Before Launching your Incentive Compensation Management (ICM) Solution:
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1 Incent Perform Grow Before Launching your Incentive Compensation Management (ICM) Solution: KEY STEPS TO PREPARING FOR ACTIVATION
2 ? The ICM Solution is Selected Now What? Companies spend a significant amount of time and energy reviewing their ICM options, interviewing vendors, evaluating approaches, and, eventually selecting their ICM solution. Selecting a software is a big step in a company s ICM journey. ICM is the technology platform they hope will take their company to the next level by aligning their overall strategy with individual and team incentives, by improving analytics, and integrating internal workflow. Once the appropriate vendor and the right technology solution for your company have been selected, it s just beginning. Following the selection process, companies prepare for implementation or activation, and this phase is a key part of the ICM process. Before You Launch The Activation Process When done correctly, a proper activation process will quickly and accurately ensure an ICM solution works effectively to assist a company towards achieving its goals. There are some key steps that companies must take when entering their activation process. Get Your House in Order Take a serious look at where the company is headed and how the ICM solution can help. ICM is more than just a technology platform it draws a direct connection between goals and behavior. So, that s the starting point goals. Do an honest assessment of the company by asking some key questions. Where does the organization want to go? What type of company does it want to be?
3 In what areas are it s capabilities? Where is there room for improvement? In other words What are the goals? This is vitally important, as the overall strategy is the starting point of the ICM process. Then evaluate your current plans. Are they rewarding behavior that aligns with your goals? Conduct an Environmental Scan After you take a hard look internally, turn your gaze outwards and take a hard look at your environment. What is the landscape within which the ICM platform will operate? Ask yourself: Who are our stakeholders? What is their workflow? What will be the impact on the existing systems? This review brings together some of the thinking that will need to be done to properly determine your goals and implement an effective ICM system. Bring Stakeholders to the Table The ICM solution will impact teams and departments throughout the organization. Make sure everyone necessary has time to attend the requirements sessions or has a chance to review the requirements documentation. SALES DEPARTMENT Tracking goals, measuring performance and making commission payments
4 HUMAN RESOURCES Setting goals, measuring performance and planning HR programs FINANCE DEPARTMENT Budgeting, forecasting and organizational planning EXECUTIVE MANAGEMENT Strategic development, resource allocation and forecasting Involve people from across business units. Have them outline their business needs. Make sure their priorities are heard. With the group together, you should also get consensus on your approach for some key steps, including: Planning your test cases. Who will do the testing prior to the system going live? Plan your end user training. Who will develop the training? When does it need to be ready? When and how will the training be rolled out? Commit to Flexibility and Effective Communication It s important to get everyone onboard all the stakeholders around the table, identifying their business needs. However, there may be conflict between the business units and the IT department. This is not the nature of the technology. It s simply the nature of organizations. This potential conflict can absolutely be overcome if it s addressed early in the activation phase. The solution lies in clear and open dialogue between the IT department and the business units. Each business unit must commit to flexibility. Everyone must be open to collaboration and willing to entertain new ideas and suggestions. A flexible and respectful atmosphere of cooperation is the best platform from which to launch the activation process.
5 Enable the ICM Champion Every corporate initiative needs a sponsor, or champion, who provides the ongoing guidance, advice, direction, inspiration and hard work necessary to keep the initiative humming and moving towards its goals. Make sure your ICM champion has the company profile, resources and opportunity to embrace the technology and inspire your team. Make a Go-Live Checklist The pre-activation process is driving towards a go-live date. Remember ICM is a technology initiative, but it has a company-wide impact. Think through the activation process and anticipate challenges. Be prepared to develop and communicate detailed plans for: Entry and exit criteria System verification Change management Transitioning Legacy data archiving Regulatory compliance The initial implementation is only a starting point. The actual process is cyclical. Ensure Data Cleanliness & Reliability Stored data needs to be accurate, reliable and consistent. The good news is a complete ICM platform is less error-prone than the traditional spreadsheet approach. However, transitioning the data into the ICM environment is the challenge. Dedicate the time and resources to examining the data against the original records. It is imperative to establish an accurate baseline with dependable data going forward. Your activation will also go more smoothly if you can identify how to align the different data sets. For example, if employees have a legal name in the personnel records, but a preferred name in the CRM tool, how can the data sets be aligned?
6 Testing Strategies Testing is an important part of the implementation phase. Rarely do companies enjoy the luxury of having a test run of their performance. ICM technology offers that luxury take advantage of it. The testing phase should allow you to: Run scenarios and determine how certain performance measures will affect your goals Test the system parameters Establish a baseline and forecast future performance Model different compensation plans and examine the impact on teams, resources and results The testing phase is valuable, but it should not take on a life of its own and overtake the entire preactivation process. A detailed strategy, including a checklist of items to test, will ensure efficiency, speed and accuracy during the testing phase. Identifying Unexpected Scenarios Company leaders expect to encounter successes and setbacks. Surprises, however, cause real frustration. This is certainly true when working on an ICM activation. The pre-deployment period is the time to examine the solution closely, test scenarios, push the limits of the system, and identify any areas where there may not be proper alignment that would drive corporate goals. By relying on the support and experience of a trusted vendor, unanticipated obstacles can be circumvented and managed effectively.
7 Understand Business Processes Incentive Compensation Management (ICM) is based on calculations, and those calculations are based on the company s business processes. By understanding the business process behind the calculation, the company is better able to: Optimize the calculation Make recommendation to ensure better alignment In both cases, understanding the relationship between the business process and the calculations is critical to success. Develop a Risk Management Plan Risk cannot be eliminated. But it can be managed. Think ahead, identify the risks, plan a response, and put the resources in place. The risk management exercise can identify: UNNECESSARY COSTS TIMEFRAME OVERRUNS OVERALL PROJECT INSTABILITY Thinking about these potential problems in the pre-implementation phase will not only help develop a risk management plan, but those discussions will almost certainly help avoid these pitfalls.
8 Conclusion A company s ICM journey does not jump simply from vendor selection to deployment. The pre-activation phase introducing the system to your organization, testing its effectiveness, preparing to troubleshoot this stage is critical to making an ICM system work optimally and working toward the company s longterm goals. About Iconixx Iconixx, a global pioneer in Incentive Compensation Management, delivers innovative solutions for companies of all sizes, across verticals and around the world. Drawing on its substantial tenure and vast knowledge capital in ICM best practices, Iconixx enhances efficiencies, improves visibility and drives workforce performance, across the organization. The Iconixx suite of solutions provides holistic support in a flexible manner to save money, eliminate errors and streamlines processes to drive business results and ensure client success. For more information about Iconixx visit Executive Center Drive, STE 250 Austin, TX ICONIXX
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