Warning: there’s an error in your job description. You may think you work on a RevOps team. But if you use Excel for commission operations, you’re actually a programmer. Surprise!
We know—this news probably comes as a shock. You may not have a computer science background, or wear hoodies to work, or whatever else programmers do. But that doesn’t change the fact that these massive Excel spreadsheets you’re engineering are essentially mini computer programs. Even Microsoft researchers define Excel as a functional programming language (source).
So what? Why should you care?
There are roughly 750 million Excel users worldwide— more than all C, C++, C# and Python coders combined (source 1 / source 2). In fact, 60% of businesses in the US still depend on Excel spreadsheets (source). However, unlike a typical software engineer, most people patching together complex formulas in Excel don’t actually realize they’re programmers.
This gives you a unique opportunity to optimize your sales commission process like a supercharged engineering team, and gain a serious advantage over your competitors— who are still slogging through their spreadsheets, none the wiser.
However, it won’t be as easy as copy/pasting A2 to A3. You need to start thinking like a programmer. Efficiency and growth shouldn’t just be desired outcomes, but foundational capabilities baked into all aspects of commission operations.
(Dive into that rabbit hole, here: Why Your Commission Spreadsheet will Fail You at Scale.)
There’s no way around it. You need proper commission software. The problem is, there’s a dizzying array of options out there, with each solution claiming to help you “streamline” and “automate”. But those mean different things to different vendors, and may or may not be compatible with a programmer-style approach.
This guide will help you cut through all the jargon and identify key functional requirements for building out an agile, efficient, and highly scalable commission process.
Adopting an Agile Mindset for Commission Management
The best way to start thinking like a programmer is to adopt an agile approach to commission operations. In engineering, the agile methodology means developing products in small— but still consumable— segments, which are then tested, improved, and iterated.
If you’ve heard of the agile approach, that’s probably because it’s one of the most popular ways to build software in the world. But it wasn’t always. In the early aughts, software was primarily developed using the waterfall method—a rigid, linear approach initially designed to manage construction and manufacturing projects.
Programmers had to build out products in strict sequential phases before anything was released, giving them limited ability to respond to changing priorities and requirements. Instead of building and testing new products simultaneously, teams toiled over a “grand reveal”, then had to go back to address any problems or feedback post-completion. Development was slow and cumbersome— much like a typical commission cycle.
In 2001, a group of programmers decided they had had enough. They gathered for a weekend ski trip in Snowbird, Utah— about 30 minutes from Spiff’s headquarters, believe it or not!
After putting their heads together, they emerged with the now famous Agile Manifesto, which promptly turned the world of software development on its head. This innovative framework wasn’t just simple and flexible. It also enabled teams to drastically improve their efficiency, transparency, and scalability in one full swoop.
There’s no reason you can’t do the same in sales or RevOps— especially if you can identify agile functionality in commission software. That’s where this guide comes in! But first, let’s take a quick look at what you have in your current Excel setup that’s actually working, so you don’t throw the baby out with the bathwater.
The Upside to Using Excel for Commission Management
Excel didn’t become one of the most popular business tools in the world by accident. In spite of its limitations, it also offers some powerful benefits you’ll want to make sure you don’t lose when shopping for a commission management tool.
Excel’s biggest advantage is its flexibility. It can perform any mathematical or logical equation known to man. It can process vast amounts of data from limitless sources— which it can then calculate, manipulate, and visualize, all instantaneously.
It’s also familiar. Even if Excel spreadsheets are often complex to the point of absurdity, you can still walk into any finance department, at any organization, anywhere in the world, and find someone who knows how to build them.
However, as you’re probably well aware, commission calculation in Excel comes with some limitations. Some of the biggies:
Excel is technologically primitive
Excel’s versatility comes at cost— it was built for everyone and everything. But do you really need software with physics modeling capabilities? Excel may be able to process limitless formulas, but it can’t customize them to reflect the complexity of your compensation plans. That’s not what it was designed for.
Like the similarly outdated waterfall approach to software development, Excel is a product of the 1970’s— and hasn’t changed much since. It may have been disruptive at the time, but it hasn’t kept pace with the evolving requirements of modern sales and RevOps teams.
Excel also lacks some critical functionality for managing commission plans like a well-oiled machine— like automatically importing data from your CRM, ERP, and payroll systems.
As a result, you’re left manually stitching data together from multiple sources, across thousands of formulas, and hundreds of tabs. CFOs spend an average of 2.2 hours per day sifting through Excel spreadsheets, while IT teams struggle to manage user access to increasingly disparate data sources (source). It’s a drain on the entire system.
