It seems that there's hardly a company around anymore that doesn't rely on some sort of automated CRM application, particularly with the new breed of on-demand CRM solutions delivering such compelling value. The visibility these solutions provide is invaluable in driving sales and satisfying customers. But what about post-sales visibility—the kind that can come from leveraging sales compensation information?

Sadly, post-sales visibility is an area where most companies still scramble for data and, thus, miss out on the synergies that can exist between CRM processes and strategic compensation programs—programs that change behaviors so sales reps sell the most profitable products and consistently engage in desired activities. Yet it doesn't have to be this way. It's now perfectly possible to build a bridge between pre- and post-sales data and leverage them both within a single environment to mold sales behaviors and maximize performance. But first you have to chuck the spreadsheets.

Throughout the technology boom of the late 1990s, investors lost billions of dollars backing companies that owed their "success" to the creative use of smoke and mirrors. When the inevitable meltdown hit, scandals involving WorldCom, Tyco and Enron drew national attention to the fact that many corporations did not have proper financial controls and corporate governance in place; in response, the U.S. Congress passed the Sarbanes-Oxley Act to force companies to create a paper trail of financial information so that data could be easily tracked. One of the areas that wise companies are beginning to monitor more closely than ever before is sales compensation management.

Most companies use Excel to manage their sales compensation programs. Spreadsheets are fine for sorting tables of data, but they weren't designed to provide the kind of sophisticated financial transparency that businesses need to manage sales compensation. Despite the nearly universal recognition that Excel isn't an adequate tool—spreadsheets have an error rate of 7 percent to 10 percent—even the most sophisticated enterprises still use spreadsheets to manage their sales compensation programs. Not only is this an inconvenience for the accounting department, but also it's a source of liability for the company as a whole.

Even the smallest mom-and-pop businesses use Quicken and other software tools to prepare their taxes and balance their books, but when it comes to sales compensation, many of the world's largest corporations are still mired in the dark ages of Excel spreadsheets. It's a hopelessly inadequate tool for the job, not only because it's a nightmare for sales and financial professionals to manage but also because it can cause financial losses for the company. Fortunately, a new breed of software packages designed specifically for sales compensation management is giving organizations a new way to oversee this important corporate function.

For years, great business leaders have recognized that sales compensation is one of the prime motivators for a company's success. The right plans can increase top- and bottom-line revenues, control expenses and drive consistent quarter-over-quarter results. Unfortunately, because of the high costs associated with automating sales compensation, only the world's largest sales organizations have been able to realize the benefits of having a dedicated compensation management tool in place.