Full-spectrum Incentive Plan Management
You could make a killing if you could roll out a compensation plan that would cover your quickly evolving new product lines. While that concept seems simple, actually designing, automating and implementing such a plan is not. Especially if you want to move fast. Tailoring an incentive plan to your business environment that works within your sales process and business rules requires design savvy. Choosing and customizing the best software solution takes time. And implementing and maintaining your program could be more than your company can manage right now.
An integrated incentive management solution could be the answer. In early May, three compensation industry leaders, Sibson & Company, Incentive Systems and Synygy, formed a partnership to combine their design, technology and integration expertise. Their new company, One-Comp, offers a range of services and solutions for design, deployment, maintenance and management of incentive compensation plans.
One-Comp, with its combined expertise, can save you the trouble of looking for consultants, technology products and implementers that can work together. Nina McIntyre, vice president of marketing at Incentive Systems, explained that businesses were often choosing to work with the three companies on compensation projects, and so the trio decided to partner. The team jointly developed One-Comp's assessment tool to review a customer's plan, identify key incentive issues and document the plan and its requirements. The tool is designed to help minimize implementation delays and reduce the money drain from poorly designed plans. One-Comp claims that it can move through the design-to-implementation cycle 50 percent faster by eliminating duplicative data integration steps.
Perhaps you would like your managers to hire better sales reps. Or maybe you would like your sales reps to push more new product lines. There may be many kinds of sales behavior you'd like to motivate your staff to adopt, but you need a way to be sure that they each get credit for their own behavior and accomplishments for that to happen successfully. Keeping track of individual salespeople's actual closed revenue is difficult to do on separate, static spreadsheets. An incentive solution that can adjust to changing compensation plans as well as account for changes in reported revenues over time would be much more effective. McIntyre points to a report in Computer Retailer News that noted the discovery of a $70 million gap between actual booked revenue and recorded commission-based revenue at Lotus. She asks, "If Lotus can't manage compensation on spreadsheets, then who can?"
To expand your business, you need a way to incorporate dynamic productivity goals into your business processes through your incentive compensation plan. One-Comp's partnership provides the following strengths to help you develop more effective reward strategies and programs:
Sibson & Company, a global consulting firm, offers experience in designing customized incentive compensation plans and in providing sales effectiveness strategy.
Incentive Systems provides incentive compensation software that allows companies to make changes to compensation plans on the fly, shorten compensation pay cycles, increase payment accuracy and communicate results through Web-based and e-mail reporting.
Synygy manages technology implementation and configuration. Using processes developed through working with clients over the past eight years, the company designs data validation procedures to improve accuracy. Synygy provides ongoing management services, software support services and ASP hosting services.
One-Comp offers its partnership's expertise in part or whole, depending on your needs. The company breaks the design-to-implementation cycle into four parts: analysis, design, implementation and rollout. One-Comp compresses the four steps in creating its end-to-end solution to reduce time and costs and provide greater alignment of your compensation plan with your corporate strategy. You may choose to use any of One-Comp's services or solutions and employ others later. If you opt for the complete solution, One-Comp owns the entire relationship and provides a single interface with a consistent client partner.
Keeping Up With Change
Animal health product developer Merial used the One-Comp solution to create a new incentive compensation system for its Small Animal Business Unit's sales organization, which brings in roughly $300 million a year selling products that treat a variety of conditions and ailments in cats and dogs. On a daily basis, the unit serves roughly 17,000 out of a population of 24,000 veterinary practices across the country. A typical rep would have 120 very active customers and another 20 smaller customers.
Mike Prebenda, executive director of the Small Animal Business Unit in Iselin, New Jersey, explains that his staff of 120 field reps needed to adjust to changes. "We are in an industry that is experiencing a great deal of change. The sophistication of our customer base is changing. They are requiring a higher level of service--not just product service, but selling services. Some of the products that used to be primary sellers for us are growing and some are declining, so the product mix is changing very rapidly. We needed a compensation plan that was flexible, allowing us to target those pieces of our product line which were of strategic, long-term importance, giving them added emphasis and yet continue to encourage sales of our mainstay core products."
Merial's Small Animal Business Unit had used an in-house compensation solution that was very primitive. "We are not an MIS department, nor a finance department. We lacked the resources to implement a compensation plan and have it work so that the plan itself was actively directing our representatives' attention and activities, rewarding the type of behaviors we wanted," says Prebenda. Since managing compensation plans was not a company core value, Merial wanted to outsource its compensation plan maintenance.
Merial went to Sibson for assistance in designing its compensation plan, bought a new software solution and approached Synygy for implementation support. Merial then chose One-Comp to integrate the design along with the implementation and management.
While the company is still in the process of bringing up its compensation plan, Prebenda says the plan design has achieved the company's starting objectives and he expects to put the system into place in six months or less. "Typically, for a company this size, we'd start on a 12- to 18-month effort. We don't have that kind of time."
"Last year our sales management team spent a significant portion of their time addressing compensation issues, including revising commission rates and quotas, due to the turbulence in our marketplace. This placed an administrative burden on our people and systems and distracted our sales team from their main job," Prebenda says. "The One-Comp solution helped us fix the problem by enabling us to design compensation plans and create an automated system to manage them. Now our employees are focused on the right activities, which has resulted in record sales this year."