10 Key Metrics of DevOps: To Measure App Success Rate Amit Jain December 15, 2022

What is DevOps?

  • DevOps is simply the unification of the development and operations line-up. DevOps incorporates developer and operation teams to improve collaboration and productivity by automating infrastructure, workflows and continuously measuring application performance.
  • DevOps teams try to automate everything. It could be testing a new code or setting up new infrastructure.
  • The infrastructure for development includes Planning, Coding, Testing, and Building. In contrast, the infrastructure for operations includes Release, Operate, Deploy, and Monitor.
  • In a traditional setup, developers write large chunks of code for their software over weeks or even months. A DevOps mindset allows them to write small pieces of code that are integrated, tested, monitored, and deployed in hours. It will not only increase the frequency of application deployments but also reduce the time required to deploy new code.
  • It improves their ability to respond to market demands or other software-related factors.
  • Various DevOps tools assist the DevOps team in automating their processes and monitoring application performance.

 

What are DevOps Metrics?

  • DevOps metrics are data sets that directly reveal the performance of a DevOps software development pipeline. And further aids in the rapid identification and removal of bottlenecks. These metrics monitor the application’s technical capabilities and team proceedings.
  • DevOps metrics provide a holistic view of the impact and business value of DevOps’s success. By selecting the appropriate performance metrics, one can influence current DevOps initiatives and future production and technological decisions.

The following are the ten key DevOps metrics that can help businesses monitor the success rate of their apps:

1. Deployment frequency

Track the frequency of code deployment to get a clear picture of how quickly new features and capabilities roll out. This metric should remain stable or increase over time. A decrease or stutter indicates a bottleneck in the DevOps team workflow.

2. Deployment failure

Changes must be implemented smoothly, not just frequently. Maintain the lowest possible failure rate for application changes and releases deployed into production. Potential failures include a change that causes users to time out or entails a rollback for further work. Create a system for monitoring the success and failure of changes. A high rate of change failure impacts the application’s end users. It requires more time spent by administrators troubleshooting issues and fixing bugs rather than completing high-value initiatives.

3. Lead Time

If the goal is to ship code as quickly as possible, this is a critical DevOps metric. Lead time is the actual amount of time that passes between the start of a deliverable and its deployment. It informs you how long it would take to get a new product to manufacture if you start working on it today.

4. Mean Time to Detect (MTTD)

If it takes considerably longer to detect a problem, a low change in failure rate is insufficient. For example, if the mean time to detect is 30 days, it could take almost a month to diagnose the issue that causes failure rates to rise. As DevOps procedures are more established, MTTD ought to decrease with time. Expect the bottlenecks causing these current delays to later bring further congestion to the DevOps workflow if the MTTD increases. For security reasons, rapid detection of the problem proves beneficial as it limits the scope of an attack.

5. Mean Time to Recovery (MTTR)

Mean time to recovery is another important DevOps metric that administrators should keep as low as possible. Remove problems as soon as you become aware of them. DevOps organizations adhere to the principle that frequent, incremental changes are easier to deploy and fix when something goes wrong. When a release contains a high degree of change and complexity, it becomes more difficult to identify and resolve issues. Several factors, including asset type, criticality, and age, influence what constitutes a world-class MTTR. An MTTR of less than five hours, on the other hand, is a good rule of thumb.

6. Application Performance rate

An unexpected surge in end users can cause performance issues at the infrastructure level. Storage bottlenecks, high memory consumption, CPU spikes and network latency are all consequences of increased application usage. Increasing end-user numbers may necessitate the installation of additional infrastructure. Performance drops without other end-user requests. It could also indicate that bugs or inefficient changes from development and release are slowing down the app. To ensure high availability and a positive end-user experience, verify and correct such errors without delay.

7. Usage and Traffic of Applications

Following a deployment, you should check if the number of transactions or users accessing your system appears normal. Something could go wrong if you witness no traffic or a massive spike in traffic. Zero traffic on your application is the last thing you want to see. Alternatively, if you’re using microservices and one of your applications generates a lot more traffic, you might notice a tremendous spike in it.

8. Application availability

Application availability is a metric used to determine whether an application is properly functioning and meets the needs of an individual or business. The availability is determined through application-specific key performance indicators (KPIs), such as overall or timed application uptime and downtime, the number of completed transactions, reliability, responsiveness, and other relevant factors.

9. Error rates

It is crucial to monitor error rates within your application. They indicate not only quality issues but also ongoing performance and uptime issues. Best practices for exception handling are critical for good software. Identify new exceptions in your code following a deployment. That is looking for any signs of bugs. Capture issues with database connections, query timeouts, and other related topics in production.

10. Change failure percentage

The total number of failed deployments is divided by the total number of deployments to yield the change failure percentage metric. Assume your team performs ten deployments per day. There were three return failures out of that total. This scenario has a 30% change failure rate. That is, 30% of the code changes must be fixed or reversed.

 

Did you know?

  1. 66% of the organizations surveyed have implemented DevOps for their applications.
  2. 16% of those organizations saw DevOps as a cost-cutting driver. 49% of the participants credited DevOps for their improved performance, faster market-time, and higher ROI (Return On Investment).
  3. 48% of respondents said the main reason they weren’t using DevOps was a lack of knowledge, while 33% said they didn’t have the right tools to implement it. 
  4. Version control systems are ranked first on the list of tools that support a DevOps initiative by 84% of those polled. Modern version control systems are the fundamental building blocks of any process involving automation, continuous integration, or delivery.

 

In a nutshell:

Today’s technology allows you to automate a wide range of tasks. DevOps is the collaboration of software development teams from various departments and locations. DevOps metrics, on the other hand, are a means of measuring the effectiveness of your team’s collaboration and a step toward business advancement.

 

8 Best Node.js libraries you should know in 2023 Amit Jain November 25, 2022

What is Node.js?

Node.js is an open-source runtime platform for developing server-side web applications using JavaScript. Node.js is created using the cross-platform Python utility GYP (Generate Your Project). Other build phases are also implemented using Python. As a result, Python mandates that you construct Node.js from the source. Real-time online applications, social media applications, teamwork tools, multiplayer games, and API are ideally suited for Node.js. One of the most well-liked frameworks for building web servers is Node.js. Due to its versatility, it is frequently referred to as “The Swiss Army Knife of Programming Languages.

 

What is a Node.js library?

A Node.js library is a repository of pre-written JavaScript code that can perform a particular task or set of functions. This can include working with HTTP requests, the file system, or creating server-side applications. Node.js libraries are typically installed using the npm package manager, which comes bundled with the Node.js installation. These libraries can be used in your Node.js applications to save time and make development easier.

 

8 Node.js libraries to know in 2023 are-

1. Hapi.js

Hapi.js (HTTP-API) is an open-source Node.js library for developing powerful and scalable web applications. Hapi is commonly used to create API servers, HTTP-proxy applications, and websites. It includes many unique features that allow developers to create secure, powerful, and high-powered applications. Hapi also prevents error messages from leaking information or echoing back exploits. Many businesses, including PayPal, Brainhub, and Beam, use Hapi.js framework for their websites and online APIs.

2. Async.js

Async.js is one of the best JavaScript backend libraries available to developers. It ensures the removal of render-blocking JavaScript and improves your web page performance. Async.js has functions for working with asynchronous JavaScript code. Asynchronous code is non-blocking, meaning that it does not stop the execution of other code while it is running. This is important in JavaScript because it allows your code to run more efficiently without getting bogged down by long-running operations. Moreover, it has several utility functions for working with asynchronous code, including managing control flow, working with collections, and creating asynchronous versions of common JavaScript functions. It can be used in browsers and on a server-side with Node.js.

3. Request

The Request JavaScript library provides a safe and dependable way for apps to access content from external sources by making HTTP calls. Data is obtained from external sources, including websites. It provides a simple interface for sending HTTP requests and receiving responses. This can be useful for accessing web APIs, sending data to a server, or making requests to other websites. The Request library is easy to use and flexible, allowing you to customize and handle the response in various ways. It can be installed using the npm package manager and is commonly used in Node.js applications requiring HTTP requests.

4. Socket.io 

Socket.io is a node.js library that allows client and server interaction in a low-latency, bidirectional, and event-based manner. It works on any platform, browser, or device, with equal emphasis on dependability and speed. Socket.io is built on the WebSockets API and Node.js. It is the most widely used library on npm (Node Package Manager). 

5. Express.js

Express.js is a Node.js-based open-source web application framework. It provides a simple API for creating robust, scalable, and maintainable web applications. Express has earned a reputation as the library with the most flexible and minimalist Node.js web framework. This library stands out because it performs as a speedy, unopinionated, minimalist web framework. With a simple and extensible framework that offers a number of popular utilities, Express will offer the finest assistance.

6. Passport.js

Passport is an authentication middleware and one of the best libraries for Node developers. It is adaptable, modular, and it turns out to be an Express-based web application. It provides a simple and flexible way to authenticate users in your web application. Passport supports many authentication strategies, including OAuth, OpenID, and LDAP. It can be used with different web frameworks, including Express and Connect. Passport makes it easy to implement authentication to your Node.js application, allowing you to focus on building the core functionality of your app. It can be installed using the npm package manager and is typically used in conjunction with other Node.js libraries and frameworks.