For all of Excel’s formula prowess, at the end of the day, you’re essentially working for your software— instead of your software working for you.
Excel is prone to errors
Spreadsheet slog isn’t just a logistical headache. It’s also a liability. With limited automation capabilities, Excel is inherently manual, which dramatically increases the likelihood of human errors.
According to one study, more than 80% of Excel spreadsheets have mistakes in them (source). The study also found that errors in Excel spreadsheets occur with similar frequency to software development— but programmers run through multiple rounds of testing and validation prior to release, whereas spreadsheets are typically used immediately after they’re built.
The results can be catastrophic. JPMorgan Chase once suffered a $6 billion trading loss due to a copy/paste mistake in Excel, while Kodak was hit with a $11 million severance error caused by a spreadsheet typo (source 1 / source 2).
Excel can be confusing
Excel spreadsheets can be difficult to decipher, especially given the complexity of comp plans. Beyond demanding excessive hours for admin and upkeep, Excel also has limited visualization abilities. This essentially offloads motivation efforts onto the same reps you’re trying to incentivize, who then need to make sense of their own commission calculations.
Excel isn’t scaleable
Excel is foundationally incompatible with growth. It depends on manual processes, and also isn’t easily shareable. There’s no way to ensure the right people have access to the right information— at least not without complex permissioning logic.
This may be manageable in the beginning, but is increasingly problematic as your sales team grows. Another issue is ASC 606 compliance, which may require tracking several years of historical commission data. Doing this manually will drain resources even further, and isn’t sustainable in the long-term.
The key to successful commission management is finding a replacement that’s enough like Excel that you can still take advantage of its flexibility (and won’t have to teach yourself a brand new system from scratch), but not so much like Excel that it inherits the same cumbersome characteristics which make scaling such a challenge in the first place.
It’s like Goldie Locks and the three bears, but with software: the amount of Excel-ness needs to be just right. This is important to keep in mind as you build out an agile commission process.
What does agile commission operations actually look like?
We already know what agile means to engineering teams, but what does this look like in sales or RevOps? Regardless of its application, agile processes are universally simple, flexible, efficient, and transparent.
These common characteristics guide your software search by functioning almost like a checklist. When fleshing out your requirements, or evaluating a particular feature, ask yourself “How will this make my commission process more [simple / flexible / efficient / transparent]?” If you’re unable to answer for at least one of these traits, it probably isn’t agile.
Using this approach will help you bypass the buzzwords and cut through all the fluff, and zero in on the functionality you actually need to build out an agile commission process. Here’s what that might look like:
Remember, the Agile Manifesto was a reaction against a bloated and needlessly complex approach to software development. By definition, all agile processes are streamlined and simplified. When it comes to commission management and comp plan design, you’ll want a tool that has the following:
- Clean interface:
This should be intuitive and easy to navigate. You have enough on your plate as it is without trying to make sense of confusing dashboards.
- Powerful technology:
Ideally, the interface should be an extension of an equally clean platform, rather than just a nicer looking version of Excel. Some similarity is okay, even preferred— like being able to use Excel’s familiar syntax or formulas. What you want to avoid, however, is sinking time and resources into revamping your entire commission process, only to replace one clunky system with another.
Your commission software should play nicely with other tools. This means whichever tool you choose should have a wide range of integrations available. CRM integration is a no-brainer, but make sure you’re also set up to easily pull in data from your ERP, HCM, payroll, and invoicing systems (if you decide to build out a centralized “source of truth” later).The best way to “future-proof” your integration capabilities is to look for API-first solutions. Without getting too technical, this basically means software designed to connect with other platforms from day one, rather than patching a bunch of integrations together if and when the needs arise.API-first solutions will typically offer Open Data API, so you can not only import data, but also export it to other software you might be using, like a Business Intelligence tool.
Allow for flexibility
Software developers and RevOps professionals are similar in that they both need to respond quickly to changing needs and requirements. In an agile commission system, flexibility is a must. You’ll need a platform that provides you with the following:
- Infinite Formulas:
If you never want to look at another Excel spreadsheet, we get it (and honestly, same). But don’t leave behind your ability to build an infinite combination of formulas. You’ll need it when your organization expands to new territories, products, and GTM strategies— as comp plans get more complex.Try to find a platform which takes Excel’s flexibility and then updates, optimizes, and expands upon it for business users, rather than attempting to re-invent the wheel.
