Incentive Compensation Management software solutions, when aligned with strategically cultivated corporate objectives, will enhance a sales organization’s ability to both compete and win. Incentive compensation management tools are designed to introduce trans-formative automated processes into an organization’s daily workflow. Yet, some organizations still choose to climb their own personal daily, weekly, and monthly “Manual” Everest’s. Trying to conquer sales compensation’s time-consuming processes with inadequate tools is a great way to under-utilize valuable resources like compensation admins and sales operations analysts.
Current State: Incentive Compensation Administration the Hard Way
Incentive compensation administrators have a multitude of responsibilities that impact a sales organization’s ability to run smoothly. Their workload may consist of engaging with many internal competing stakeholders, complex compensation results, and hard deadlines. By not enabling your incentive compensation administrators to focus on the bigger picture, you’re investing in short-term patchwork solutions instead of long-term performance improvement objectives. Here are four key pain points that many organizations without an SPM software solution face:
- Reduced Efficiency – incentive compensation administrators who are not being supported by an Incentive Compensation Management (ICM) software solution will require more time to complete basic tasks. Having to comb through data to ensure accuracy can be both tedious and unsuccessful. Manual processes bog down the entire comp process by forming bottlenecks at each hand-off point. Over time, these manual processes will erode your administrative team’s responsiveness, resulting in a frustrated sales force.
- Reduced Accuracy –Manual processes are central to the use of multiple spreadsheets to manage incentive compensation. As time goes on, these spreadsheets will require more attention and management than the team is able to provide. This leads to inaccurate inbound data, inaccurate calculations and ultimately leads to error-filled results. This type of environment is perfect for cultivating mistrust and doubt among the sales force, which can lead to higher turnover and lower sales.
- Dampened Agility – When working in a sales organization that only utilizes manual processes for incentive compensation management, quickly aligning the team and the sales goals can be quite difficult. If corporate leadership recognizes a shift in the competitive landscape, strategic changes will be made. Strategic changes will impact incentive compensation plans and these modifications will need to be handled by compensation administrators as well as sales teams. Maintaining manual processes while absorbing critical changes to the sales incentive program will put excess strain on the administrative team. This strain will lead to mistakes, short-term corrective measures, and ultimately a delayed roll-out of the newly devised incentive program.
- Ineffective Reporting - Having accurate data to analyze can greatly enhance your sales organization’s ability to forecast and strategize. Manual processes have the potential to reduce transparency and clarity through reporting because much of the data is unstructured and unreliable. This makes it difficult to provide multiple accurate reports for multiple stakeholders. A lack of reliable data will result in sub-optimal decision making.
Manual process can and will negatively impact your company’s competitiveness, but it doesn’t have to be this way. Your incentive compensation administrators can greatly benefit from ICM software solutions. ICM tools will not only help to automate tasks vital to the smooth operation of your sales organization, they will also allow you to do more with your incentive team.
Future State: Automated Paradise for Incentive Compensation Administration
One of the benefits of utilizing ICM software is freeing-up time for compensation administrators. Automated ICM solutions are more accurate, easier to reconfigure, and have built-in capabilities to support reporting and data integration. These are clearly improvements that the incentive compensation team can appreciate, but the real magic is in how these improvements impact other key stakeholders.
Improvements in accuracy mean that sales teams are paid on time and are paid correctly. This builds confidence in the sales administration team which reduces turnover and increases time spent selling.
Improvements in team agility results in the field sales team getting “on strategy” faster because the new incentive plans can be rolled out in weeks rather than months.
Improvements in reporting and data availability allow multiple stakeholders to better understand sales performance. This availability of accurate data informs better decision making throughout the organization.
Efficiency, accuracy, agility, and transparency all play key roles in a successful sales organization. If you are currently considering the strategic impact of incentive compensation management in your organization, we’d love to talk to you. Intangent Strategic Services can provide clarity and equip you with the appropriate knowledge in order to make the best decision for your business. Schedule your free strategic services consultation here.