Colleague Melissa Hilbert and I are pleased to announce the latest version of the Magic Quadrant for Sales Performance Management. For those not familiar with this Magic Quadrant, it is an annual examination of vendors for incentive compensation, quota management, and territory management.
The SPM market continued to mature in 2016, growing to an estimated $753 million in software revenue. This growth rate is lower than the rate experienced in the previous two years, but that does not indicate interest in the SPM market is waning. The 2016 revenue estimate reflects a considerably changed market definition.
Readers should note that Gartner changed the definition of SPM in 2016, dropping sales talent management functions like sales training, coaching, and appraisals. We made this change to bring better focus to the SPM capabilities most important to buyers. Gartner has long estimated that, based on analysis of clients’ inquiries and vendors’ feedback, 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 these functions will be covered as part of sales enablement research.
Gartner finds that vendors’ incentive compensation capabilities, particularly for rule definition and crediting, are maturing rapidly. This means that the core ICM capabilities are approaching commodity status. SPM software, however, does have considerable upside as a solution for companies that want to improve their planning processes. Gartner evaluates SPM vendors for their abilities to provide complex modeling capabilities that link together revenue forecasts with sales execution plans.
Lastly, Gartner released the inaugural version of the SPM Critical Capabilities with the Magic Quadrant. Gartner clients should use the Critical Capabilities as a means of comparing vendors across common SPM functions, like modeling, advanced analytics, and scalability.
To access either publication, please contact your Gartner representative.
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