Flexibility also means being able to tailor your system to support your comp plans, rather than adjusting your comp plans to fit your software. In agile commission operations, customization should be as simple and straightforward as possible.In the very least, you’ll want custom values, fields and attributes that let you tailor commissions on a team, plan, and individual level— without having to go through a CSM. More advanced customization capabilities might include single-click currency conversions for international sales teams.
You can have the most robust, powerful commission software in the world, stacked with every imaginable feature — but if you can’t manage it yourself on an as needed basis, is it really worth it?Opting for a no-code/low-code alternative to complex, custom builds is the best way to avoid being pigeonholed into high professional services fees in order to expand. Why put speed bumps in your way if you don’t have to?
Agile processes are efficient because they reduce manual tasks as much as possible. In commission management and comp plan design, this means working with a tool that offers the following:
An agile commission process should be automated as much as possible—starting with the data itself and potentially including other opportunities for automation like batch approvals, reminders, reporting, and notifications. This is a non-negotiable.Commissions should always be calculated in real-time, since delays lead to inaccurate data and leave your entire process vulnerable to errors.
The ability to import CRM data is crucial. But not all imports are created equal. For example, if software pulls in all Salesforce data each import— instead of only importing new or modified data— this can lead to significant lag times.Also pay attention to whether software syncs directly with standard and custom Salesforce objects, or merely pulls in reports. If the latter, you’ll need to configure all your reports in Salesforce first, which means more drudge work (not exactly agile).When evaluating commission software, don’t just ask if it syncs with your CRM, but how. Getting into the nitty gritty is the most effective way to determine if a particular platform’s import functionality is compatible with an agile commission process.
As a programmer, you’re fully capable of hand-coding complex formulas. But agile commission operations should be optimized for efficiency.No-code or low-code platforms work especially well for agile commission operations, because they allow you to create commission logic using a visual interface— freeing you to focus more on strategy and less on complex formulas and spreadsheet wrangling.When you’re building a nuanced comp plan with multiple tiers, triggers, accelerators, and rollups, functionality like auto-complete, pre-set commission rules and a quickly accessible functions library will also cut down manual steps, even if the work itself isn’t automated. Even seemingly minor capabilities can save time, like being able to write formulas in everyday language instead of ordinal Excels speak (i.e. ARR = MRR * 12 instead of A3, B16 / D2 * C4, D18).
- Real-time data:
Comp plans are an essential tool to manage motivation and measure performance– but if you can’t trust your sales commission data to update in real time, that data suddenly becomes much less valuable.
Agile processes require transparency, plain and simple. Otherwise, you can easily get overwhelmed with bottlenecks, repetitive tasks, and requests. Some key functionality to look for in a commission platform includes:
- Versioning & comment threading:
Version control is critical to an agile commission process— especially as your team grows. Without it, figuring out what, when, and why specific changes were made to your comp plan can feel like searching for a needle in a haystack. Versioning can also be enhanced with threaded comments to help keep track of adjustments along the way to provide necessary context.
- Personalized rep dashboards:
Every sales rep should be able to tell you where they stand against goals and how much commission they’ve earned at any given time.Therefore, it’s important to look for a tool that automatically pulls personalized rep dashboards in real-time. That way, reps don’t need to worry about ensuring data accuracy themselves and can redirect their full attention back to selling.
- Commission tracing:
Having the ability to trace any calculation or overwrite back to its original source not only improves transparency, but reduces manual labor. For admin, this means easier audits and fewer ad-hoc questions from confused employees.For sales teams, tracing provides clarity and demonstrates the reliability of your agile commission process— which in turn makes it easier to focus on selling.
Invest in agile commission operations to future-proof your sales organization
There are infinite ways to build out your commission process, but thinking like a programmer— and adapting an agile approach— is the best way to optimize for future growth. That means prioritizing functionality that enables simplicity, flexibility, efficiency, and transparency at every stage.
Investing in a tool that levels up your commission game is the first step you must take toward future proofing your sales organization. Without simplicity, flexibility, efficiency, and transparency you aren’t set up to scale.
Spiff is a new class of software that creates trust across the organization by delivering real-time automation of commission calculations and motivates teams to drive top-line growth. With a combination of an intuitive UI, real-time visibility, and seamless integrations into current systems, Spiff is the first choice among high-growth businesses. Spiff’s sales commission software enables finance and sales operations teams to self-manage complex incentive compensation plans and provides transparency for sales teams.