal from the noise, it's theCUBE, covering Vision 2015. Brought to you by IBM. And now your hosts, Dave Vellante and Jeff Frick. Welcome back to IBM Vision, everybody. This is Dave Vellante with Jeff Frick. This is theCUBE. We go out to the events. We extract the signal from the noise. Alan Chapman is here as the director of sales performance management at IBM. Alan, welcome to theCUBE. Great, thanks. Great to be here. So, sales performance management. I thought it was low base, high commission. Is it more complicated than that? Own your touch, own your touch. I mean, you've got the basic concepts that you're in the right area, that's for sure. So, IBM has been making moves in the space. Acquisition of Veracent in 2012 complemented what started all, we're talking off camera Cognos, which is where you came to IBM. That's right. From, and then all kinds of other assets in the governance, risk, compliance, the whole business intelligence space and now sales performance management. So, tell us the story. Well, I mean, the great connection point here is, the vision is that the capabilities that's locked inside the data, inside the solution like ICM. When you put that alongside all the analytics platforms that we've invested heavily in, it's a great solution to bring that together, release what's there. And now we've got Watson analytics on top of that. We're seeing some great results from customers who can actually dive into their sales compensation and understand whether their compensation plans are really doing what they should be doing. Is that low base, high leverage, the right thing in every case? So that's, they're the questions we're helping clients answer through this. Yeah, so a couple of things there. One is the industry generally has been a sort of rear view mirror looking industry. Folks talked about that in the general sessions. Watson analytics brings a predictive nature to the business. Can you talk about that a little bit? Yeah, I can. So you're right. For a long time, customers are on this evolution, this curve of getting the basics in place with ICM really laying down a process and understanding. And now they've, many of our customers have got there. They've implemented the ICM solution. So now they get to look forward. And Watson allows them to not just do sort of drill down and slice and dice in the way we used to do with analytics, but actually to spot patterns, to spot things that are happening that you wouldn't ask the questions about in the first place. So it's very powerful, very powerful tool. So how do, take us through how a client might utilize that. I mean, so can they be proactive? Can they make offers? Can they adjust sort of territories? How in practical terms would somebody put that to use? Yeah, exactly those things. So for example, if you have a sales manager who's in ICM, he's got a set of data for compensation that he wants to do some analysis of. He clicks a button. It takes him into Watson. Watson comes up and presents some options as to how he can look at the data. From there, he can move around. It will present him with patterns that he can spot what's actually happening and make some insights into data that he didn't think to look for. He can then feed that back into his compensation plan design so he can adjust some of his rates. He can change some of his territories, whatever those insights were. And it's part of the beauty of analytics and it always has been, right? You're going to discover things that you didn't know were there. And we're taking that a level further now. So how should people think about this sort of life cycle? I remember back in the day, it was all right, we're going to put sales people on every NFL city in the United States. Okay, that's our, that's the degree to which we're going to analyze this, the total available market. How would you go about sort of sizing the opportunity in today's world? Send the opportunity from a- From a TAM standpoint. So one of the challenges that a sales organization has is where should I put my salespeople? How big is the market? How do I analyze that? Yeah, and again, through looking at that data, we're able to absolutely solve that problem. But of course it's much more complex than just direct sales teams these days, right? Some of the clients that we're working with have massive distribution structures. You know, if you look at insurance industry, they've got multi-country implementations, they've got internal sellers, external sellers, distribution, that's very complex. And so the first thing is to help them solve all those problems and get that process in place, lay the technology down that helps them do that. And we've got a new offering there as well, specifically in insurance, which is producer and life cycle, credential management, so it's a complex space to make sure that people are getting paid what they should be getting paid and making sure that you're not paying the wrong people, otherwise you get fined from the regulators, lots of complexity around that. That's a great example, insurance, because you've got agents, you've got these producers, you don't really know where they're coming from, you've got channel conflicts. So how does IBM help resolve all that? I mean, obviously through technology, but maybe you can maybe double click on that a little bit. Yeah, absolutely. The technology that we've got allows the insurance companies to actually lay out their distribution models in this tool. It allows them to handle onboarding, all the