It has never been more important to find the right incentive compensation management solution for your organization. The events of 2020 placed incredible pressure on traditional sales models. In a matter of months, enterprises adopted new products, services, sales channels, and unleashed a wave of digital transformation to meet rapidly shifting business and consumer behavior.
A Buyer’s Guide to Incentive Compensation Management Software
In-person meetings, strategies, territories, and compensation plans entrenched for years were forced to adapt virtually overnight. Some worked, but many didn't. These shifts created more uncertainty in results, forcing management to watch sales engagement more closely. For many organizations, revenue, expenses, and productivity were focused on like never before.
An effective well understood compensation model can have a 50 percent impact on boosting sales, compared to other spend areas that influence revenue, such as advertising.
Many organizations are still reliant on spreadsheets to manage comp plans which can be a major roadblock to success. Others rely on older solutions to get a handle on automating sales compensation, but these solutions often come with considerable trade-offs in terms of ease-of-use, their ongoing cost of management, and poor ROI.
The way forward is flexible, easy-to-use solutions that manage and automate sales comp. This is the path to skyrocketing ROI.
1 - Eliminate the need to manually prep your data
In this guide, you'll learn how to make sure data flows, and transformations don't get in the way of automation. Commission implementations often stall when it comes to sourcing data quickly, efficiently, and accurately on a regular basis for every period. It also causes the greatest angst for comp admins after the system is up and running. The more spreadsheet manipulation required, or the manual input of data into an ICM required, the larger the headaches you will face.
As compensation plans change, so will the data integration processes required. Input fields for things such as determining crediting, additional plan components, or changing territories have the ability to wreak havoc on your ICM initiative.
To get around this issue, you need to make sure an ICM can import all your custom fields and objects from the source systems. It pays to research how easy the ICM is to use and the level of technical expertise required.
2 - Look For Ease-Of-Use And Flexibility In The Comp Plan Builder
ICM aims to simplify plan design, automate calculations and remove the need for spreadsheet formulas. Older applications make building plan design complicated, while newer ICM systems are limited by their ability to only handle simple plans.
ICM systems are most valuable when they provide comp plan flexibility and contain re-usable components across the business (you don't want to be doing the same thing repeatedly). Organizations require an ICM system that is flexible enough to grow with them; otherwise, the system will have a short shelf life. It's important to get hands-on experience with a system before purchasing to see if it fits your current and potential future needs.
Acquiring a system you have to configure from the ground up is a sure-fire way to ensure lost time and high service costs.
3 - Easy To Setup Flexible Workflows Are Essential
Teamwork is the essential element for consistently achieving ICM success. Automated workflows that route request, review, and approval processes reduce risk and don't leave you wasting time with emails. Surprisingly many ICM solutions still require lengthy implementation projects and coding to manage workflow. Then you're stuck with a fragile, rigid system.
At the very least, you need automation across approval workflows, dispute resolution, lock periods, and internal messaging. But more than these examples, it requires total flexibility to quickly set up an approval or workflow process on any record or table in the ICM to adapt it to your organizational processes.
4 - Drill Down Beyond The Sales Demo For Reporting And Analytics
It's a fact that ICM success relies on easy-to-use payee reporting. Without full transparency around the comp system, sales leadership, sales reps, brokers, and agents will lose trust in the system. This means you lose in terms of wasted time and disputes as the sales team checks their payouts.
Despite this, some systems treat payee reporting as an afterthought, relying on a few canned reports. So you must look for the right features in the system. Can you configure payee reports yourself? Can you report on all data in the system or just some fields? Is it easy to manage out of the box? Can you create all your analytics metrics? Does it provide all the time intelligence you need for YTD, QTD, and MTD? Does it rely on a 3rd party vendor for analytics?
5 - Know The Difference Between Unified And Bolted Together Solutions
An ICM software solution that is unified is essential to a successful rollout. You need a system built completely from the ground up for data integration, comp plan design and workflows, reporting and analytics. This is the only way to ensure the solution is easy to use and run for everyone.
Unfortunately, many ICM systems today have been built by bolting different systems together over time. A reporting or analytic tool may be from a third-party provider and a workflow for handling disputes stitched on. The result is a clunky system where all the parts don't fully talk to each other. A fully unified system is vital.
6 - Think Beyond The Product: Expect A Personalized Customer Experience
A great ICM requires more than just software. Customer commitment and vendor support are huge drivers for success. It is critical to check if your client team has a strong record with organizations like yours.
A team that is quick to troubleshoot and answer questions will go a long way towards a successful implementation for your business. Service teams that help you become self-sufficient over time should also be a top priority. At a minimum, there should be 1:1 onboarding and admin training.
It is critical that organizations get more out of their compensation spend and improve sales effectiveness to drive performance. Legacy systems are outdated and slow to adapt. They are also increasingly expensive. Many newer systems are not powerful enough or lack the depth of functionality to be scalable.
This guide will provide the information you need to select the right ICM solution for your organization that will deliver the power, flexibility, and ease of use to quickly deploy the right plan at the right time. Selecting the right ICM solution has never been more critical or rewarding.