7. Ethers.js

Ethers.js is a JavaScript library for interacting with the Ethereum blockchain and its ecosystem. It is a complete, simple, and secure library for building Ethereum-powered applications. Ethers.js provides a clean, powerful, and easy-to-use API for working with Ethereum, including support for smart contracts, wallets, transactions, and more. It is flexible and extensible, allowing you to build a wide variety of Ethereum-based applications. Ethers.js can be installed using the npm package manager and is commonly used in Node.js applications that need to interact with the Ethereum blockchain.

8. Mongoose.js

Mongoose.js is a popular JavaScript library for working with MongoDB, a popular NoSQL database. MongoDB is a document-oriented database, which means it stores data in documents that have a flexible schema. Mongoose.js provides a straightforward, schema-based solution to model your application data. It includes built-in type casting, query building, validation, business logic hooks, and more. This makes it easy to work with data in your MongoDB database from your Node.js application. Mongoose.js can be installed using the npm package manager and is commonly used in Node.js applications that use MongoDB.

 

Did you know?

  • Node.js is essentially a server that can run Javascript.
  • It provides event-driven APIs
  • Node.js is non-blocking, and it runs code asynchronously by default.

 

In a nutshell:

Node.js is the preferred framework for Node developers for enterprise applications and infrastructure. Each of the libraries mentioned above has proven useful at Incentius. Our development team has worked with Node.js libraries to develop various applications and found them handy to use. 

Impact of 5G Technology on Mobile App Development Amit Jain November 23, 2022

What is 5G?

With the ever-changing requirements of technological advances, the need for higher speed, comfort, and network connectivity is skyrocketing. Despite the fact that the 4G network has provided all of the necessary services, it is insufficient for the next wave. For the world of the internet, the evolution of 5G technology is a game-changer. 5G isn’t just a more advanced version of 4G; it’s a completely new network infrastructure. 5G has the ability to completely change the way mobile networks work. This technology provides more stable high-speed mobile internet connectivity. It facilitates the transfer of large amounts of data more comfortably and rapidly by allowing for speedier downloads. Users’ perceptions of smartphones and mobile apps will alter as a result of the 5G network. 5G is a watershed moment in the digitalization era. We are on the verge of entering the golden age of cellular technology, 5G technology. The promise of 5G technology is that it will improve the user experience by allowing smartphones to connect to networks more quickly.

Features/Benefits of 5G

  • Low to Non-Existent Latency

Network interference and delays can be lethal when you’re trying to make vital decisions in real-time or run machinery and software. The latency of 5G is near zero, reducing the 50 milliseconds of 4G delay to 1 millisecond. Sure, faster website loading times are good, but the ones getting the most benefits are going to be connected driverless vehicles, remote surgery, and responsive virtual reality.

  • Connectivity 

5G connectivity will be available to up to a million devices. Increased connection density will make it easier to integrate IoT into mobile apps. If you’ve ever tried to use mobile internet in a highly populated area, you’ll realize how serious connection density is to the user. 4G can only connect 2000 devices within a 0.38-mile radius. On the other hand, 5G can connect up to 1 million devices. The capability gets around 4G’s constraint of only being able to connect 2,000 devices at a time inside a 0.38-square-mile area. It provides improved network traffic handling capabilities while allowing smooth connectivity between apps and hardware.

  • Increased Speed 

Customers may easily download apps in only a few seconds thanks to 5G technology’s high download speed, regardless of how large the software is. Aside from the fast app download speed, 5G provides a significant benefit to smartphone app merchants that depend on in-app downloads and monetization schemes to make money from their apps. When it comes to entertainment apps, the biggest issue is streaming speed, which will be addressed by 5G networks, resulting in higher mobile app engagement.

Impact of 5G on Mobile App Development

  • Top-notch AR and 3D Models 

Mobile App development for immersive AR and 3D gaming will see a significant boost. Mobile app developers are unable to deliver much more service for AR and VR due to network difficulties and latency. However, with 5G technology, reducing latency can improve the user experience by allowing them to interact more effectively with the application. Apps that utilize cutting-edge 3D printers can be used in a variety of fields, including education, construction, and e-commerce. Users can, for example, a user may try on garments without going to the store or putting them on with only a few clicks. Before making a purchase choice, a home décor company can use immersive virtual reality and 5G network speeds to show buyers what different types of furniture might look like in their interiors. As a result, by creating an immersive retail experience online, there would be limitless possibilities that would alter the consumer experience and the way they purchase. Mobile app developers will be able to attract more clients to their platform by processing bigger volumes of data.

  • IoT Implementation Done Right

5G will usher in a slew of newly linked devices for which developers will design a variety of apps. It will also enable a wide range of IoT applications through the mobile app development process. These apps will run at their best, consuming less power and using a limited amount of data. Developers will be able to use the capabilities of machine learning and artificial intelligence with 5G to incorporate ambient technology into smarter apps. As a result of all of this, connected device adoption will accelerate, resulting in a better and more enjoyable user experience. In short, with the help of this sophisticated technology, businesses will be able to increase revenue.

  • A streaming video that is more fluid

5G-enabled applications are expected to provide users with rich media experiences. By enabling high-resolution live streaming at a faster rate, the technology will revolutionize video streaming. Reduced latency will aid in the smooth operation of video applications. Longer battery life means you’ll be able to watch for longer periods of time. Developers can use the app to advertise products and services by including high-performance 4K videos. It’s also a major boon for users!

  • Enhanced Mobile Broadband (eMBB) 

eMBB is another feature that works well in data-driven scenarios with high data rates. Apps can be designed with responsive and engaging interfaces using this feature, boosting the likelihood of app success by attracting more users. Other techniques to increase user engagement are to incorporate technology such as augmented reality (AR), virtual reality (VR), and so on.

  • The Cloud’s Compatibility Will Improve

Scalability is one of the most appealing features of 5G. It has high transmission rates, allowing the file to be transferred to the cloud more quickly and easily. 5G will also enable cloud storage and migration of technological infrastructure. What exactly does this imply? Developers can now lessen their reliance on hardware resources by including cloud accessibility in mobile app development. Due to low latency and fast performance, users may access their cloud storage with ease. Cloud computing will allow you to effectively restructure your company.

Conclusion

The 5G network will assist several businesses around the world, including mobile app development. The launch of 5G networks will have an impact on how people use their phones and open up new and enhanced prospects for app developers. Developers will be able to experiment with 5G and create new platforms and apps that provide faster and better user experiences thanks to the 5G network. It would not, however, be a stroll in the park. Because 5G necessitates major infrastructure upgrades, only established locations will be able to experience it first, whereas rural and developing areas are unlikely to do so very soon. As a result, developers will be faced with the difficult challenge of building different app versions for consumers, as some will be utilizing 5G-enabled smartphones while others will be using outdated 4G or 3G networks.

Do you have any requirements for Mobile App Development? We are ready to help you out.

How can DevOps scale your D2C/B2C business? Amit Jain

Scaling a firm is easier and less expensive with DevOps. With less labor, you may achieve massive economies of scale and higher throughput. By reducing human effort, automation can help your B2C and D2C businesses manage at a lesser cost and more efficiently. In most firms, continuous integration is a key area for progress. You may have a dozen or more systems, rather than relying on a single one. If those systems don’t communicate with one another, silos form, which exacerbates communication and management issues as your organization grows. 

“According to research, 60% less time is spent handling support cases by using DevOps rather than any Traditional Ops.”

Here is how leveraging DevOps can help you align customer business needs and requirements:

1 – Improved Customer Experience:

Customer input is always valuable since it aids firms in making adjustments and taking measures that improve the customer experience. This stage allows customers to immediately acknowledge your goods and assists you in making necessary improvements. Furthermore, customer feedback improves quality, lowers risks and costs, and streamlines the process from beginning to end. This ideology improves client engagement by allowing for the faster development of relevant applications. All apps are produced fast with the highest respect for client demands and desires, thanks to the joint work. End-users benefit from DevOps’ integrated cultural base, which offers them efficient and regular upgrades in order to optimize customer happiness.

2 – Faster Delivery:

Typically, the development team builds the code first, then tests it in a safe setting before handing it over to the operations team for production. The production process is slowed as a result of misunderstandings about infrastructure, configuration, deployment, log management, and monitoring since the two teams aren’t aligned

Companies can actually expedite delivery and reduce release time, because of synchronization brought in by DevOps. Furthermore, it enables early error detection, ensuring that code is always in a ready form. Companies can go to market in a timely manner and gain a competitive advantage as a result of the combined effects of all of these factors.

Reduces Failure Rate:

Living with the looming possibility of IT failure is harmful to a company’s reputation, especially if it affects the customer-facing side of the organization. Internally, they have the potential to hurt the company’s bottom line. DevOps minimizes failure rates while speeding up recovery times. This is largely owing to its iterative and continuous development style, which allows for modifications in the event of a crisis. Because of the shorter development cycle, DevOps encourages regular code versions. As a result, coding flaws are easily and quickly identified. Teams can apply agile programming techniques to reduce the number of implementation failures by utilizing their time. When development teams and activities collaborate to share ideas and grow together, it is easier to recover any losses caused by blunders.

Better Sales Numbers:

The purpose of enterprise DevOps isn’t to enable ten application deployments every day. It’s about achieving operational efficiencies and a more consistent, predictable, and repeatable operational environment. Companies can use this philosophy to automate repetitive processes without fear of making mistakes. Through periodic backups and rollovers, development can become more resilient and stable. Regression and performance testing can quickly bring about a tiny adjustment. Companies can save a lot of money if all of these functions are automated. If a company’s scale is large, this can result in huge financial benefits.

