We are excited to bring Transform 2022 back in-person July 19 and virtually July 20 – 28. Join AI and data leaders for insightful talks and exciting networking opportunities. Register today!
Could AI help motivate sales teams with creative incentives? Forma AI, a Toronto-based sales performance management (SPM) solution provider, says yes. The company, which offers an AI-supported SPM platform, wants enterprises to rethink the way sales compensation is managed and optimized. Today, Forma announced it has raised $45 million in series B funding for expanding marketing and development of the platform.
Agile, responsive sales organizations have improved their results in the last few years with the inclusion of next-gen tools such as Salesforce, Hubspot, Sage and others. But sales compensation management – a $1 trillion annual cost center – remains a decades-old bottleneck. More than 40 software and services companies have tried to solve this complex problem, yet the many processes required to design, administer and optimize compensation plans are broken. Over-stressed teams are still working with spreadsheets, manual tracking and calculations, and building formulas when many of these functions should be automated.
Forma uses automated workflows to unite the compensation process across an organization to bring finance, HR, sales, sales operations and IT together within a single collaboration tool to put everybody in these departments on the same page. This enables better communication for making quicker decisions and goals attained faster than usual.
Old sales compensation methods stifle growth
“The way sales compensation has been done historically has been completely unscientific,” Nabeil Alazzam, founder and CEO of Forma, told VentureBeat. “As a sales leader, you may know the data is telling you that you’re not selling enough product X, and that your sales leader who is strategically delivering more projects is going to be fundamental to the strategy of the organization,” he said. “So you step back and bring in your sales ops team and your sales comp team and say, ‘I’d like to put a SPIF (sales performance incentive fund) together to drive product X.’ So you’ve used a structure from the past, you’re familiar with this kind of structure. You then give that recommendation to your sales ops team and sales conference.”
Alazzam insisted that these sales compensation management processes are broken. “Companies are trapped doing the same things they’ve always done, which stifles growth and profitability,” he said. Forma uses data-driven tools to bring all the components of compensation management into a single AI-supported platform, eliminating existing process constraints and bottlenecks.”
Getting sales compensation right can be one of the most significant revenue drivers for a business, Phil Boyer, Crosslink Capital partner and an early investor, said in a media advisory.
“What past attempts to solve this problem have gotten wrong is that they placed the administrative burden of managing sales comp on the customer,” Boyer said. “Forma eliminates broken and disconnected internal processes and empowers its users to focus on optimizing sales comp using live data as a force multiplier.”
Taskwork automated using elemental functions
The company’s platform automates taskwork that extends far beyond the scope of traditional incentive compensation management (ICM) tools by breaking down sales comp to its elemental building blocks of functions, rules and workflows. These building blocks are then reused across customers to automate redundant tasks in a consistent fashion.
Forma handles billions in annual managed commissions for enterprises such as OpenTable, Stryker and Autodesk, Alazzam said. The company has upended the current cloud spreadsheet paradigm by uniting previously siloed incentive processes into a single, high-performance, scalable and flexible environment.
Forma facilitates higher-impact incentives and faster execution to encourage optimal sales team behavior by removing the constraints of rigid, disjointed comp processes, Alazzam said. As a result, Forma is laying a foundation where high-value compensation resources spend time on promoting better sales behaviors through incentive design — not fussing over formula building, he said.
The funding round was led by ACME Capital, along with Crosslink Capital, Golden Ventures, Uncork Capital, Xfund and Gaingels. With 400% revenue growth in 2021 and rapid enterprise adoption of its revolutionary SPM platform, Forma plans to use the capital to expand its product development and go-to-market capabilities to meet growing demand in the SPM market.
VentureBeat’s mission is to be a digital town square for technical decision-makers to gain knowledge about transformative enterprise technology and transact. Learn more about membership.
Source: Read Full Article