When it comes to choosing a vendor, there are many players that offer a compelling user experience. Yet, many lack the power and flexibility to grow with sales. Others come with considerable tradeoffs in terms of ease of use and their ongoing cost of management. It’s therefore vital that companies consider the right solution for their needs. Here are the important areas to consider:

1. Ensure data flows and transformations don’t jeopardize compensation automation

   Data integration processes often change when compensation plans change, requiring referencing different fields, such as for determining crediting, or as needed for an additional plan component or incentive, or when territories change.

2. What to look for in a compensation plan builder so you don’t run out of runway

   A central promise of ICM is to simplify plan configuration, automate calculations, and cut out the spreadsheet formulas—so you can get the comp plan out faster and make changes more quickly. Yet, with many legacy ICM solutions, building the comp plan is deceptively tricky.

   On the other end of the spectrum, newer ICM software vendors, though at face-value easier to use, often can only handle the simplest plans. While they often claim you won’t need any support, you’ll find you need their help for any level of complexity, such as building complex crediting rules, tiered attainment calculations, or sophisticated territory configurations―which ultimately hurts control and timelines.

3. Which comp and payee workflows are essential, and common mistakes to avoid
   

   Surprisingly, many ICM solutions still require lengthy services projects, scripting, and coding, to provide workflow management—and then you’re stuck with a brittle hard-to-change process. Here are just some of the workflow automations you should expect and look for:

• Approval workflows
• Dispute resolution
• Locking periods
• Inquiry management

4. Key questions to ask around reporting and analytics

• As an administrator, can I configure sales rep reports or compensation analytics myself? For example, add a new field, amount, format values, create new reports, add filters—without using separate tools or requiring expert services?
• Can I report on all the data in the system, or am I just limited to some fields?
• Is the participant portal out-of-the-box and easy enough to own and manage ourselves?
• Can I create all my analytics metrics like payables trends, OTC distribution, achievement distribution, targets, forecasted spend as a percent of revenue, and commission cost of sales without services?
• Does it automatically provide all the period-based summaries I need like YTD, QTD, MTD?
• How can I set up new filters to slice and dice the data, such as team, job title, plan, status, component, start, and end period?
• Is it simple to analyze sales engagement, like the number of logins and trends over time?
• Does the vendor rely on a third-party vendor for reporting and analytics? If so, how will you handle my support tickets and enhancement requests that depend on them?

6. Why many ICM solutions are so hard to use
   

   Here’s some insight into the world of ICM software vendors: many are “franken-software” solutions. That is, over time, they’ve been pieced together from different third-party vendor’s products, acquisitions, or entirely separate codebases so that they can check all the boxes on your ICM list. Great for them, bad for you. Make sure you opt for a unified solution vs a bolted together solution as they are hard to use and navigate!

Ensure your ICM solution provider won’t leave you high and dry with service and support
The right ICM is more than just a technology product. Customer commitment and strong vendor support are some of the biggest drivers of success. And while every ICM vendor offers services and support, often it can come with a huge variation in skill levels and limited experience understanding industry-specific compensation models and best practices. Customer support may be outsourced or inexperienced, which stretches out the time and frustration with every ticket. That’s why it’s critical to personally ensure your assigned client team has delivered strong satisfaction with compensation teams at leading enterprises like yours. Closely evaluate the quality of the team. During your demo and proof of concept, evaluate the customer support experience and ticket turnaround time.

What we’ve identified here is only a baseline set of the questions necessary for selecting a vendor and it’s a lot to consider. Check out this exhaustive vendor evaluation checklist we put together that could help lead your internal evaluation and start plan for choosing the right ICM solution.

Vendor Evaluation Checklist

General                              

• Flexibility and customization that would suit our unique commission program       
• Has experience serving “similar” customers according to size, growth, complexity of commission plans, and industry
• Has customers who have transitioned from other ICM vendors
• Ongoing patch and system upgrade process

Implementation and Training                                   

• Supports different implementation options (e.g. in-house professional services, implementation partner services)
• Doesn’t require third-party tools or technology to support the vendor
• Average implementation duration appears reasonable (e.g. not enough time can indicate poor understanding of project scope)
• No code setup and management
• In-house customer success team
• In-house customer support team
• Flexible Service Level Agreement (SLA) catered to unique customer needs
• Training support available across different mediums (in-app, customer success management, implementation specialist, etc.)
• Resources for commission administrators to understand the underlying relational data model of the application so they can make modifications
• Access to Knowledge/Support Center to easily solve issues, register for events, track product releases, etc.

