Crawl, Walk, Run – Three Small Steps for a Successful ICM Implementation
In my role at OpenSymmetry, I often meet clients when they are hurting and help them imagine a new future state. As I work with companies to weigh different best-of-breed Incentive Compensation Management (ICM) platforms that might be optimal for their situations, I frequently witness companies grasp the robust capabilities of these solutions and immediately try to start sprinting to that ideal end state straight out of the gate. Considering that these companies struggle to keep their payment process moving forward from period-to-period with only a spreadsheet system as the primary technology, supported by cumbersome manual processes, I understand the desire to shed those challenges as quickly as possible. However, before discussing the logistics of an implementation and weighing in resources, timeline, and budget, I coach the client to focus on three key activities to help ensure a successful initial adoption of the solution, which will allow client resources to be better prepared to support additional functionality and avoid stumbling out of the blocks.
- Ensure all stakeholders are engaged for planning. Receiving stakeholder input is a critical first step so parties from the Finance and IT teams can share the necessary knowledge to work together with the sales compensation team to successfully process incentive compensation from period-to-period. Though they may not be on the front lines of incentive compensation management, these stakeholders play an important role – for example, IT may help source payment and sales personnel data, and Finance may use sales performance data for the financial modeling of future sales compensation plan design considerations.
- Prioritize critical pain points and gaps. There is never a shortage of business pain points identified during the current state assessment phase, so the next key activity is to prioritize those challenges based on the biggest return and immediate impact on the incentive compensation process. Commonly, the biggest priorities tend to center around getting the necessary clean data into the ICM solution and providing timely and correct calculations of payment results to the field. Besides those areas, other central pain points to address with an initial ICM production release typically include improved reporting of results to provide transparency and visibility into supporting payment details.
- Develop a realistic strategic roadmap for phased functionality. Once you have successfully engaged the relevant stakeholders and agreed upon the prioritized list of issues to address throughout the implementation process, it is paramount to develop a supporting strategic roadmap for phasing in all desired functionality. This should be a realistic timeline focused on addressing critical needs first and gaining those initial wins while laying the foundation for the future. For example, the roadmap for one of my enterprise clients was as follows:
- The initial focus of the ICM implementation was to produce clean and reliable data, precise calculation logic, and core field reports to help ensure adoption and understanding.
- After the system was in production and stable, the focus would shift to providing other functionality to support field self-service with streamlined workflow processes. This would also include additional analytics for the field and internal admins.
- Finally, the long-term goal of the ICM implementation was centered on any remaining support needed by the sales and sales compensation teams, such as what-if payment modeling for field resources and modeling and reporting capabilities to test out future ICM plan designs.
On the other end of the spectrum from the example above, I have seen a client run headfirst unsuccessfully into the big bang approach for the deployment as they felt there were too many challenges and issues with their current state. While I understand their difficult position, it was clear that they were ill-prepared to continue with the support of their business-as-usual responsibilities for compensation operations, as well as taking on more. Without having enough knowledge to administer an enterprise ICM solution with simpler tasks like rate table maintenance, the client was not in a good place to attempt more complicated workflow design tasks. I realize that it is not always feasible for clients to slow implementation deployments down enough to a manageable workload pace, but it is worth the additional due diligence to map out critical capabilities first for correct and timely incentive payments while focusing on other supporting features such as workflow and advanced analytical capabilities in subsequent phases.
At the end of the day, you will never find someone who successfully completes a marathon without any kind of training or roadmap for training – at least, without major injuries or some other kind of failure. Instead, if someone is serious about running their first marathon, even before starting a training regimen, he or she would ask for input from the right experts, focus on the areas to best prepare them for the journey, and then map out a plan to meet milestones along the way with the end goal always in sight. Likewise, trying to bypass those critical foundational steps for an ICM implementation will only result in disaster for companies after only getting a fraction of the way into their goals. First crawl, then walk, then run – and map it all out.
Found this article helpful? Join me for my next blog post, which will focus on measuring long-term success of an ICM implementation by articulating the right Key Performance Indicators (KPIs). Subscribe to the OS blog to have the latest posts delivered straight to your inbox!