complications that happen around the certifications, the training that those partners have to have, getting the onboarding kits, all those things are handled by this software, which ultimately feeds and connects back to our core incentive comp program, which then says, yes, you can pay this person, you know, or not, or whatever the other details are. And it handles all the complexities in the US, for example, of the differences state by state, allowing a much simpler view of the actual insurance company around how they handle its distribution. Now, we were joking earlier about the low base, high commission, and you implied it's not always the best situation. So what can you share with us in terms of learnings from the client base broadly, where, for example, that might not be the best situation? Yeah, it's fascinating. When we work with clients and they start to really get some insights in this data, they've had, a lot of companies that have compensation plans in place for a long period of time, and they've made a lot of assumptions about how they work and how they operate. And what they're starting to spot is that, those assumptions aren't always true. You know, they actually see that some of the caps, maybe, that they put in place aren't giving them the behavior they expect. So making some small tweaks to those things can really make a difference. If you take that down to the level of a seller, having access to some of the tools that we're putting out there today, so we've got a new mobile solution that's going to be out later this year around that's going to give the sellers direct access. You know, this is a tool that they can pull up, look at, see how their compensation plan's going, and you know, that will influence their behavior, their decision as they walk into that next meeting. So you know, plays on both ends of the spectrum. So there are examples where the assumptions are just completely wrong that you could share once they've got behind the data, or is it more kind of validating things that you think and then there's really small tweaks is what most of the management has actually accomplished. It's both actually. So we're seeing some customers who, for some small tweaks in the way that they lay down, like I said, the caps or the specific rates that they want to look at, but also the territories that they align to. So you know, how have we got a specific territory shaped? We've got an experienced seller here. Is it experience that always makes the difference? Is it a combination of factors? Is it experience and the territory that we put them in and the size of the market opportunity that's there? So all these correlations, you know, we're good at looking like a one factor up until now, but some of the new predictive stuff allows us to tie all those together and look at multiple factors to make these decisions and it lets them make those calls. But it's not software development. They can't just keep going out and tweaking, tweaking, tweaking, right? There's got to be a human element. You've got to deal with customer relationships and it's got to be a little bit more of a slow roll, I would imagine, with some of these tweaks. Or is it more around the cop and more about the way that that is designed to drive behavior? Again, both things. So one of the things that we know when we look at our most successful customers is that they understand the human aspect of the selling process. It's not just about the process. It's not just about compensation plans. It's all about how they interact with their sellers and their sellers interact with their clients. So they absolutely get that. And so they can bring those changes in an appropriate speed. Some customers that do this very quickly, they make changes to their plans much more frequently. Their sales team used to doing this. I just met with one customer this morning who was talking about the fact that their key focus is cross-selling. And so they adjust rates on a very frequent basis to encourage that cross-selling behavior within their teams. Alan, what's the relationship between the sort of classical CRM and the sales performance management piece that you're involved in? Can you talk about those sort of dots? Yeah, absolutely. I mean, the classical CRM is a call way of collecting that basic information and allowing the sales guys to capture where they're after, have details about their customers and insights. And there's a level of additional value that then gets added on from both incentive compensation management but also other areas of the sales performance management umbrella. So sales performance management being a sort of broader term that encompasses both helping them forecast more accurately, ultimately helping drive the top line revenue growth. So one of the challenges that I've seen organizations, in particular, you see this with certain public companies that they face, they're growing and they need to adjust the sales force, the territories periodically. You don't want to do it every, certainly every quarter, you don't want to do it every year if you don't have to. But every couple of years you got to shuffle the deck. And what'll happen is invariably in the fourth quarter they'll let people know, hey, in Q1 we're going to change things. And so the sales force will go like crazy to try to close as much business as possible in Q4 and then Q1 becomes this exercise and sort of readjusting things. And they'll look back and they'll say, well, they'll use that as an excuse. This