Conclusion: 

In D2C and B2C businesses, customers will be disappointed if your expansion leads it to stumble due to misunderstanding, ineffective working culture, miscommunication, or delivery capacity. Manual processes were good when you were just starting off. Now, they prevent you from moving quickly enough. Either you’ll be blowing things up or you’ll be hopelessly attempting to stay afloat. All of this is exhausting. Now is an excellent time to look at new DevOps Tools on the market that can save you time and money while allowing you to handle considerably higher volumes in all areas of your business.

Extensive Guide to Choose the Perfect Software Developer Amit Jain June 16, 2022

In recent years, many organizations have chosen outsourced software development rather than hire in-house software developers to meet their IT development demands. Of course, such companies must fully grasp the variables to consider when picking an outsource software development company to work with in order to ensure that the result fulfills their criteria.

Around the world, there is a considerable surge in software development outsourcing companies. As a result, businesses are now confronted with market realities that must be considered at the outset of the decision process. Check out these tips on how to properly set expectations for your software developer to help you select the ideal one for you.

1. Ensure that the Software Developer has Extensive Technical Experience:

Software Developers of high quality often have a wide variety of experience with various technologies and a thorough understanding of how they work and when they should be employed. The software developer cannot be considered an expert unless he or she has substantial technical experience. The finest software developers will draw on their wide industry knowledge and technical talents to produce world-class results and quickly solve hurdles. If at all feasible, choose developers that have worked on projects comparable to yours leveraging the same technology, as this helps you to benefit from their previous experience and improve project development.

2. Evaluate Soft Qualities that Make an Excellent Software Developer:

Curiosity, Creativity, Open-Mindedness, Passion, and Resilience are qualities that create an excellent software developer. Nothing is off limits; talented software developers and coders should be permitted to think creatively. Curiosity is essential to address crucial difficulties, and the greater the amount of curiosity, the better. Everyone should be open to new ideas and engage in discussions about them. People are motivated to work because they care about what they do. It’s also why collaborating with others to create more effective solutions is both pleasurable and simple. A developer’s job carries a certain level of risk. It’s critical to be able to bounce back from setbacks without becoming discouraged.

3. Keep your budget in mind:

Early-stage startups rely on cash to survive. You must be diligent in your spending whether you are bootstrapping or have funding from investors. That includes paying software developers. You don’t have an option except to be picky in your choosing. It’s just a matter of finding the proper people to help you get your app to market as quickly as possible. This entails finding a developer with a lot of experience, especially in developing apps connected to your industry. When your bargaining power isn’t in your favor, the strain of choosing the proper hire within a strict budget is felt. Click here to learn how startups like yours have an advantage with Incentius.

4. Go though the Software Developer’s Portfolio:

Your prospects will have a great work portfolio, which will give you an idea of what they are capable of. The work samples of a software developer will demonstrate what they can do, the standards of their work, and their approach to development. These insights will aid in comparing alternatives and allowing you to thoroughly examine a software developer’s strengths and limitations. Work samples can also help you have a better understanding of what they’ve done in the past and provide useful information to bring up in conversation and future talks.

5. Choose the Type of Developer:

Web developers, software developers, mobile app developers, front-end developers, back-end developers, and full stack developers are all types of developers. Which one would you prefer? Before you begin looking for Developers, you must first choose which type of Developer you require. Developers typically have prior experience in a specific sector, so make sure you employ someone with the suitable skill set for the job.

6. Enlist your Requirements and Specifications:

Every organization is different, and the type of collaboration (Hire/Outsourcing) you need to make is no exception. Take some time to consider why you need a software developer. Are you launching a new app idea and need software developers to create a minimum viable product (MVP) quickly? Or are you looking for iOS developers to help you publish an app on the App Store? Some startups may already have a core development staff working on their products, but they may require the addition of fresh technology expertise. The type of developers you require will be determined by your list of criteria. It’ll help you figure out where to begin your search and how much you’ll have to spend for their services.

7. Keep in touch with your developer:

Ascertain that you can effectively communicate with the outsourcing company or the software developer. The necessity of communication between you and your client cannot be overstated. Communication is one of the most important elements to consider whether outsourcing or employing professional software developers. They must be available to speak with you every day, ideally at the same time each day, to keep you up to date on their progress. Request a phone conversation or a meeting to learn more about their communication style and see if you’re a good fit. Quality is improved via effective communication. You avoid the possibility of misconceptions that could otherwise jeopardize your project by guaranteeing continuous contact between you and your software developer.

8. Have Clarity on the project’s scope:

Companies frequently seek out software development solutions, but if the project scope is not properly defined, there may be issues in the long term. Make sure you have a clear idea of the project scope before hiring someone to do your job so you know exactly what you’re getting. Know clearly what the scope of the project entails. Make sure to be really specific. This will save you time later on in the project when it comes to haggling about fees and timelines with the software development outsourcing companies.

Incentius’ Approach to Assisting Companies With Their Development Needs

Incentius has been assisting organizations in developing their projects for years. We have a tried-and-true process for guiding startup founders through the process of understanding their needs and putting their ideas into action. We begin by obtaining the client’s needs and assessing the project’s complexity. Our team then translates the requirements into tasks that can be completed. The jobs are divided down into sections and given to our team of developers. We’ll have a lengthy talk with the client once we have a firm plan. Developers at Incentius are regarded for being forward-thinking when it comes to offering suggestions and feedback. This was clear in our dealings with all of our clients. For your organization to succeed in obtaining ideal development services, we understand that proper evaluation and selection of developers on your part is critical. As a result, choosing the correct partner to accomplish the work to your specifications and have a comparable working culture and strong ethical standards is critical. You can get more ideas about Incentius by looking at our portfolio page. Click here to reach out to us.

Top 5 learnings from implementing machine learning for Startups Amit Jain June 7, 2022

Companies are working on cutting-edge technologies for creating machine-learning models as well as gathering and handling the massive volumes of data required to train them. It hasn’t always been easy, and it will never be. Although there are dangers associated with innovation, we are confident that Machine Learning is here to stay and will alter societies in the same way that the cell phone did.

The top five takeaways if you plan to implement Machine Learning in your Startups are as follows:

1. Ensure Expert Supervision:

The right team is essential for selecting the right machine learning use case and ensuring the project’s success. If all involved parties are engaged in the decision, everyone is more willing to approve, implement, and resolve issues, which will eventually help close cultural gaps.

 When data scientists collaborate in silos, the machine learning models they develop are very seldom used. Platforms only serve as collections of tools for data analysis and model development. Startups still require a seasoned data scientist to discover features, figure out the model, and select the best validation method. People who excel at both engineering and mathematics are tough to locate and costlier to employ. The idea of combining a data scientist and a machine learning engineer is brilliant. The data scientist is responsible for feature engineering, model creation, and testing, while the engineer assists with the workflow and extraction algorithms. 

If you’re not sure you have the skills needed to construct a full-fledged machine learning algorithm, you may always seek advice from companies with machine learning expertise and experience.

2. Affordability Analysis is Crucial:

Smart organizations know how important it is to take data-driven decisions. And a lot of data needs a lot of storage. So, how to manage the business model that includes costs of data storage? Thus, cost analysis of the alternatives is essential before making a decision. 

Additionally, if you want to implement machine learning, you’ll need Data Engineers and Machine Learning Engineers with strong technical experience. A full data science staff is out of reach for start-ups. Budgets appear to be a common challenge. When competing with large global corporations, mid-sized groups may not always be able to afford to offer specialized wages. They urgently demand technology, unlike smaller businesses, yet are expected to keep up with larger businesses’ pay Consequently, mid-sized businesses state that budget constraints are holding them back.

3. Patience is the Key:

You can’t tell how long a problem will take to solve or even if it can be solved. Nothing irritates a startup’s business side more than a machine learning engineer who consistently underestimates time needs. Patience will go a long way toward ensuring that your efforts are rewarded. This is especially true in the case of machine learning. Impatience is one of the most typical machine learning issues.

A machine learning project is typically fraught with unknowns. It entails obtaining data, processing it to train algorithms, engineering algorithms, and coaching them to learn from data that is relevant to the goals of your startup. It necessitates a great deal of meticulous planning and execution. However, due to several layers and the inherent uncertainties in algorithm behavior, your team’s statistics for completing the machine learning project is not guaranteed to be accurate. As a result, when working on machine learning projects, patience and an exploratory mindset are essential. Allow plenty of time for your project and team to accomplish desired results when implementing machine learning.

4. Data Availability and Security is a Must:

The gathering, security, and storage of data is a significant barrier in the deployment of machine learning. It’s true that putting in place the correct data collection technique is perhaps the most difficult task you’ll face. 

Users turn to machine learning for predictive analytics, and the first step is to eliminate data fragmentation. Companies must have access to raw data in order to utilize machine learning. To train machine learning algorithms, large amounts of data are required. A few hundred items of data is insufficient to properly train models and execute machine learning. 

However, data collection isn’t the only issue. You must also model and process the data in order for the algorithms to work. One of the most common concerns in machine learning is data security. Security is a critical concern that must be addressed. To execute machine learning accurately and efficiently, it’s critical to distinguish between sensitive and insensitive data. Companies must store sensitive data by encrypting it and storing it on different servers or in a completely safe location.

