The Limitations and Risks of Building Your Own Incentive Compensation Management (ICM) Platform

Incentive Compensation Management (ICM) is a critical component of sales performance management that requires effective management of commission payouts, bonuses, and other incentives. While building your own ICM platform might seem like a cost-effective solution, there are significant limitations and risks to consider. Let's explore some of the key limitations and risks of building your own ICM platform.

1. Opportunity Costs
   Building an ICM platform in-house requires a significant investment of resources, including time, money, and personnel. This can result in opportunity costs, which are the missed opportunities that result from investing in the ICM platform instead of other areas of the business. According to a report by Aberdeen Group, companies that built their own ICM platform reported that the project took more time and resources than they anticipated, resulting in opportunity costs that could have been invested elsewhere.
   
   
2. Manual Data Entry
   Building your own ICM platform often requires manual data entry, which can be time-consuming and error-prone. This can result in incorrect commission payouts, missed bonuses, and other issues that can negatively impact sales performance. According to a survey by Sales Management Association, more than 60% of companies that built their own ICM platform reported that they experienced issues with manual data entry.
   
   
3. Limited Reporting
   Building your own ICM platform can result in limited reporting capabilities, which can make it difficult to identify trends, track progress, and make informed decisions about sales performance. According to a report by Ventana Research, more than 40% of companies that built their own ICM platform reported that they experienced issues with limited reporting capabilities.
   
   
4. Limited Auditability
   Building your own ICM platform can result in limited auditability, which can make it difficult to track changes, ensure compliance, and identify fraudulent activity. According to a report by Aberdeen Group, more than 25% of companies that built their own ICM platform reported that they experienced issues with limited auditability.
   
   
5. Non-compliance
   Building your own ICM platform can result in non-compliance with industry regulations and best practices. This can result in penalties, legal issues, and reputational damage. According to a report by Gartner, more than 20% of companies that built their own ICM platform reported that they experienced issues with non-compliance.

Here are some stats to support these limitations and risks:

• According to a report by Aberdeen Group, the average cost of building an ICM platform in-house is around $1.5 million.
• According to a survey by Sales Management Association, more than 60% of companies that built their own ICM platform reported issues with manual data entry.
• According to a report by Ventana Research, more than 40% of companies that built their own ICM platform reported issues with limited reporting capabilities.
• According to a report by Aberdeen Group, more than 25% of companies that built their own ICM platform reported issues with limited auditability.
• According to a report by Gartner, more than 20% of companies that built their own ICM platform reported issues with non-compliance.

Building your own ICM platform might seem like a cost-effective solution, but there are significant limitations and risks to consider. Companies that choose to build their own ICM platform need to carefully consider these limitations and risks, and weigh them against the benefits of customization and control. In many cases, buying an off-the-shelf ICM platform can provide a more cost-effective and scalable solution that meets

To learn more about how to align your corporate strategy with sales incentives reach out to Team Intangent to get you started with a sales performance management solution.