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    Top 5 Incentive Compensation Management Challenges and Solutions

    Whether you’re evaluating a new Incentive Compensation Management (ICM) solution, making changes to an existing one, or preparing for a new implementation, you’re likely to run into some challenges along the way.

    To help with your next project and get you off to a smooth start, we’ve identified five common challenges along with recommended solutions to address them.

    1. PERFORMANCE OF YOUR ICM SYSTEM DETERIORATES

    After an ICM implementation, you may notice signs of deteriorating performance, such as taking longer to perform calculations.

    If the original implementation wasn’t designed with performance in mind, these performance issues may appear quickly; however, even a well-designed system requires regular health checkups to keep it running smoothly.

    To prevent performance from deteriorating, follow these best practices:

    • Design the original system with performance, scalability, and flexibility in mind
    • Ensure that all changes follow a strict protocol to prevent regressions and conflicts
    • Reuse existing configurations where possible
    • Invest in regular performance assessments and check-ups
    2. LAST-MINUTE CHANGES COMPROMISE SOLUTION INTEGRITY

    When a new solution is being implemented, it’s usually a high-profile project and best practices are in place. However, when changes are required post-implementation, best practices are often not followed, resulting in risky shortcuts that can compromise the integrity of the system. The following maintenance practices are extremely high risk:

    • Rushing the support team to make changes before an upcoming deadline
    • Cutting corners by skipping regression testing
    • Making changes directly in the production environment to meet last-minute deadlines

    To avoid these risks, remember to manage all system modifications as “mini-implementations” to ensure that your ICM team has the time required to properly implement and test changes. Here’s the best course of action:

    • Document and enforce change management protocols when the system is in post-implementation maintenance mode
    • Get buy-in from all stakeholders so they understand that you cannot accommodate last-minute change requests without risk of compromising the entire system
    • Never make changes directly in the production environment and instead follow a consistent deployment path 

    3. THE LEGACY ICM TEAM DOESN’T BUY INTO THE NEW ICM SOLUTION

    When transitioning from a legacy ICM system to a new one, the success of the new implementation can be jeopardized if members of the previous ICM team aren’t included in, and excited about, the new project.

    To avoid this, make sure communication is a priority and include all personnel who are familiar with the legacy ICM system in the new project.

    • Use capacity planning to find a non-critical time when the legacy team can be spared to participate in the new project
    • Calm fears about job loss by explaining what role existing team members will have when the new solution goes live
    • Ensure smooth knowledge transfer and learn what worked and didn’t work in the previous system
    • Identify and eliminate features that look good on paper, but have low impact

    By investing in planning and design expertise, you can capture valuable knowledge from your legacy ICM team. With training included in your project budget, you can ensure that your ICM team understands the new system before going live so that there is no learning gap and provide ongoing technical training specific to your model.

    4. DATA FROM DIFFERENT DEPARTMENTS IS NOT STANDARDIZED

    Different business units within the same company structure their data differently, causing duplication and conflicts when that data is imported into the ICM solution.

    To help address this issue, meet with internal data owners early in the process to agree on standards to use in the ICM solution, and ensure that the commission plans are properly structured. Some strategies that can help mitigate the effects of inconsistent data are:

    • Build a data management strategy
    • Bypass human error by automating more data sources
    • Invest in ETL and ELT processes to improve data quality before it is loaded into your ICM system
    • Use experienced ETL specialists to implement an efficient ETL (extract, transfer, load) process to standardize data in a data warehouse for use in your ICM system.

    5. ESTIMATES IN THE ICM PROJECT PLAN ARE NOT ACCURATE

    If inadequate time has been allotted for key stakeholders to contribute to the implementation of the new ICM system, some tasks that are likely to be overlooked include:

    • Requirements review and sign-off
    • Test case preparation
    • Source data corrections

    When planning your project, take these additional steps to ensure your timelines are realistic and your budgets are adequate:

    • Estimate each task fairly and include buffer time so the plan can flex if needed
    • Add time for meetings, interruptions and other project tasks that do not directly contribute to the project’s deliverables
    • Don’t forget about your day job! Many project team members have responsibilities that extend beyond this project. Those efforts must be considered along with the project needs.

    Having accurate estimates for planning is one of the benefits of working with project managers who have ICM implementation experience. No matter what challenge you’re facing with your ICM solution, rest assured that there is always a solution.

    Our ICM experts can help assess your ICM system challenges at all stages and provide actionable solutions that drive results.

    If you are experiencing challenges with your ICM system, schedule a meeting here.

     

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