5. Challenges with Model Deployment:

To implement machine learning effectively, one must be adaptable with their infrastructure and thinking, as well as possess the necessary and applicable skill sets. Startups must have a thorough understanding of data flows, algorithms, and how they may be applied to various operations in order to successfully implement machine learning. 

Machine learning provides a platform for firms with machinery and equipment to predict preventative measures and potential faults in the manufacturing area. To characterize the usual functioning state, the specific algorithm must be observed. If one of the machine learning tactics fails, the organization is able to learn what is required and, as a result, is guided in developing new and more powerful machine learning designs. The ability to adapt to setbacks and learn from them improves a company’s chances of implementing machine learning successfully.

Conclusion: In a word, the entire transition not only takes time, but it is also a bumpy ride. The choice of features employed in a machine learning project can often determine its success. When good representations, or features, of input data are available, machine learning has made significant progress in training classification, regression, and recognition systems. However, a lot of human effort goes into creating good features, which are frequently knowledge-based and developed over years of trial and error by domain experts. 

Modern Database Management Best Practices Amit Jain May 20, 2022

As the volume of company data has increased, database management has become increasingly critical. Rapid data expansion causes a slew of undesirable outcomes, including poor application performance and compliance risk, to mention a few. 

Database management entails a variety of proactive strategies for mitigating the negative consequences of data accumulation. Database Management is the process of organizing, storing, and retrieving data from a computer. It may also refer to a Database Administrator’s (DBA) data storage, operations, and security procedures throughout the data’s life cycle. Organizations may prevent events that impair productivity and income and increase data integration for more business intelligence by controlling data across its full lifespan.

1. Draft Relevant Business Goals:

A strong data management vision, clear targets, well-defined metrics to assess progress, and a solid business purpose are all part of a well-developed data strategy. There are a plethora of other things you can do with your data, but it’s critical to start by defining your objectives. If you know what your business goals are, you can keep just the data that is useful to the organization, making database maintenance a breeze. It’s critical for your DBAs to understand the plan for the data they’re collecting and to concentrate entirely on the data that’s important to the company’s overall objectives. 

Your company needs should be reflected in an executable, focused database management plan, as well as the metrics you’ll use to measure your performance. Knowing your company’s business objectives allows you to maintain only the data that is relevant to your company, making database maintenance and administration easier. Setting meaningful company objectives is the very first practice you should consider because it offers you a guiding light so you don’t get lost.

2.Clear Policies and Procedures should be crafted:

When implementing best database management practices, you must establish rules and processes for your database settings. Creating particular backup and recovery processes and regulations allows your team to respond more quickly in the event of a disaster. Standard methods for deleting old files, conducting maintenance, and indexing files should be included in policies. These standards limit the risk of misunderstandings or errors, which is especially crucial in bigger businesses with various datasets and database managers.

Data should also be verified for correctness on a regular basis, as obsolete data might be useless to your organization. Most significantly, having explicit policies makes database maintenance and day-to-day management much easier. Lastly but not least, rules should contain procedures for erasing data and securely destroying storage media such as hard disks and servers.

3. Ensure High Standard of Data Quality:

Data is the King you do not want to mess with. Or as they say today- Data is the new Oil. Your DBA should try to maintain a high level of data quality by eliminating data that does not match the criteria and adjusting quality standards to reflect your evolving strategy. Even if they don’t work directly with the DBA or the database, everyone in your firm should understand the principles of data quality protection. Someone who is unaware of the dangers of duplicating data might add to your team’s workload. 

Teach everyone how to submit high-quality data and how to recognise good data. Train all team members who have access to the data on the right procedures to gather and enter data to help your team focus on data quality. You must set clear goals for improving data quality using relevant and quantifiable metrics. Make sure the stewards are included in the process when data managers develop objectives. These database management practices pay a lot in the short as-well-as long run.

4.Data Security and Backup must be a priority:

When it comes to database management in your company, data security and backup are key responsibilities. There are never enough backups when it comes to data. It’s critical to have a reliable backup system in place and to keep an eye on it to make sure it’s working properly. Furthermore, in the event of data loss or corruption, every organization should have a disaster recovery strategy in place. Because disasters can happen, it’s critical for your company to have a data recovery policy in place. 

Although no disaster can be completely predicted or avoided, you can strengthen your database’s data security and manage the risks associated with worst-case situations. If or when a possible breach occurs, having a strategic process in place is critical. Security concerns evolve in tandem with technological advancements, corporate expansion, and database features. Your staff should keep current with the market and seek to anticipate the demands of your database.

Here’s your Takeaway-Use Quality Data Management Services!

Choosing appropriate services is a crucial step in establishing a high-quality data management system for your business. Keep in mind that the ultimate objective is to have a modular architecture that can connect to and structure a number of data sources and analysis methods from the start. 

This is when Incentius comes into picture. You want to locate a customer data platform that will provide you with a truthful and concise view into your connections and user data, as well as the ability to communicate with your market precisely and promptly. You want your data management system to make your tasks simpler by automatically enriching and cleaning data to guarantee you have the most comprehensive and full picture of your data. We are here, consider bothering us for it.

A fresh outlook on the challenges in the Sales Compensation Management space by Elliot Scott Amit Jain October 8, 2020

 

2020 has really been a difficult year due to the corona pandemic and several other natural disasters. This has brought never seen challenges to the fore. With COVID-19, the sales environment has shifted because of social distancing and isolation norms resulting in a lack of in-person access. New modes of stakeholder engagement are leading to an impact on all aspects of sales operations. Managing, motivating, and ensuring remote sales forces are effective and engaged during such a period is a challenging proposition. Additional complexity is arising from the fact that different parts of the countries are following significantly different infection and recovery trajectories resulting in further need for local adjustments. Sales operations teams are constantly striving to keep up with this challenge by adjusting their sales incentive plans to manage the impact on sales personnel. Therefore, I have invited Elliot Scott for this interview to share his perspective on trends and challenges related to sales compensation management in different industries.

Elliot Scott is a sales compensation and sales effectiveness consultant and the owner of Elliot Scott Consulting LLC. He has over 20 years of sales and marketing consulting experience, focusing on sales compensation plan assessment, design, communication, and modeling (for both domestic and international clients), sales organization and job design, quota setting, sales force sizing and deployment, benchmarking, and sales productivity analysis. He has worked with well over 100 clients in 40+ industries in the U.S. and globally. Prior to starting his own business, Elliot held senior sales effectiveness and compensation positions at Towers Watson, The Alexander Group, Korn Ferry Advisory, and ZS Associates. Elliot has also authored articles for Workspan, Synygy Magazine, and other publications, and conducted seminars and workshops on sales compensation and related topics at professional conferences in the U.S., Asia, and the Middle East. He has an MBA with honors from the University of Chicago and a BA from Dartmouth College. He can be reached at escott@escottco.com.

Amit: If we keep the current pandemic situation aside, at a broader level how has the sales compensation landscape changed for several industries such as insurance, high tech, manufacturing etc. in North America?

Elliot: Over the past several years, business circumstances, the sales process, and sales roles have evolved in important ways, and sales compensation has been challenged to keep up with the changes. For example:

  • Shift to Subscription Revenue Models: Almost all industries along with the software industry are experiencing a dramatic shift to selling many products as a service (XaaS). The value of a sale may be uncertain at the time of sale and the revenues come in over time. This makes it extremely challenging to find the right metrics to use for measuring & rewarding sales performance. The role of the salesperson is to find and close new business and quickly move on. Ensuring that the product is fully utilized ultimately resulting in maximizing the revenue often does not fall under their responsibilities. So, there are two ways a sales compensation plan can be designed:
  • Paying based on the estimated value of the contract, OR
  • Paying based on the revenues over time
  • The first plan is motivational and encourages the salesperson to quickly move on to the next sale, but the second plan ensures that the salesperson will be accurately compensated for the full value of the sale. The challenge with the second plan is that it is less motivational and keeps the salesperson hooked with the account for a longer time which detracts from new business selling. In striking the right balance between the two plans, companies use a variety of schemes, including true-up calculations to previously estimated sale value and commission rates that decline over the length of the deal.
  • Greater Access to Information: There are many dimensions to this change. One is that buyers can move much further along in the sales process before engaging with a salesperson. Detailed specifications, demos, reviews, and up-to-the-minute pricing can be accessed online, all at the click of a button. This puts a premium on marketing agility from solution provider’s standpoint. Having said that, it moves some of the responsibility for prospecting, qualifying, performing needs assessment away from the sales organization. Furthermore, younger buyers increasingly prefer to buy using apps and online tools rather than by engaging directly with salespeople. Being adept at using online tools, greater use of inside sales & account management & hybrid sales/marketing roles are some of the implications towards crediting the sale. As a result, non-revenue measures, e.g., qualified leads, team measures are proliferating leading to downward pressure on pay mix, as it becomes difficult to objectively track individual performance.
Amit: What would be the key challenges faced by different industries in the future? With COVID-19, the sales environment has shifted because of social distancing and isolation norms resulting in a lack of in-person access. What are your thoughts on this?