is what happened. We missed the quarter because, can you help with that problem? You know, I think we can. So that is certainly an issue that a lot of our customers face, you know, and they know that whenever they change territories in a significant way, it's going to take a hit. The advance analysis and the predictive capabilities, you know, of looking at how you've got your territories aligned and making smaller changes to that as you go through, you know, without the big revolution that some companies go through. And they can easily lose a quarter when they go through that revolution. Can really help you kind of get ahead of that and help give more continuity to the sales teams. So it's not just a, you know, we're going to reorganize for the sake of reorganizing, but you've got a lot more targeted data about how you want to make those changes and adjustments to it. So I see two things there. One is the potential to stage that transition and the other is to communicate so the impact of that transition. And you can help with the latter, I think is what I'm referring. Yeah, we can, we can. So you can understand that, you know, again, feeding that predictive data in the data around compensation management through to this, you know, you've got the possibility of understanding what that kind of churn is going to be if you apply that within those, within your organization. What are some of the more gnarly problems that customers come to you with that IBM has helped them solve? Oh, you know, it's often, especially for large enterprises, you know, they have had maybe legacy systems for a long period of time. And actually they've forgotten how they, how they, you know, the core of their requirements, how they paid people. And so, you know. It's tribal knowledge. It is, it is, it is. So, you know, we really do, I mean, putting this kind of system in place really helps people move from this phase of chaos and that could be chaos around, you know, they use Excel and it's all hand driven work or it's chaos around legacy systems and really help us get them over to that curve to a point where they've got the basic level of stability and they can really kind of then start to build on that with, you know, clarity of process. The sellers trust the data they're seeing, the way they do inquiries into it is very clean and again the feedback to the sellers is quick and easy which means that the sellers are more motivated to sell. And then they move into that final phase of, you know, how do we optimize? So, and this is where a lot of our clients are now, you know, the ones who have implemented ICM are now pushing us to say, this is the predictive piece. How do we help us actually maximize the top line, you know, as well as control this process. You've done a great job helping us control the process, you know, what's next for us and our clients are taking us there. How important is visualization in this whole space and what is IBM doing there? Oh, it's incredibly essential, you know. We tell stories through something like, what's an analytics and it allows us to build up, you know, a clarity of explanation for what's actually happening in business. Show the insight and then show the action you're going to take. This stuff has always got to be tied back to an action that you're going to take somewhere in the business whether again it's about your compensation, your territory layout, whatever that is. But the visualization and the way of telling that story is really important. And the visualization of something like Watson and the way it can help you really see the connection points and the patterns in the data, you know, really brings that home in a much more visceral way. And Watson's kind of like your secret new secret weapon, shiny new toy, but it's also a secret weapon that nobody else has at this moment. So, last question. Take us through Alan, the vision that you have for sort of near to mid and even long term for your organization. Yeah, great question. So, the world of sales compensation, sales performance management is getting more complex for users. You know, they are seeing a lot stronger regulatory requirements. You know, the economies are improving. We're seeing a return to growth that has certain implications for them. And just the requirements around efficiency and effectiveness. So our first job is to help them be able to respond to that. Make their life simpler, help them be more agile. We've got incredibly powerful, incredibly flexible solutions. So, you know, overlaying simplicity across the top of that so we can help them. That's our short term goal and just exposing more of the data to analytics is kind of where we want to be. And then as we move forward, you know, the sales performance management space is again, about helping them grow the top line. So how could we really help adjust that? We've got the efficiency and the effectiveness. How do we help grow the top line? It's through Watson, it's through some other exciting things we're going to be looking at in this space to really accelerate those things over the next couple of years. Nothing happens until a sale is made. IBM can help you figure out what's happening after the sale is made. Alan Chapman, thanks very much for coming with you. It's a life with the company. It's really a pleasure having you. Thank you very much. All right, keep it right there. Everybody, Jeff Frick and I, we'll be right back. After this message, this is IBM Vision. This is theCUBE, we'll be right back.