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    Out of the Box, or Out of the Question: What Won't Your Incentive Compensation Management System Do?
    Out of the Box, or Out of the Question: What Won't Your Incentive Compensation Management System Do?
    Out of the Box, or Out of the Question: What Won't Your Incentive Compensation Management System Do?
    Ebook75 pages46 minutes

    Out of the Box, or Out of the Question: What Won't Your Incentive Compensation Management System Do?

    By David Kelly

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    About this ebook

    As you embark upon your Incentive Compensation Management system implementation, it is important to have realistic expectations about what the system can, and cannot, do. This highly accessible book takes you through common gaps in ICM system functionality that can impact the success of your system.

    David Kelly, the Compensation Architect, has been working with customers to implement ICM systems since the late 1990s. He brings a perspective to projects that goes beyond technology. He believes the first priority is to identify the fundamental business problems that must be solved, and only then is it time to start thinking about the best tools to use for a solution.

    Mr. Kelly is the author of "The Book on Incentive Compensation Management: The Systematic Administration of Variable Compensation in the Enterprise" (Compensation Architect, 2014).
    LanguageEnglish
    PublisherLulu.com
    Release dateJul 31, 2016
    ISBN9781365291210
    Out of the Box, or Out of the Question: What Won't Your Incentive Compensation Management System Do?

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      Book preview

      Out of the Box, or Out of the Question - David Kelly

      Out of the Box, or Out of the Question: What Won't Your Incentive Compensation Management System Do?

      Out of the Box, or Out of the Question:  What Won’t Your New Incentive Compensation Management System Do?

      Copyright

      Copyright © 2016 by David Kelly

      All rights reserved. This book or any portion thereof may not be reproduced or used in any manner whatsoever without the express written permission of the publisher except for the use of brief quotations in a book review or scholarly journal.

      First Printing: 2016

      ISBN 978-1-365-29121-0

      The Compensation Architect

      35 Linden Drive

      Santa Clara, CA, 95050

      www.CompensationArchitect.com

      Chapter 1:  Introduction

      Thanks very much for taking a look at this book.  I hope it will be useful to you.

      In this section we will discuss why the book was created.  Then we’ll talk about some context and conventions I’ll be using as we go, just to make it all clearer to you as you read.

      Why this Book?

      I was quite puffed up when I was first introduced in a sales meeting as our solution architect a few years ago.  Hey – I must be doing something really cool!  It didn’t occur to me to wonder why a purpose-built application, designed to solve a common business problem, would even need an architect to make it work for its customers.  That is, until years later when an irate customer asked me that very question. I didn’t have a good answer to it then, but I think I might have one now.

      I think the answer is, most business technology applications look like the problem they solve.  In many systems, the requirements document serves as the design document for the system implementation.  Requirement X is met by system functionality Y, and only by Y, which directly applies to X and only X, so the requirement is also the solution.  The problem is clear and has well-defined edges, so anything inside the borders is met by explicit product functionality, and anything outside the borders is out of scope.  You might like the performance or workflows in the Red Product better than the Green Product, but they do what they do, and what they do is exactly what you expect them to do.

      But ICM is different.  The vendors have created large, highly flexible systems that designed to work in disparate industries and for disparate customers within industries, even if those industries and customers have entirely different sets of problems and processes that must be managed.  ICM systems are hugely complex, with powerful functionality and some surprising gaps in each.  So for any or all given ICM systems, there may be several ways to solve a compensation problem, and some will be better than others and you will want to choose the best one.  But maybe all of the options are lousy, too.  It could be that there is no system functionality that will manage the complete requirement.  Some of the potential solutions might be outside the system.  Some might involve a business process change.  It takes someone who is more than a product expert to determine the best, or possibly the least-worse, way forward for a customer’s problem that falls at the intersection of technology and processes – which is why I and several other people exist as ICM solution architects.

      Further, ICM is practically unbounded; it’s really hard to know where the edges of the incentive comp problem are.  Calculating commissions and bonuses?  Yes, that is certainly in there, but everything else is up for discussion.  How about data acquisition and cleansing, transaction enrichment and aggregation, sales crediting, processing schedules, reprocessing prior results, reporting and analytics, SPIFs (Special Performance Incentive Funds – typically short-term incentives applied as drivers for special sales efforts), territory and quota management, payments, accounting, auditing – are all of these included?  Possibly, or possibly not.  But even if the vendor would prefer to say a particular function is not ICM, some functions might have to be forced into the system because there is no place else to do them properly and they are needed

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