Elliot: While COVID-19 has significantly lessened the emphasis on in-person selling, two things remain true:

  1. In many industries, particularly those selling to small and medium businesses, customers still value their relationships with salespeople. And salespeople know that if they do not pay attention to their customers, they will buy elsewhere. Customer access will remain important, so the challenge is to find new ways to maintain it. Free calendars and pens are declining in importance, but value-added services like free software and training, or sponsorship of events or popular causes, may be of increasing importance. Although building relationships with customers is “old school,” salespeople who can leverage technology to add value will have more chances to exercise their charm.
  2. As a sales effectiveness consultant for over 20 years, but not a salesman myself, I have long seen that there is such a thing as sales talent. There are some people who, as they say, can sell ice cubes to Eskimos, and sales organizations that can attract and motivate them will continue to do well. I once did a project for a new sales organization selling telecommunications services, over the phone, to small businesses. A full 6 months after launch there was one salesperson (out of 20) who was responsible for 50% of the sales! So, regardless of the sales process and the difficulty of designing a fair and objective incentive plan, companies will continue to need sales compensation plans that can attract and reward talented sellers.
Amit: How are different organizations coping up with the pandemic and what are the measures taken by them on the sales compensation side to ensure that plans continue to be motivating, fair, and fiscally responsible?

Elliot: The pandemic has wreaked havoc with sales organizations. In-person access to customers has declined severely and demand has departed markedly from historical trend. A recent CPG client that sells coffee to both restaurants and supermarkets, with two equally sized sales forces, suddenly found business crashing in one segment but soaring in the other. In the restaurant segment, revenue goal attainment became impossible and in the supermarket segment, everyone was going to earn well above target. While managing this under- and over-payment situation was a problem, the larger problem was resource allocation. Even with all the valuable pre-sales activities the restaurant sellers might do, much of their time was better used serving an entirely different segment. Perfectly calibrating goals and plans to accommodate this dramatic change and uncertainty is impossible. So financial motivation in the form of individual pay for performance had to take a back seat to fairness and fiscal responsibility. Fortunately, the incentive plans for the company were already capped (something generally to be avoided but sometimes necessary) and had at best a moderate level of incentive opportunity. While this had likely hurt them in the past, it made it less of an impediment to resource allocation.

In this pandemic, many companies believe they have additional leverage over their salespeople, knowing that it is hard to switch sales job when industry revenues are declining, and some have responded by cutting payout rates dramatically. At the same time, businesses do not want to drive their highest performers away when business picks up. This has led to proliferation of individualized compensation arrangements.

Amit: What has been the most frequently used approach/measure by organizations to deal with this situation? Are organizations moving towards paying at target, adjusting goals, moving to longer performance periods, or something else altogether?

Elliot: Most sales organizations recognize that paying everyone at target will undermine motivation and performance. This is less the case with inside or online sales organizations, where activity is more easily monitored and taking the day off cannot be kept secret. Most companies have taken more sophisticated approaches that touch multiple dimensions of plan design: lower mix with partial guarantees, changing performance measures to increase the weight of MBOs and non-revenue measures, lowering thresholds and flattening payout curves, and, yes, adjusting goals. Adjusting goals is tricky, particularly when the impact of the pandemic on the overall forecast remains unknown. The objective of the exercise should be to preserve the distribution of performance and pay so that higher performers earn more than lower performers regardless of absolute levels of goal attainment. Think of it as grading on a curve, driven by input from sales, finance, and human resources, and communicated as openly as possible._

Amit: How do you see sales compensation solutions evolve going ahead? How will the sales compensation need of organizations change in the future?

Elliot: The increase in the amount of available data, the decrease in the ability to effectively measure individual sales revenue at the time of sale, and the proliferation of hybrid sales/marketing roles will continue to drive underlying complexity in sales compensation programs. Performance measures like product usage, or even time spent on multiple pre-sales platforms, are increasingly available and may be better aligned with salesperson effectiveness than more traditional measures. So, the data used to measure and pay on sales performance will become more diverse, as has happened in more technically sophisticated organizations. But complexity undermines line of sight and sales motivation, so the challenge will be to harness this data and use it in plans that remain simple, easy to understand, and objectively and reliably measured.

Amit: What would be your recommendations to organizations using old-world legacy systems or are still working off Excel workbooks?

Elliot: While SPM vendors are unable to pronounce “spreadsheets” without sneering, most sales organizations, and particularly smaller ones, use them exclusively to administer their sales compensation plans. And for some, they work well. But as businesses grow, complexity can quickly overtake the ability of spreadsheets to manage changes efficiently. Spreadsheets can generally calculate payouts for any plan, but they are not at all optimal for managing changes to underlying data. When changes in reporting relationships, titles, targets, pricing, products, and distribution become more frequent, spreadsheets become unworkable without a large team of administrators. On top of it, when manual data entry is involved, they are more prone to human error, which also increases with complexity. It’s a truism that your salespeople will catch these errors…but only those that are not in their favor!

An under-appreciated advantage of SPM over spreadsheets is its ability to provide impactful, accurate, and timely reporting to both the salesforce and management. I know of no situation where spreadsheets can match SPM in this regard. Knowing how you are performing can be almost as motivational as the incentive earnings you receive at the end of the performance period.

But there are two things that have consistently made SPM implementations less successful than their vendors would have you believe. The first is that they are often very costly. Not only can the cost of the software be significant, but there can also be an enormous implementation cost, not to mention the cost of professional services to manage plan changes, which vary from application to application. The second is that once implemented, the software does not seem to work properly, not because of bugs but because important details fell through the cracks in the implementation process. My advice to companies contemplating SPM implementation is first to look carefully at all the costs, current and projected, and expect that they may be higher than projected. Second, do not underestimate the challenge of successful implementation. Setting up and testing all the data feeds properly, with internal subject matter experts who understand not only the data but what can go wrong, is critical and may take longer than you plan. If you pay a lot of money for a large SPM implementation, find it doesn’t work, try to fix it and fail, and ultimately write off the investment, you will not be the first company to do so.

Amit: Do you think the SPM solution industry is well placed to explore the market potential or are there areas that they need to work upon? If Yes, what would those areas be?

Elliot: The SPM industry has been successful and continues to grow. It certainly is not going away, and as with Salesforce.com, the capabilities of SPM solutions have increased a great deal over time, driving adoption and reach within customer organizations.

A recent trend has been for SPM providers and integrators to tailor their solutions more closely to individual industries. It may not be that the software needs to differ significantly between industries, but the data feeds and the relative importance of them can differ from industry to industry. Likewise, user interfaces need to be intuitive and industry-specific. SPM providers and implementers have done a good job tailoring their marketing by industry, but the tailoring of the products and implementations needs to catch up.

As a consultant who specializes in helping companies assess and design their sales compensation plans, it has long been puzzling that SPM providers and implementers have not yet driven me out of business. If they want to be full-service providers, they cannot ignore the critical importance of plan design. Traditionally, plan assessment and design work has been seen by the SPM industry as a delay or roadblock to sales. They may tell customers that they can help them with that work, but most have not built the capability. For one thing, a high percentage of services revenue may undermine the market value of software companies, and it is true that design + implementation does take more time than implementation alone. But without well-designed plans, SPM customers will not get full value from their systems. I am fine with that because then those customers will call me. But in the long run, it may be a missed opportunity for the industry.

Amit: In conclusion, we can say that this unprecedented period has forced organizations to do some rethinking on their overall sales compensation management philosophy, but their choices have been constrained due to limitations of their legacy systems. The new selling structures and additional behavioural changes may require the introduction of a new thought process that can be combined with the new-age technology ecosystem. This may allow companies to innovate in their sales compensation philosophy while significantly improving their operational efficiency, payout quality and timeliness, adherence to process compliance and overall motivation of their salesforce.

Thank you, Elliot, for taking time out and talking to us on such a strategic and complex subject. I am confident that your ideas will help readers, deep-dive, into their sales compensation plans while also re-evaluating their sales compensation solution ecosystem to use that as a competitive advantage.

What has been your experience with challenges related to Sales Compensation Management? How are you dealing with your sales incentive plans during a pandemic? Feel free to reach out to us at amit.jain@aurochssoftware.com / sumeet.shah@aurochssoftware.com in case you have any questions or to talk about your current challenges and bounce off any ideas with no strings attached.

13 ways to reshape sales compensation plans during a pandemic Amit Jain September 23, 2020


2020 is turning out to be one of the worst years in the recent history with significant impact on the global economic health. The primary reason for this has been restrictions imposed to contain the spread of Corona pandemic while there have also been several localized natural disasters in different geographical areas that has further worsened the situation.

With COVID-19, the sales environment across industries has shifted to virtual selling resulting in a lack of in-person access and physical time. Organizations have tried to take this problem head on and have implemented several digital platforms and channels to continue to engage stakeholders despite of physical restrictions. Managing, motivating, and ensuring remote sales forces are effectively engaged during such a period has become a challenging proposition.

Organizations are actively working towards assessing the level of impact on their business while working towards short-term and long-term measures to adapt to the “new normal”. Incentives make up the significant portion of total compensation and reduced sales due to unforeseen circumstances may see a huge drop in total payout leading to a risk of lack of engagement and attrition of high performers. This has forced sales operations teams to refine their sales performance management approaches which has added a new dimension to overall complexity in variable / sales compensation management. Balance is constantly being sought between fairness to sales reps, budgetary constraints, and revenue performance. Moreover, another level of complexity is arising from the fact that different parts of the countries are following significantly different infection and recovery trajectories resulting in further need of local adjustments.

Sales compensation plan design is already a complex process because of a need to consider several parameters such as geographically diverse business environments, company culture, labor regulations, market constraints and innovation, customer engagement and selling process, level of impact and control on sales, data availability etc. The desired plan adjustments further forces organizations to rethink their IC philosophy without compromising on key plan design principles.

