So, you’re interested in taking your Incentive Compensation Management (ICM) systems to the next level. This means you’re outgrowing your existing systems – congratulations! By embracing an ICM solution, you’ll be able to unlock a world of advantages, including real-time performance insights, error reduction, streamlined automation for faster payouts, and so much more. The reality is that home-grown compensation management systems work… until they don’t. And if your current solution is no longer meeting your needs, it’s a serious roadblock to progress. An integrated ICM solution has transformative benefits for both your sales reps and compensation administrators, removing operational barriers and ultimately helping drive revenue growth. However, this leaves the burning question: How much does ICM cost? This article explores the two types of ICM implementations and takes a deeper dive into their associated costs.
Let’s take a walk into the world of ICM costs so you can plan for how to take your sales performance to new heights.
What is SPM Again and How Does it Relate to ICM?
As a quick recap, Sales Performance Management or SPM is a field of business operations that focuses on improving sales productivity and operational efficiency. At its core, SPM involves the use of technologies to monitor and guide sales performance, align their activities with the company’s broader business strategy, and incentivize effective selling behaviors. The key features of an SPM solution include tools for sales planning, territory management, centralized dispute resolution, and more. However, most businesses become introduced to SPM because they need help calculating and administering compensation. As such, Incentive Compensation Management, or ICM, is the most prominent component of SPM solutions. In fact, this is why it’s offered as a standalone solution.
Whether you need a new Incentive Compensation Management system or the full suite of SPM tools, these solutions are designed to expedite and improve all operational processes related to tracking and managing the performance of sales. The ultimate goal, of course, is facilitating business growth.
Key Features of SPM Solutions
- Incentive compensation management (ICM)
- Sales and quota planning
- Territory management
- Workflow automation
- Automated data management
- Analytics and reporting tools
- Centralized dispute resolution and approvals
What are the Different types of ICM Solutions?
There are many ICM software providers, each with their own perks and drawbacks. However broadly speaking, these break down into two primary categories of implementation: tailored solutions, which are built to the business’s unique needs, and standard solutions, which are out-of-the-box models that are easy to adopt but that offer little customization to start. At InnoVyne, these service offerings are known as Enterprise Implementation and InnoVyne Express, respectively. More about each below.
Enterprise ICM Implementation
We’ve devised a methodology for Enterprise Implementation called ProAct, which is how we ensure consistent, positive results, turning one-time customers into happy partners over the lifespan of their investment. It begins with a comprehensive discovery process where we learn all functional and technical business requirements. Equipped with this critical information, we design the blueprint of the solution, conceptualizing how it would work from start to finish. After client approval, we begin the configuration process. Next, a separate team runs a series of rigorous tests ensuring model accuracy and efficiency. Finally, we launch the product for full scale adoption.
Our commitment to our clients extends far beyond the confines of the initial implementation. We provide comprehensive system support, interactive training, and adept administrative assistance on an on-going basis, ensuring your model remains current and fully optimized. Our objective is to boost your system’s productivity, effectively alleviating your workload. Whether your needs encompass a system update, performance optimization, or simply assistance in managing compensation, our team at InnoVyne holds an in-depth understanding of your operation. With this knowledge, we can seamlessly integrate into your operation, underscoring our dedication to your continued success.
How much does it cost?
Enterprise Implementation is an approach that is as unique as the business it serves. The costs of this method are influenced by several factors, including the level of customization, business size, complexity of the compensation model, and supplementary services such as testing. Despite the variability, four key cost categories consistently emerge:
- Cloud Licensing and Administration Costs: These recurring costs cover the use and maintenance of the ICM software. As an example, a composite organization in a Forrester study using Varicent Incentives paid $1.5M annually for 2,000 licenses and associated administrative costs.
- Implementation and Planning Costs: These one-time expenses are related to the preparation and implementation of the ICM solution. The composite organization dedicated five full-time equivalents (FTEs) to the planning process.
- Professional Services Costs: Engaging an expert consultant like InnoVyne for planning, design, and implementation is advisable. For the composite organization, this accounted for $640,000 during the initial phase and first year.
