The concept of comp plans driving performance in sales is not a new development, and technological solutions to determining compensation have developed as capabilities have increased. Yet, a CSO Insights survey from as recent as last year indicated that fewer than 14% of companies surveyed used a commercially developed Incentive Compensation Management (ICM) solution. In fact, over half the companies surveyed were calculating comp manually. Given the array of solutions available, this comes as a bit of a surprise.
Like most other SPM software categories, the list of ICM systems is expanding in names and capabilities. Merced, Callidus, Varicent, etc. There is no shortage of options. Many of today’s ICMs have the potential to integrate with your current systems and automatically draw the information that you deem to be aligned with corporate and sales objectives.
So what are the potential benefits of using an ICM solution?
Removes administrative burden and cost. Just as with so many other solutions that we use in business today, the ability of an ICM to determine compensation can simplify the process by removing manual entry and processing.
Reduces potential errors and issues. With any manual operation comes the room for user error, disputes, and delay. With an ICM, the process becomes simplified, automated, and transparent.
Allows for further customization. If your company is calculating compensation in Excel, there is a low limit to how complex the compensation plan can be. ICM opens up the possibilities of calculating comp from more than just a few lagging indicators like quota attainment, and adding in behavioral drivers. A more elegant comp plan that is aligned with corporate objectives can be a tremendous boon for your sales organization.
Now, this is not to imply that every company needs a commercially developed ICM. There are costs associated with them, and every case has to be weighed on its own merit. However, not understanding what the possibilities could result in a potentially valuable tool being left on the side-lines. This Sales Performance Management tool could not only simplify the administration of your comp plan, but also open up new avenues to improve your compensation model itself.
If you are looking at ICM possibilities or at utilizing your current system better with an improved compensation plan, consider drawing on SBI’s expertise. To find out more about SBI, request a demonstration at the link below.