Following are some of the key sales compensation plan design strategies and adjustment ideas organizations can deploy in case of such unforeseen situation to ensure that representatives continue to be motivated and engaged while preparing themselves for future growth. These options can be bundled based on specific needs and can be implemented for results in the short-term as well as long-term basis:

1- Pay Target or Better

Pay target sales compensation to affected sales, service, and support representatives for the most impacted period where-in they are not able to achieve their targets. Organizations can also choose to go beyond and allow high performing reps to earn more if they manage to beat their targets despite prevalent economic turmoil. This reinforces organizations commitment towards outcomes without compromising on their employees’ well-being and keep them motivated and away from any distractions

2- Guarantee / Draws

Pay a fixed % of target sales incentive, guarantee amount or a non-recoverable draw for the impacted period to strike a balance between field motivation and fiscal responsibility. Organizations can also choose to go for recoverable draws where-in incentives are paid upfront and adjusted once sales have picked up. Like “Pay Target”, guarantees and draws instill sense of security and keeps salesforce motivated and away from any distractions

3- Performance Period Adjustment

Increase the performance period timeframe to ensure that the sales representatives get an opportunity to make up for the lost opportunities by putting in additional efforts in the latter part of the performance period. In certain cases, organizations may decide to reduce the performance period to contain the impact within a shorter period

4- Revising Commission Rates & Introduction of Payment Accelerators & Kickers

Organizations can choose to temporarily increase commission rates or positively revising kickers and accelerators (telecom and insurance) to boost sales representatives’ earnings. On the lower side of the spectrum they can choose to remove or ease decelerators to ensure performance earnings are positively reinforced for sales and deals closed during the impacted period

5- Re-balancing KPI metrics & weights

Reviewing KPI weights and balancing them out to align with emerging business needs like an increased focus on customer centricity. Customer centricity and customer success helps organizations and particularly sales representatives to temporarily move away from the product mindset and focus more on customer well-being which in process helps in developing long-term relationships

6- Goal Adjustments

Provide relief by adjusting quotas down to account for activity and market challenges. These adjustments also need to be tracked for future goal setting to ensure that appropriate baseline adjustments are made once business gets back to normal. Organizations can also choose for goal adjustments specifically over guarantees and other direct pay adjustments as these are pro-rated and aligned with actual performance impact at individual level. This also helps from annual computation standpoint as organizations are saved of any true-ups, retro calculations, and plan updates to account for the impacted period

7- MBO type plan

Pay incentives based on specific activities instead of outcomes to keep the engagement high while ensuring that existing relationships are being maintained remotely and sales pipeline being created for the future

8- Team Performance

Explore options of teaming up sales forces across product / business portfolio to encourage and explore cross-selling and up-selling opportunities

9- Relative Performance

Index territory or individual performance within broader impacted area or complete market to factor in local variations as a part of rationalization of performance

10- Payout Curve Modifications

Lower performance threshold or ease out qualifier metrics like past dues, retro collections (manufacturing), removal of penalties (channel distribution) to allow reps to be “in the money” at lower performance levels (know more about payout curve designs)

11- Pay Mix Change

Change pay mix to reduce the proportion of incentives in the total compensation. While this is a complex and long-term solution, organizations can leverage the opportunity of looking at the overall compensation structure and modifying it to align with changing selling environment in the longer term

12- SPIFFs

Give higher leverage to spiffs & seasonal contests. Avoid including peak COVID impacted performance during calculations. This allows reps to make up the lost opportunity cost by cashing in more during festive seasons or seasonal sale spikes

13- Annual Trip/President’s Club

Provide cash out option for annual trip or at least postpone it indefinitely unless situation is more conducive to travel

To summarize, organizations are evaluating the situation based on their product portfolio, selling environment, sales process complexity, and level of impact, and are deploying different adjustment strategies. Organizations are trying to leverage and analyze data across periods to better understand overall impact and utilizing this information to take fair decisions. We do believe that sales incentive plans can be designed to be reasonably stable, motivating and fiscally responsible. There are inherent counteracting pressures between these design principles with significant complexities being added due to such unforeseen situations but with the help of comprehensive data analysis and leveraging market intelligence appropriate steps can be taken which ensures that sales incentive plans continues to be motivating and engaging.
Please feel free to reach out directly to us at amit.jain@incentius.com to know more on how you can leverage our advanced analytical expertise to take data driven decisions and stay ahead of the curve.

How to design and analyze market intelligence surveys Amit Jain December 5, 2017

Every organization irrespective of the industry at some time or the other wants to conduct a survey (either internally and/or externally) for various reasons around gathering information or collecting feedback. Some of the common reasons for conducting surveys are:

  • Salary benchmarking
  • Proposed Change Buy-In
  • Change Feedback
  • Customer Feedback
  • Demographic Information Collection
  • ……

This entire survey deployment, data collection, data transformation, data analysis and reporting is a combination of art & science. Surveys are generally deployed for very specific objectives and are very contextual in nature.

Survey Design

Designing a survey is a systemic process which involves some key elements:

  • What are the key objectives/goals of the survey?
  • Whom should be targeted to gather information/feedback?
  • What channel will be used to conduct the survey?
  • What is the deployment timeline?
  • What is the follow-up plan of action?

It is important to design questions which are focused and have potential to engage the respondents. The survey right at the start should clearly mention the objectives and also highlight the time commitment from the respondents so that they get to plan their time accordingly and may decide to get back later if required. One important factor to consider while designing individual questions is to ensure that they are not leading. The questionnaire flow and individual questions should help respondent to deep dive into stated objectives and should help them visualize the potential actions.

Response Data Transformation & Analysis

The objective of conducting a survey is to gather useful and reliable data in specific layouts/visuals which can help draw conclusions / take decisions about the stated key goals. It is important to clearly define what data is needed. It’s equally important to define upfront the format and layout of the output data so that the appropriate steps can be designed and implemented to transform response data into a right layout for further analysis and reporting. As part of this step, ground rules should be set on what data will be used and what will be discarded. Some key rules that need to be defined:

  • How will missing responses be handled?
  • Is there any minimum number of responses required before data can be reported for any specific question?
  • Are there questions or responses from specific roles which will be weighed more as compared to others?
  • What kind of data to be reported from open-ended text questions?
  • Is there any type of data clubbing required or dependencies needs to be considered as part of analyzing responses to different questions?
  • What kind of QA framework be used to ensure output data quality (Data Completeness, any additional exception rules, text field summarization)?
  • How to use output of nominal responses?
  • ……

There are several ETL tools which can be used depending on the complexity and volume of data that needs to be dealt with. Some of the commonly used tools are Excel, Talend, Python etc.

Response Reporting

Interactive Visualizations helps in better understanding the responses and can support the decision making process. There are different charts/graphs which can be created to visualize responses for different types of questions:

  • Frequency Histogram to showcase the variation in choices for different respondents
  • Use a pie chart to demonstrate percentage of respondents selecting different type of responses for same question
  • Stack Charts to demonstrate incremental rate of responses
  • Geographical displays to showcase biases/variations in responses
  • Tables to summarize descriptive statistics for numerical responses
  • ……

Use heading for each of the graphs and tables that capture the essence of the visual. Commonly used tools for this purpose are R, Excel, Python, Tableau, Qlikview etc

Conclusion

Finally, it is desirable to call out what do the survey results mean? Why do the findings matter and how are they tied to survey goals? The conclusion should answer all of these questions. The conclusion should be able to summarize the entire survey process from the formulation of survey goals up to the final actionable outcome.

There are some key elements which needs to be considered while writing an effective conclusion:

  • Focus on tying the outcome of survey analysis with the goal
  • Should be synthesis of the survey result along with the summary of the entire process. It should clearly highlight the course of action associated with the initial objective. Arrange ideas in a logical order
  • It should be written as a matter of fact manner with an academic tone
  • Call out any other data sources that are being used for the purpose of this survey
  • Include information about the quality of results such as standard errors, confidence intervals etc.

Have something to add to this post? Please share it in comments! Drop me a mail at amit.jain@incentius.com in case you would like to talk live. We at Incentius would be happy to act as a friendly, informal “sounding board”. We can offer an ear and views based on our years of experience working in this area, and can also help with some ideas, contacts and solutions.

A framework to design your salesforce incentive compensation plans Amit Jain May 26, 2017

[Image Source-www.flickr.com]

Incentive schemes act as a strategic tool to align salesperson’s behaviour with business objectives. It acts as a catalyst to motivate the salesforce. Incentive Compensation is the primary tool to differentiate between salespeople based on performance and helps retain top performers by clearly calling them out. It also plays a significant role as part of the total compensation structure and acts as a lever to attract top talent.

Guiding Principles

What are the guiding principles that drive the structure and definition of an incentive plan?

  1. Is it aligned with the desired business objectives? For example, does the plan drive the right customer segments to be targeted?
  2. Does it pay for performance? For example, are the salespeople being paid for activity only or for capturing market share/volume growth?
  3. Is it fair insofar as it provides equal earning opportunities to all salespeople irrespective of their geography, market potential, etc.? For example, are the salespeople with larger geographic territories inherently at an advantage?
  4. Is it financially responsible? For example, Is the final payout expected at the national level in line with the expected achievement with respect to the national forecast?
  5. Is the pay competitive in the current labor market? For example, does it retain top performers?
  6. Is the plan easy to understand for the sales force? Can this plan be executed using existing IT infrastructure and can a fully automated process be defined for successful operations?

