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top 5 challenges & solutions

Top 5 Incentive Compensation Management Challenges and Solutions

Whether you’re evaluating a new Incentive Compensation Management (ICM) system, making changes to an existing system, or preparing for a new implementation, there will be challenges along the way. To help with your next project, we’ve identified five common challenges and recommended solutions.

#1 Performance of your ICM system deteriorates

Challenge: After an 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 symptoms may appear quickly; however, even a well-designed system requires regular health checkups to keep it running smoothly.

Solution: 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
  • Invest in regular performance assessments
  • Provide ongoing training to ensure that people know how to use the latest features in your ICM system

Intangent is often called in to optimize system performance. In one case our team worked with a plumbing supply wholesaler’s ICM system to reduce the calculation time from approximately 24 hours to 8 hours through calculation optimization. In another instance involving an insurance carrier’s ICM system upgrade, we reduced calculation times from over 20 hours down to 8-9 hours.

#2 Last-minute changes compromise ICM system integrity

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Challenge: When a new system is being implemented, it’s usually a high-profile project and the discipline required to maintain best practices is 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:

  • Pressuring the support team to rush changes before an upcoming deadline (e.g. before the next payroll calculation)
  • Cutting corners by skipping regression testing
  • Making changes directly in the production environment to meet last-minute deadlines.

Solution: Manage all system modifications as “mini implementations” to ensure that your ICM team has the time required to properly implement and test changes.

  • 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
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Intangent offers an optimized delivery process for managed services to ensure that all change requests and fixes follow protocol.

 

#3 The legacy ICM team doesn’t buy in to the new ICM system

Challenge: 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 the new project.

Solution: Make communication 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 legacy team members will have with the new system
  • Ensure smooth knowledge transfer and learn what worked and didn’t work in the previous system from the technical people on the front lines
  • Identify and eliminate features that look good on paper, but that no one uses

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 lag, and provide ongoing technical training specific to your model.

#4 Data from different departments is not standardized

not standardized data

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

Solution: Meet with internal data managers early in the process to agree on standards to use in the ICM system, 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

Experienced ETL specialists can help 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

Challenge: Inadequate time has been allotted for key stakeholders to contribute to the implementation of the new ICM system. Some tasks that are frequently overlooked include:

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

Solution: 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 project deliverables
  • Don’t forget about your day job! Many project team members have responsibilities that extend beyond the 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 system, rest assured that there is a solution. The Intangent team excels at quickly assessing ICM system challenges at all stages and providing solutions. For example, to help prevent last-minute changes, Intangent can prepare and present a business case to upper management that shows why changes must be properly managed as projects, and demonstrate the risks of quick fixes.

If you are experiencing challenges with your ICM system, speak to an Intangent ICM specialist.

 

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