Compensation Adjustments                                       

• Prior period and in-period adjustments to transaction amounts and corresponding balances (e.g. configuring clawbacks)
• Ability to calculate true ups (the delta between what was paid and what should have been paid and carrying it forward to the current period)
• Ability to apply retroactive changes to transactions when necessary          
• Support for manual adjustments
• Ability to apply pay adjustments to any level in the sales hierarchy
• Adjustment calculations with several attributes (e.g. account name, new logo)

Calculation Engine and Processing Power                                           

• Ability to self-serve
• Calculation logic is intuitive and easy to adopt
• Fast processing times for end-to-end transactions
• Flexible, logic-based modeling capabilities (e.g. set up any commission plan without the constraints of pre-defined templates)
• Reporting available for any given period

Data Integration and Automation                                           

• Open API available
• Direct integration with business applications (HRIS, CRM, ERP, legacy systems, etc.)
• Data can be ingested automatically via native integrations or manually via CSV uploads
• Secure File Transfer Protocol (SFTP) connector
• Salesforce tab and Lightning Component options
• Growing library of out-of-the-box data integration partners (Salesforce, Snowflake, Amazon Redshift, Microsoft SQL Server, etc.)
• Direct and scheduled data imports
• Automated in-app data scrubbing
• Support for smart field mapping
• Intelligent handling of import failures

Commission Plan Design and Management                                        

• Customizable plan mechanics (e.g. SPIFs, accelerators, clawbacks, etc.)
• Ability to process payouts by plan and/or by pay period
• Ability to measure multiples and quotas per payee
• Ability to calculate payments on differing schedules
• Ability to import organizational hierarchy of any size and any dimension (e.g. product, territory, role)
• Supports several relationships between payees (e.g. rollup, matrix, dotted line)
• Version control
• Ability to calculate compensation on a transactional or summary basis
• Supports exception handling for employee lifecycle changes (e.g. promotions, departures)
• Model and test changes to compensation plans, including variables, reporting, etc.
• Supports multiple currencies, ensuring coherent data consumption, calculations, and reporting
• Inquiry management and resolution feature
• Supports advanced permissioning (sharing entire commission plans or individual components of a plan with non-admin users such as managers or team leads)        
• Automated workflows for up to eight approvals on any given payout (includes notifications associated with approvals)
• Ability to send secured contracts with eSignature (e.g. DocuSign integration) that signers and admins can download on-demand within the tool
• Ability to communicate about statements in-app

Commission Accounting                              

• Override and auditing reporting
• ASC 606 compliance
• IFRS 15 compliance
• In-house accounting expertise
• Ability to manually adjust accounting rules
• Ability to lock periods
• Ability to identify commission accounts as capitalizable versus expansible
• Supports multiple commission classifications (i.e. by department, legal entity, type, period earned, etc.)
• Self-serve user provisioning and deprovisioning

Performance Analysis and Cross-Functional Reporting            

• Customizable reports and dashboards
• Access to real-time insights
• Ability to build out aggregated reports from compensation plan data
• Ability to create robust visualizations from compensation plan data
• Visibility into different levels of attainment (e.g., quota, variable compensation)
• Visibility into historical commission tracking
• Easily to filter data
• Ability to customize how end users interact and view a dashboard
• Reporting of monthly accruals
• Statement preview available in Salesforce
• Reporting of compensation processing issues (e.g. exceptions, adjustments, manual overrides)
• Ability to track and report on employee, team, and organizational performance
• Customizable payout export templates available to streamline report creation
• Preview available for admins prior to being formally released to payees (admins have visibility into up-to-date commission totals within periods)
• Automated email notifications for statement reports and approvals

Sales/Revenue Planning                              

• Robust modeling capabilities
• Real-time calculation capabilities
• Robust visualizations (tables, charts, graphs, maps, etc.)
• Supports “what if” calculations (project commissions based on different revenue scenarios)
• Access to forward-looking statements
• Supports alignment of compensation structure and organizational objectives
• Quota and territory planning
• Capacity and coverage planning
• Commission expense planning

Security                                             

• Secure performance monitoring
• SOC 1 Type 2 and SOC 2 Type 2 certifications
• Log in with traditional credentials, OAuth, or Single-Sign-On (SSO)
• No record of data breaches or investigations associated with product vendor
• Ability to support multiple permission types (e.g. users may be designated as admins, payees, or read-only viewers of statements)
• Ability to secure access to statement reports

Testing/Additional Functionality                              

• Audit logs (column-level edits, time and user stamped, shows associated change details, etc.)
• User impersonation functionality
• Log of all jobs performed in-app
• Sandbox instance

Are you ready to drive growth by aligning and motivating sales teams? If so, we’re here to support your SPM journey and help you identify the best SPM solution for your needs, schedule a meeting here.