ICM Best Practices for Sales

Organizations

Introduction

Robust Reporting

2-Week Payout Reporting 2-Day Payout

Efficiency, accuracy, and usability are key components in any process that hopes to achieve consistently positive results. Incentive compensation management solutions (ICM) enable organizations to oversee sales remuneration with a focus on success in each of those three areas.

This document has been written to benefit and inform stakeholders at multiple levels of sales performance management, from sales leaders, to human resources, to financial advisors. The increasing complexity of a modern sales organization has made the standardization of best practices a necessity in order to ensure those involved are familiar with their responsibilities and systems.

A 2011 study showed that the complexity of modern compensation systems had left approximately one quarter of surveyed reps confused about their original plans. Having administration in place, however, was shown as a principal motivating factor in sales behaviour in almost sixty percent of respondents.

From a managerial perspective, these statistics are telling but remain secondary to cost realities. The cost of maintaining a sales team (as a portion of overall revenue) increased nearly a full percentage point in 2011.

The need for a comprehensive, reliable ICM solution seems obvious to any sales organization. Best practices for implementing and taking full advantage of that offering fall into four major areas.

ICM reporting capabilities are critical for managers to:

• Evaluate rep performance• Adjust procedures and practices as necessary• Identify patterns to anticipate future issues

Transparency is increased across the board, allowing sales reps to align their activities and tracking directly with compensation standards. With a reliable procedure in place that has no hidden aspects or confusing elements, reps inherently trust the process more and are less likely to involve “shadow accounting” practices.

Timeframes greatly benefit from comprehensive reporting. In one key 2012 case study, a large, North American-based financial transaction processing company reduced their payout period from two weeks to just over two days.

SHADOW ACCOUNTING Definition: Accounting system in which two separate sets of financial books are maintained for the purpose of finding mistakes and inconsistencies.

Compliance Considerations

Administrative Visibility

Regulations and policies, including those that are both internally and externally mandated, help drive ICM efficiency and ensure the proper course is maintained. ICM best practices support these considerations multiple ways.

Audit capabilities allow administrators to track all sales payments over time, including special compensation and custom adjustments.

Process and workflow controls integrate business processes with technology solutions that focus on usability. This speeds up processes in all areas, from new rep onboarding to incentive compensation pay cycles. Administrators and managers can maintain a constant understanding and awareness of the incentive compensation payroll cycle, as well as other variables.

Security measures, when deployed as part of a robust ICM solution, are required for systems involving sensitive payroll data. They should integrate with single sign-on providers and support any issues that may arise as part of the process.

Ultimately, the management component of an ICM equates to administrators’ increased capabilities of running their department. They’re enabled to make informed decisions by harnessing the increased visibility of the information at hand.

Tracking commissions earned is a fundamental component, and in particular the ability to see who sold what and when and to whom.

Sales rankings help to inform overall performance of the organization and identifying trends in individual reps’ performance. The near on-demand recall ability for this data, as we mentioned, allows decisions to be made in real time with immediate impact on process optimization.

Sales activity can be tracked on a daily basis and adjustments made with more immediacy to reflect overall objectives.

Forecasting capabilities are necessary to optimize costs and workflows before they occur. Identifying trends and sales opportunity helps to spot areas that are ripe for investment while bringing attention to those which require further consideration.

AUDIT CAPABILITIES

PROCESS AND WORKFLOW CONTROLS

SECURITY MEASURES

Improved Compliance

SummaryA comprehensive ICM solution is only a single step in implementing sales and incentive performance and compensation management. The definition of organizational best practices to support sales standards and optimize workflows is necessary regardless of the size and scope of the staff involved.

This document serves as an introduction to those practices, and a general overview of how an ICM solution’s features can be tailored to fit every sales organization’s unique needs.

For more information on how to embrace these best practices with greater specificity and attention, contact Intangent at info@intangent.ca or visit our website at www.intangent.ca.

326 Adelaide St West Suite 301Toronto, ON M5V 1R3

Phone: 416-646-8090 / Fax: 416-352-1787

www.intangent.ca

User-FriendlinessAn ICM solution must be implemented with a focus on usability. Business users must be able to control a robust system without requiring complex training – or a degree in computer science. Embedded visualization tools should be used for plan configurations, allowing components of a sales plan to be traced easily so that administrators can precisely understand individual rep payments.

User-friendliness is also achieved through the use of simple point-and-click tools – no programming, just formulas – for rapid plan implementation.