There are inherent counteracting pressures between these guiding principles.

  • Need for the incentive plan to be simple to understand but also remain fair
  • The Incentive plan should be engaging but at the same time it should be financially responsible
  • The Incentive Plan should support underlying business objectives but at the same time be manageable
  • The incentive plan should be implemented with flexibility for future needs but the implementation should be fast and cost-effective

Design Framework

Given these guiding principles, what design framework components are important to consider while defining an Incentive Plan?

Total Target Compensation

How much should a salesperson be paid in total? What should be the total compensation structure including base salary and potential incentive payouts? The organization’s compensation philosophy, in general, has a large bearing on this element. Defining the TTC depends on how much the organization weights compensation as part of its value proposition to its employees. It is also important to review industry TTC benchmarks for competitiveness and clearly define the organization’s desired market position. This will help ensure that organization is able to attract and retain the right type of people.

Salary-Incentive Pay Mix

What should be the ratio between base salary and incentives viz. the pay mix? The pay mix depends on the extent to which the salesperson is responsible for the final sale. For eg. Real Estate agent pay mix leans towards higher incentives because the sales are almost fully determined by salesperson capability. Sales Support roles usually tend towards having a higher base salary in the mix because of their lower ability to impact the actual sale. Organizations that don’t have adequate availability of data or confidence in the measurement of performance also tend to weigh incentives less. The pay mix should ensure that the total expected compensation remains motivational and yet financially responsible. The pay mix also plays a big role in signaling the type of salespersons to attract to that role.

Portfolio Definition

What portfolio of brands should you focus on for each salesforce? One may choose to group all brands sold by that salesforce into one basket and measure on that. Alternatively, one may choose to provide one incentive scheme to certain key brands that need special focus and one incentive scheme for all brands sold by that salesforce. Some organizations may choose to focus on certain individual brands sold as well and measure each brand’s performance separately to maintain higher focus. The portfolio definition decisions are driven by the organization’s business strategy, the brand focus they’re hoping to achieve. Fine-tuning portfolio definition helps sharpen the focus on which brands the organization wants to push more.

Performance Metric Definition

Once portfolios have been appropriately defined, the next step is to define the metrics that define performance. What are the KPI’s that the business manages around and how can those KPIs be rolled down to sales performance metrics? Should a combination of metrics be used? The metric should be chosen such that it supports the desired business strategy. Factors that affect the type of metric chosen are the sales channel, the reliability of sales data and brand maturity. Ideally, one incentive plan should have no more than three plan metrics. A good metric should be clearly measurable and specific with significant weight associated with it (>15% of total target). There should be clear guidelines in terms of expectations from primary product as compared to other products in the portfolio. For example, a growth stage brand may be assigned a volume growth metric but a mature brand may be assigned a volume metric based on the organization’s business objectives.

Plan Type Selection

What sort of an incentive scheme should you choose? Should it be goal-based to measure against predefined targets? Should it use a matrix type scheme type to measure performance against two metrics simultaneously? The selection should be based on the organization’s specific needs and the way it prioritizes the different guiding principle. For e.g – fairness vs. simplicity, motivation vs. financial budget. Other factors that need consideration such as data reliability, confidence in national sales forecast, variation in territory potential etc. For example, if the confidence in national sales forecast is low, a goal-based scheme is not ideal. If variation in territory potential is high a commission against volume plan type is not ideal.

Payout Curve Definition

What should the design of the payout curve assigned to the component? Curve aspects like the threshold, cap, kickers and multipliers should be considered? For example, Does your organization believe in paying incentives starting at 80% target achievement or only at 100% target achievement? At what performance should you consider a multiplier to motivate top performers more? How would my curve perform financially against an unexpected higher national performance? Should I cap top performer payouts at a point to guard against outlier performances? Industry standards also play a role to some extent in defining the upside and downside risk depending on organization’s market positioning.

Performance Measurement Period Definition

The incentive period definition also plays an important role in incentive plan design. What is the measurement period I should use for my incentive plan – Annual, quarterly or monthly? How often should I pay my reps? If a rep underperforms in earlier months, should I offer a chance to catch up by the end of the year? When should I run incentive calculations with respect to the end of the measurement period? These depend mostly on data reliability, expectations from the salesperson, system capability and the importance of meeting shorter-term national forecasts vs. annual national forecasts. Another important factor to be considered is the application of interim payout caps in case the performance measurement period is larger than the payout frequency.

All the above attributes play a significant role in the overall success of an IC plan. The qualitative impact of an ineffectively designed plan is well recognized but companies fail to take into account the financial implications (of increased attrition rate, lower morale, lost selling opportunity due to higher shadow accounting and dispute resolution time, higher administration cost) of poorly designed incentive plans and don’t put enough emphasis into balancing the inherent counteracting pressures in the guiding principles.

Tracking customer inter-relationships can be a competitive advantage Amit Jain March 21, 2017

 
Tracking customer inter-relationships can be a competitive advantage

Customer Hierarchy management is of key importance to organizations. This information may be available to HQ through third-party data sources, however, it is important to corroborate this information with the help of various other stakeholders within the organization who are responsible for managing the relationship with these entities.

A web-based multi-level hierarchy management interface is desirable to manage such a customer hierarchy. Such a system must have the capability to upload master lists of various entities at all levels of the hierarchies, allows for quick reassignment capability across hierarchy levels and intuitively supports multi-assignments. Additionally this system must be able to track each change made to the hierarchy, provide detailed analytics to internal stakeholders, provide a high level summary of entities pending review to support the customer hierarchy review process.

There are several potential applications for such an interface in different industries. Some of these are:

  • MD-Hospital-Organization-Network affiliations for the Healthcare Industry
  • Advisor-Team-Organization affiliations for the Asset Management Industry
  • Reporting relationships for unstructured/indirect sales channels
  • Stockist-Distributor-Retailer relationships

Let’s delve into more detail with the help of an example from the healthcare industry. With the evolution of the industry in last few years, it has been observed that the majority of blockbuster pharmaceutical products have gone off-patent while primary focus has been moved to commercialization of specialty products. There is also a movement towards consolidation in the industry with several single MD practices being brought under larger the formularies of larger chains to improve purchasing power. This paradigm shift has resulted in increased importance of gathering field intelligence to better understand the various relationships between stakeholders in the customer ecosystem. Some of these are:

  • Prescriber – Prescriber (Key Opinion Leader)
  • Prescriber – Account
  • Account – Organization
  • Organization – Specialty Networks
  • Nurse Practitioners / Clinicians – Account

Our hierarchy management system offers capabilities to track such multi-level hierarchical entities and manage the relationships between them. It also allows for key attributes of such relationships to be captured such as primary affiliation, influence levels, types of relationships, etc. The intuitive UI allows field representatives to quickly and easily manage their target prescribers and review all their relationships to ensure accurate alignments. Accurate alignments are essential to achieve accurate sales credits, marketing promotion targeting, physician outreach programs within a typical healthcare organization. Additionally these alignments allow organizations to gauge the true value of entities in their customer hierarchy and devise strategies to support that entity. Accuracy of these alignments are critical to empower analytics to support such decision making.

figure 1: A sample alignment management screen

figure 2: Hierarchy visualization including sales flow weights across entitiesThe aggregated information at the higher hierarchy level can help organization understand the true value of that entity and devise strategies to support the entity.

Are you converting your localized field intelligence into opportunities? Amit Jain February 21, 2017

 
Increasingly organizations understand the importance of health information exchange and increased collaboration between headquarters and feet-on-street field representatives. Many times data collection and analytics are functions of the headquarters where they either use in-house secondary data sources or third party data sources to perform analysis, share market insights and create an action plan for the field representatives. Once the field receives this information, there is a constant tussle between both the stakeholders due to several reasons:
  • Credibility of input data sources
  • Lag in data collection process
  • Discrepancy of data across various sources due to identifier mismatches, duplication, other data issues

Headquarters wants the field to accept the information and take relevant actions while due to perceived gaps in information there is a hesitation on the field representatives side to take required actions. Additionally, this issue does not seem to have a widespread diagnosis for the headquarters however is revealed on a case-by-case basis when individual instances are analysed. From the field representatives perspective even a moderate inaccuracy rate is perceived as “the data is wrong, the insights are useless”.

In such scenarios, the best practice is to develop and deploy a platform to gather field intelligence and to acknowledge the wisdom of the feet on the street. This provides credibility to the whole analysis exercise, improves data used for the relevant problem statement and gains early buy-in from field representatives for the action plan resulting in timely actions post rollout.

This Deploying such a collaboration approach with your field representatives allows HQ to corroborate information procured from various internal and external data sources with field knowledge.

Let’s consider an example from the pharmaceutical industry. There is a prevalent practice in the industry where HQ shares a specific target list of doctors with each individual salesperson. These target lists are very critical because many times the salesperson’s quotas are determined based on this target list and their potential. Salespeople constantly complain about movement of doctors out of their territory or restricted access to certain doctors/prescribers. Deploying a field intelligence platform in this situation can help HQ give control to salespeople to validate their target list (add, delete based on certain pre-defined constraints) along with providing additional profile information about the prescriber. This web-based platform can also allow salesforce to confirm prescriber attributes and provide other relevant intelligence about the prescriber based on either their local market knowledge or their last few discussions with the prescriber.

