Using Managed Services To Maximize The Potential Of Your Incentive Compensation Management (ICM) Solution
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1 Using Managed Services To Maximize The Potential Of Your Incentive Compensation Management (ICM) Solution
2 Introduction 1 Technology is a key productivity driver. Designed and maintained properly, technology can focus, integrate and harness your company s energies to ensure everyone works toward a single goal. A well-implemented Incentive Compensation Management (ICM) solution integrates with your business processes and aligns incentive plans with your strategic goals. The ICM solution connects the overall strategy with front-line activities to ensure consistency throughout the organization. From the executive boardroom to the management table and down to customer-facing sales staff, the company s overall goals are internalized by managers and the teams they lead. ICM solutions provide substantial alignment across the organization. They are a tool kit that allows companies to develop compensation strategies that incent and reward desired behavior. Keeping an ICM system working at its full potential requires expertise, guidance and insight.
3 2 Benefits of Incentive Compensation Management (ICM) ICM solutions offer some key benefits to companies, including: FLEXIBILITY A proper ICM system is flexible, allowing administrators to tweak and revise plans as the marketplace, industry and sales team changes. IMPROVED REPORTING ICM holds a significant amount of data on sales activities, and that data can turn into reports which show trends, inform strategic planning and facilitate executive decision-making. INCREASED MORALE The immediate, clear access to data is a morale-booster for sales teams. Account representatives can use the system to conduct What If analysis and predict their potential payout if certain sales strategies become successful. ICM also allows managers to pinpoint the conduct of top performers, while encouraging entire teams to model those behaviours.
4 3 Navigating the Changing Environment Managing Your ICM Technology Business environments often undergo rapid change. The competitive landscape shifts, technology advances and the marketplace demands different products and services. As the business environment changes, your strategic and operating plans must be revised. For companies relying on ICM solutions, this dynamic environment presents a number of technical challenges: INTRODUCING NEW PLANS As the company expands and the compensation strategy becomes more sophisticated, the organization must add new plans. These plans must be accurately implemented in the ICM solution in a timely fashion. OPTIMIZING THE SYSTEM Run the system at its highest potential by taking advantage of new product features, maintaining the system regularly, and implementing changes using best practices and recommended methodologies. REVISING EXISTING PLANS External factors can impact compensation strategies mid-year, requiring that sales organizations modify their compensation plans with minimal warning and aggressive implementation schedules. EXPANDING THE REPORTING INVENTORY Reporting needs related to the sales function are constantly evolving. New managers, new products, and new trends in reporting contribute to an on-going report development cycle. Addressing these challenges requires a flexible, scalable system, which a robust ICM solution can provide. It also requires ongoing access to expertise and IT skills to keep the system operating at its potential and helping the company meet its goals.
5 4 Using Managed Services to Maximize ICM Capacity Some companies will undoubtedly struggle to keep pace in this rapidly-changing environment. Many will lack the in-house product expertise needed to keep their system optimized, focused and aligned. In these cases, using a Managed Services arrangement is an effective long-term solution. Moreover, the working relationship between a Managed Services team and its client firm usually follows an Engagement Model. As an example: Engagement models help clarify what work is being taken on, and at what cost to the customer. This is very important when operating with a third party. A well-run Managed Services team will provide clients with weekly status and activity reports, offering insight into time spent on various deliverables, outstanding defects or changes, overall status of tasks, and any other pertinent system information.
6 5 Benefits of Managed Services Using a Managed Services teams has significant resource implications for firms. It saves the organization from an ongoing, serious investment in IT resources. Furthermore, the Managed Services team offers direct benefits that will keep the system working at its top potential. These include: Reverse Engineering The team s broad experience with multiple customers and multiple incentive compensation methods allows them to reverse engineer any ICM model. Troubleshooting Ability The team has encountered everything, including the most common problems and the most uncommon problems. Drawing on this experience, the team can diagnose issues quickly. Greater Adaptability As the business becomes more complex, the Managed Services team can guide the organization through complicated scenarios. Scalability The Managed Services team can augment core teams to provide immediate capability, ensuring the system grows in lock step with the company and the marketplace. Greater Focus on Core Business This is perhaps the top benefit of using a Managed Services team. By outsourcing the management of the ICM solution, the compensation team can focus on the business of compensation understanding plan effectiveness, key performance indicators, and compensation strategy.
7 6 Conclusions Incentive Compensation Management (ICM) is a big step towards achieving alignment across the organization and driving desired behavior. Companies from all sectors can benefit from an incentive compensation strategy that aligns corporate goals with the conduct of customer-facing staff. However, the responsibilities of ongoing maintenance, particularly as an organization grows, require a plan to constantly revise, scale and design the system. Intangent s Managed Services practice has a decade of experience managing incentive compensation systems, with deep experience working in the financial services, retail, high tech, medical devices and insurance industries. To learn how Intangent Managed Services have helped companies align their goals and drive growth, please visit Phone: / Fax: Adelaide St West Suite 301 Toronto, ON M5V 1R3
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