- Training Costs: The cost of training your sales staff to use the new SPM solution is also a factor. The composite organization spent $217,200 to train 2,000 sales employees over a period of two years.
Who is Enterprise ICM Implementation for?
Enterprise Implementation is the ideal solution for businesses with complicated compensation plans featuring multi-tiered pay structures, multiple territories, or those that require diverse performance metrics with a more sophisticated approach to compensation management.
InnoVyne Express ICM Implementation
InnoVyne Express is our turnkey Incentive Compensation Management solution purpose-built for mid-market businesses. The design and architecture of the model is already fixed, so the only configuration required to get started is around preparing the right data for integration in the right format. What’s more, the whole ICM implementation can take as little as four weeks.
The appeal of InnoVyne Express is that you get access to a state-of-the-art ICM solution right out of the box. No other solution can rival its time-to-value proposition, which can play a critical role in accelerating business growth and helping you scale. While this model is crafted to accommodate the needs of most medium-sized businesses, it may not reflect the unique needs of your individual enterprise. This means that as you evolve, you may want to customize your solution to better address your requirements. Thankfully, InnoVyne Express is as flexible and easy to update as any of our bespoke solutions.
How Much Does InnoVyne Express Cost?
For businesses seeking a ready-made solution for compensation management, InnoVyne Express offers an economical alternative that can help you hit the ground running. This model was built after aggregating 10+ years of experience tailoring solutions for individual businesses. As such, it delivers functionality and capabilities that would satisfy most mid-market organizations without any need for customization. However, as the business evolves, it is also as amenable to configuration as any Enterprise solution. Here is a breakdown of the costs:
- Cloud Licensing and Administration: This is a recurring cost to the software provider, covering the use and maintenance of the technology. It varies based on the number of users as well as the tools provided. Based on a composite organization in Forrester research, 50 licenses could cost $37,500, paid annually.
- Implementation and Planning: This is a one-time expense, related to the preparation and implementation of the solution. For a typical organization suited to InnoVyne Express, you may need to dedicate the equivalent of one to two full-time staff (FTE) for a period of four to six weeks.
- Professional Integration Services: This is the one-time fee paid to InnoVyne for building and integrating the model into your business. This includes preparing your data, integrating other business systems such as your CRM or HRIS, and more. While the estimate for this will vary with each organization, it is roughly estimated at 1.5 times the cost of licensing the software. For the standard InnoVyne Express client, this is averages to $50,000.
- Training Costs: The costs of training your staff to use your new ICM solution ought to also be factored into the cost of system adoption. Typically, over a period of two years, this runs an average of $2,500 per team member. However, while training is available for InnoVyne Express customers, we do have ample documentation and video modules available that can suffice in getting your team up to speed. As such, for InnoVyne Express this cost is optional and many businesses choose to simply complete the Varicent training course, which is available with the solution.
Hypercare: In the first 12 weeks after Go-Live, InnoVyne offers a dedicated team to support InnoVyne Express customers in various ventures using their new model. This varies from continued training and enablement to executing processes and building a roadmap for scaling the solution to other business units. The average cost of this service totals $8,000.
Who is InnoVyne Express for?
InnoVyne Express is a great ICM solution for businesses who need to hit the ground running, without undertaking a protracted, resource-heavy implementation process. If your needs can fit within the broad spectrum of standard compensation needs, this model has proven its mettle over time. Best of all, it accomplishes this in a fraction of the time and cost of a tailored implementation, while still ensuring uncompromised access to comprehensive features, computational rigor, and full use to the most robust software on the market.
Why is it so hard to find out how much ICM costs anyways?
In today’s competitive business landscape, many firms guard their operational processes, especially cost structures, with great care. While some hide behind veils to prevent potential sticker shock, others shy away from announcing numbers to avoid committing to costs that ultimately vary with the scope and scale of requirements. Nevertheless, at InnoVyne, we champion transparency because we view it as the bedrock of trust with our clients. By shedding light on our processes and associated costs, we aim to foster meaningful discussions that will pave the way for more conversations to come. We’re confident in the value we bring to the table, and as you become more acquainted with who we are, we’re confident you will recognize it too.
For a deeper dive into the total economic impact of adopting an ICM solution, including the expected ROI, check out this article.
