The deployment of Incentive Compensation Management (ICM) solutions provides companies with a competitive edge, with process improvement being a core component of an effective ICM strategy. However, many organizations still struggle to reap the full benefits of their investment. In this blog post, we will share some best practices for achieving process excellence with your ICM solution.ICM systems are complex in nature and yet can be flexible enough to accommodate different scenarios. ICM systems must be quick and easy to change as well as scale up to enable businesses to quickly implement new market strategies and plans. And above all, given that these systems deal with people’s money, they also must be accurate and reliable.
This presents a unique set of challenges for organizations looking to automate or improve their ICM process. Here are some of the best practices that you can employ at various stages of your SPM journey.
Planning Phase:1. Data
Data is one of the biggest late-realization pain points. ICM is a processing engine that relies on the correctness of incoming data to calculate the right results.
Will all the data sources be aggregated at a single data warehouse? Are there multiple upstream system files in different data formats? Are all business units maintaining data using the same keys? Would you be able to merge these data sets without duplication or conflicts? These are important questions to answer.
Meet with your internal data managers early in the process. Aim to centralize the data in a single database and agree to standards that will allow team members to maintain and provide their data in a common format.
Organizations can often underestimate the involvement needed from their teams. Several stakeholders are often responsible for their day-to-day duties in addition to helping with the implementation of a new ICM system.
To avoid project delays and budget overruns, conduct joint project planning to determine how much effort may realistically be needed from which stakeholder and at which time.
3. Solution Transitioning
Change is never easy. Will the same teams be running the new system? Will the new system make certain roles redundant or less important? What would happen to those people?
A lot of knowledge may reside with people who run the current legacy system and it’s important to align everyone on the new project to ensure its success.
4. Solution Selection
Different ICM software products have different strengths and capabilities. And for each product, there are often different modules that can be utilized in different ways. To select the best solution, consider an evaluation project with ICM experts to identify the most fitting and economical solution direction to pursue. These early decisions can have huge cost and quality impact.
Intangent’s Total Impact Framework is designed to help you evaluate the financial investments and impacts of a well-implemented Sales Performance Management solution. The goal of this framework is for you to make well informed decisions about your sales operations.
Implementation Phase:1. Create Readable Documents
Emphasize clear and easy-to-read documentation throughout the project. It will support better solution fit and quality checks throughout the implementation project. If your business users or tech team can’t review the requirements documents quickly and easily, they likely won’t be able to spot missing or incorrect requirements.
2. Create Reusable Components
Many of the highly successful implementations follow an iterative path. The core model plumbing is created, tested, and deployed first; and then with that learning more plans are added to it later. Making the core logical components and feeds reusable can really help cut implementation cost for subsequent phases.
3. Don’t Inject Logic into Reports
Compensation logic should be kept as much as possible in the calculation module. Reporting should ideally just be pulling precalculated values from source, and then simply filter, structure and display to the end user. Injecting logic in reports can lead to duplication of logic and inconsistency in results across reports. It can also make the system inflexible and expensive to change and maintain.
1. Follow a Robust Support Process
Your ICM implementation was a success because you followed a good, reliable process of capturing complete requirements, getting them reviewed, doing a thorough design, testing the build well, and then planning the deployment. Retain this DNA in your post go-live process as well.
Even for a small change, capture the requirements and review with business stakeholders to ensure they’re correct and complete. Allow the consultant some time to think about the design and its larger implication on the model. Skipping these steps can cause regressions, defects, and a make system documentation outdated.
2. Regression Testing
ICM models are complex data models. Small changes can lead to huge variance in payouts. Invest in regression testing after each change is made to avoid any unforeseen impact to the production application.
3. Performance Monitoring
Over time calculation times can grow from a few minutes to several hours. In most cases, performance only catches attention once it’s the calculation times become very high, at which point it can take huge amount of rework and redesign to resolve. Monitoring calculation times and working with your consultants to periodically redesign slower modules can help you maintain steady performance. Performing periodic data clean-up activities can also remove a tremendous amount of load from the system.
4. Planning Comp Plan Changes
Treat comp plan changes as an implementation project. Start discussions ahead of time and involve your services consultants early in the process to understand the cost and timeline implications of proposed changes. Doing this at an early stage can allow you to explore cost-effective alternatives that may be equally acceptable to your business users. Also, your services consultant may be able to suggest efficiencies based on their domain experience and industry knowledge.
Having a successful ICM system can be complex but following these best practices can help you achieve positive change and long-term success. Speak to Intangent to explore where your greatest efficiency gain lies and how you can make quick strides towards your ICM objectives. Schedule a meeting here.