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HR-Finance Service Express Streamlines Incentive Comp in a High-Growth Environment

HR/Finance at Service Express Streamlines Incentive Comp in a High-Growth Environment

Imagine a high-tech company that offers a broad array of hardware and services. That company thrives in high-growth segments (tripling in size over a six-year period in every possible way: new products, several acquisitions, new regions, changing territories, and more sales reps operating under increasingly nuanced, well-crafted comp plans.

How can that company – and its sales operations team, in particular – keep pace with the constant volatility and growth? That’s the challenge we faced at Service Express. In this blog post, we want to share with you how – with the right strategy and the right tools – we’ve managed that complexity in our high-growth, high-speed environment.  

A Company on the Fast Track

Over the past 35 years, Service Express has emerged as a leading global provider of data center solutions, selling hardware and services to help companies control costs and keep their IT infrastructures performing at optimal levels. We specialize in post-warranty maintenance for multi-vendor server, storage, and networking equipment, and we also sell after-market equipment as our customers’ needs evolve.

That means we now have two different business models for sales comp – hardware and services – that call for two very different plans to reflect many different requirements and nuances. For instance, gross sales and margins vary greatly in each business model. Then those distinctions must roll up through their management hierarchies with different commission rates and quotas. In our services business, we comp on revenue (not profit), and most of our contracts last two or three years, so there are risks of clawbacks if there are contract cancellations. In our hardware equipment business, we offer hundreds of SKUs across multiple categories and pay commissions based on portions of revenue and profit. So, the complexity across our company is significant.

People on the Move

From a people perspective, our HR team handles the movement of our employees. As you might imagine, in a fast-growing, dynamic business like ours, we’re constantly hiring, promoting, and transferring people. We regularly promote SDRs into higher-level sales roles and transition them from small/mid-markets to large markets and enterprise segments. We need to track who’s moving and when. For instance, you can’t move a commissioned employee mid-month, and you want to ensure every employee is only on one comp plan at a time. When they do move, you want to make sure everything is defined and in place: quota, territory, and similar details. 

In many organizations, payroll is often the responsibility of the finance department. But at Service Express, payroll is handled by our HR department. HR “owns” commissions and employee payouts but finance “owns” the comp plans and structures. All of this means finance and HR must collaborate very closely.

With 60-70 highly complex plans that change frequently, ICM is a critical function at Service Express. For several years, we relied on an inflexible homegrown system (that, today, goes by an unpleasant nickname in our company). Like many homegrown systems, this arose to fill a practical need and serve an important purpose, and we still use it today to generate some sales results data. But over time, it had become a “Frankenstein” that could not automate our comp calculations. Our payouts are driven by different plan components, which our old system struggled to support. And we couldn’t keep up with employee movement, because the software was so rigid. That forced us to build mountains of external spreadsheets and make numerous side-payments.

Streamlining the Collaboration between Finance and HR

Today, although that homegrown system still generates valuable data for us, we’ve shifted over to Performio (which easily imports that data through scheduled CSV extracts). Performio handles all of the logic for complex calculations (like accelerators) and performs those calculations automatically on a predefined schedule.

Now, we’re no longer spending hours or days babysitting and test-auditing our calculations. We’re not wasting time investigating calculation errors or data-integrity issues. Instead, we’re able to spend our time analyzing and changing our plans, run pilots with test data to see the impact of proposed changes, and create new comp plans for the coming fiscal year. In an average month, the two of us might spend one or two hours within Performio to ensure everything looks right before the process flows over to our HRIS to issue payments. On the payroll side, it’s great that our HRIS can export all of the employee information to Performio. There’s no more manual entry, and our commissions reports and calculations are always up to date – even when people keep moving throughout our sales organization.

Of course, an ICM system needs the support of the people on the front lines. Our sales team has been enthusiastic in their use of Performio. Everyone has their own individual login, so they can view their results (and only their results) on demand. And each month, we send a report to everyone on commission so they can see their plan performance month-by-month – something we couldn’t previously provide. Now, they can see their results and how they’re calculated, and even see explanations of any clawbacks. It’s very helpful.

Ultimately, Performio has streamlined how Service Express designs and executes its incentive compensation plans, and it has enabled easier and smoother collaboration between HR and finance to motivate and compensate our sales professionals. In our high-growth environment, this has been a key contributor to our success.

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