Incentius’ Field Intelligence platform can enable HQ to perform the above functions and additionally to gather extra field intelligence with the help of survey questions about the prescriber on various topics. Some of the questions can be on the lines of:

  • Is this prescriber a Key Opinion Leader?
  • Are there any access restrictions with this prescriber?
  • Is this prescriber a competitor product loyalist?
  • Is there a need to reach this prescriber using other marketing channels?
  • Should this doctor be invited for specific congresses/conferences etc.?

The above set of survey questions are only representative can beand are completely customized to address specific client needs.

In addition to this, the salesperson is able to see near real-time impact of changes he has made giving him insight into the impact and ensure that it is in line with expectations.

You can access a prototype of Incentius Field Intelligence platform at – Demo Link:

This collaboration approach allows HQ to corroborate information that they have received from various data sources with field knowledge and use that for downstream analytics which makes the outcome much more credible and results in timely actions from the salesforce.

Sales contests definition – Design & Analysis Amit Jain November 21, 2014

Sales Contests and SPIFs act as a medium to accomplish specific short-term sales goals. They can be quite effective motivationally if used well because of the additional cash/non-cash-based incentives over and above the normal IC plan. Team-based sales contests can also bolster salesperson teamwork by exploiting healthy competition. However, sales contests should not be used as a method to account for gaps in the base IC plan. Also, ensure that there aren’t too many contests running for a particular salesforce within a year as they may start to act as a distraction to the base IC plan. Some scenarios where contests are a good tool are:
  1. To temporarily motivate salespeople to react appropriately to external market events. For e.g: In case of launch of a new competitor, focus should be on maintaining market share.
  2. Give sales performance a shot in the arm. For eg. Several companies run contests mid-year when performance to budget needs to catch up.
  3. Provide temporary focus to a lagging product line.
  4. Sometimes sales SPIFs can be used as a base IC plan for a new product that went to market very quickly and the base IC plan is still playing catch up.

At a high level the process below should be followed to ensure that contest is effective:

Define a clear contest Objective

Define the contest objective clearly along with the desired business goal. As far as possible try to define the business objective in numeric terms as well. This helps judge the success of the contest more objectively. For eg. Improve air conditioning sales by 25% YOY during the summer months.

Budget, Budget, Budget!

Next decide on the budget for this contest. What is the investment you are willing to make to achieve this desired business goal? The success of a contest is defined as achieving the desired business objective while remaining within budget.

What are the details?

Once the problem statement is defined, the next step is to design various aspects of contest:

  1. Design methodology – As far as possible the SPIF/contest should complement the base IC plan and should not send out a conflicting message
  2. Performance Metric – Pick a performance metric that is clearly aligned to business objective along with definition of data sources being used for calculations
  3. Period – Communicate the effective start and end date of the contest and the payout timelines for the contest/SPIF
  4. Applicable Rules – Define the rules in as detailed a manner as possible. Specify at least:
    1. Eligibility – Who is eligible to win the contest and who is not
    2. Competing pool – In case of competitive contests clearly define the pool within which your performance will be compared
    3. number of winners – Define the number or percentage of winners from each pool
    4. Reward – Cash, Non-Cash, Recognition, Commission per unit

How much is this going to cost us?

Perform cost sensitivity analysis based on various sales performance scenarios to get a better understanding of cash outflow and to avoid the risk of facing cost-overruns. Use this model to tweak the contest parameters so as to achieve acceptable spend. This model can also help you build a business case for contest implementation.
This model should also be used to ensure that the performance metric is unbiased to any specific geography/group and that the contest will not create any undesirable behaviour from the participating salesforce.

Communication

The most critical step for the success of a sales contest is communication. There should be clear messaging about the underlying business objective, eligibility, associated business rules, the competing pool and the reward associated with the contest. Participating sales team should have clear understanding of the performance metric (sales performance or activity based) and should perceive the metric as fair. Be open to offer additional training especially for new launch products to engage the broader salesforce.

Your contests will be more effective if they are exciting!

Ensure that you inculcate excitement in your contest communications as well. Using sports or entertainment analogies in contest communications can help here. The aim should be to get your salesforce excited about your contest.
Create a buzz around the program by utilizing multiple communication channels:

  1. Second line manager – direct communication
  2. Company Intranet
  3. IC Scorecards (via notes/comments)
  4. Email blasts
  5. Social Media

How are we doing?

Along with the contest detail communication, focus should be on creating effective reports and dashboards to communicate feedback:

  1. Dashboard with performance measurement and clear contest standing
  2. Ranking Report
  3. Additional section in existing IC Scorecards or sales performance reporting

Let’s build and run this thing!

Ideally you should use your existing ICM system to implement your sales contests. This will ensure that data sources and rules applied for your contest are consistent with the base IC Plan definition of those rules. Timely progress reports to management as well as participating employees on the contest standings and projections will help maintain salesforce focus on the contest.

Ok! Was it worth it?

Once the contest period is over, go back to contest objective and desired outcome identified in the first step. Measure success in comparison to the assigned business objective. Analyze improved sales performance and success metric and cost of contest as compared to the budget allocated. Slice your contest winner performance many ways to analyze the overall impact of the contest. As part of this step, it’s also important to seek feedback from the participating team on their experience so that contests can be made more effective for future.
In this blogpost, we talked about how to make the contest design and management process more streamlined and effective.
Below is visual framework of how Incentius can help desing and manage sales contests for your organization. Get in touch with us at info@incentius.com

Should I look beyond excel templates to manage sales compensation? Amit Jain July 25, 2014

 

The return on investment (ROI) of an incentive compensation management system continues to be a debatable topic with various objective and subjective parameters that require inspection before making a business case. Any sales organization looking to improve its incentive compensation management capability needs to justify the investment into new solutions. Superficially, an incentive compensation solution seems like software that would just be ‘good to have for an organization but scratching under the surface reveals several opportunities for cost savings and increased revenue.

Several factors need consideration when justifying investment into an incentive compensation solution. An inexhaustive list is:

  1. Delay in product rollouts (Yes, product rollouts have been halted/delayed due to sales compensation system incapabilities)
  2. Overpayment & underpayment rates
  3. Existing process inflexibility to plan changes. Solutions should always fit business needs, businesses should not compromise due to solution limitations.
  4. Frequency of late payments
  5. Attrition rate
  6. Dispute resolution turnaround time
  7. Availability of data for analytics and management reporting needs
  8. Audit and compliance risk
  9. As with any ROI estimation, let’s review the costs associated with these factors and the tangible gains we can achieve from the proposed investment in an efficient ICM solution.

Overpayments

Estimates suggest that overpayments amount to approximately 3-8% of total incentive compensation spend. These overpayments generally go unreported by the beneficiary salespeople but still creates an environment of distrust. This is especially pronounced in spreadsheet-based solutions. Recent studies suggest that a whopping 88% of spreadsheet models contain errors. An ICM system with automated validations and an intuitive workflow can help reduce these overpayments and recover these losses. By and large, these cost savings alone can act as justification to move from spreadsheet-based systems to software as a service model.

Underpayments

Incentive compensation underpayment errors cause salespeople to distrust existing ICM solutions and encourage them to create their own parallel processes to calculate their ongoing commissions affecting net selling time. In addition to these shadow accounting practices, underpayment errors create increased disputes resulting in loss of productivity all around. It’s estimated that the opportunity cost from this amounts to about 5-10% of compensation spend. These opportunity costs when accumulated across the entire salesforce become significant.

Attrition rate

Demotivation and reduced engagement of top performers arising from incorrect or delayed incentive compensation results in higher attrition rates. This not only piles on additional administrative costs such as legal, recruitment, training, sales personnel interview time but also results in loss of revenue due to vacancy and required ramp-up time for new hires. This financial impact of attrition is usually underestimated. In general, it takes about $50K as the cost to hire one experienced salesperson while the loss of revenue varies depending on the industry between $100K-$500K. For a medium-sized salesforce, a 2% reduction in attrition rate can mop up millions in cost savings.

Administration cost

In a spreadsheet-based ICM system, sales compensation analysts spend the majority of their time validating inputs and recalculating outputs and cross-checking against parallel calculations. This reduces result analysis time and hinders value-added analytics that can reveal great business insights. Reduced result validation time forces analysts to calculate manual adjustments to account for calculation errors. With the implementation of an automated ICM solution, administration costs can be reduced significantly and the time saved can be used for supporting adhoc analytics. This also helps in reducing reliance on a few analysts maintaining the worksheets and supporting business continuity. An intuitive workflow can help streamline the entire business process with visual documentation.

Timely Insights

An automated ICM solution also helps in timely actionable insights to drive business decisions. It helps the analyst in identifying subtle motivational issues with the existing plan and supports the sales leadership in course correction. Such timely changes can drive the overall alignment of salesforce behavior with strategic corporate business objectives. While it may seem like an isolated business process in the vast sales domain, the ICM systems act as a pivot around which a detailed sales analytics practice grows. Hence insights gained from sales compensation systems have a greater impact on overall sales operations.

Conclusion

Implementing an automated ICM solution results in reduced operating expenses and increased net selling time which boosts top-line revenue. The ICM solution reduces ambiguity in incentive compensation calculations and improves the reliability of your plans. More importantly, an ICM solution creates an environment of trust reducing attrition rates and boosting salesperson morale. It also provides flexibility to implement new ideas in a timely manner to stay up to date with the dynamic business environment.

Thoughts? Did we miss anything significant? Let us know in the comments below.