Here at Sales Cookie, we help our customers automate their sales incentive programs. If you’ve invested time & effort building a solution to calculate sales commissions, hats off to you!
You already know how much NOT automating sales commissions is costing you – not just in terms of overall ROI, but also in terms of employee morale or ability to scale your sales force.
Unfortunately, while all in-house commission management initiatives start with good intentions, they typically fail to deliver acceptable results as changes are needed. Here’s why.
Most businesses operate within a fast-changing business landscape. Their sales teams go through cycles of expansion and contraction. They have sales promotions, product launches, pricing changes, new territories, etc.
To respond to ever changing business needs, sales incentive programs must be highly dynamic. After all, sales commission programs drive sales behaviors. For this reason, making changes to your sales commission program should be quick and easy.
However, without a deep understanding of various sales incentive plans and their underlying logical structure, it’s quite difficult to create a flexible system where requested changes / new requirements can be satisfied incrementally. Most in-house design require significant code overhaul or re-design – even for apparently trivial changes.
And you can’t afford to wait several weeks for your IT team to make changes to (or entirely redesign) your in-house automation. Most IT teams are quite busy. Getting them to deliver changes to your in-house solution at the speed you need can prove challenging. What good is it to you if your IT team can only deploy requested sales incentives 8 weeks after launch?
Sales commission data is highly sensitive data. To calculate sales commissions, your system must have access to all business transactions. It may also require access to additional confidential data, such as employee salaries, compensation information, etc.
It’s a major undertaking to implement a system which properly controls user access to a/ incentive plans, b/ commission-related data, and c/ payouts. For example, your plan administrators should have more access than payees, requiring your system to implement various security roles (ex: “full admin”, “plan admin”, “payee”). The same issue applies to sales managers (they should have some visibility on their team’s performance).
However, implementing adequate access control is just a first step. You also need to think about data retention, secure reporting, and change management. It’s unlikely your IT team will keep up with requests to make changes to incentive plans. It’s even more unlikely they will have time to implement proper at-rest encryption, data retention policies, a comprehensive audit log, etc.
Inevitably, adequate IT security will get in the way of delivering an agile, dynamic, responsive sales commission program. This may force you to compromise on agility vs. security – leading to difficult decisions (or more delays).
Designing a comprehensive, flexible sales commission solution requires a unique architecture. It should be based on a data processing pipeline. It should break down the commission calculation process into independent phases such as filtering, crediting, assignment, etc.
Most IT departments will deliver a “working solution” fairly quickly. However, as additional requirements are added (ex: cumulative tiers, non-recoverable draws, split commissions, recurring deals), your in-house solution may start to fall apart – or morph into a Frankenstein-like monster. Your implementations may require questionable one-off “quick fixes”, or extensive system re-architecture to accommodate even minor changes.
You may also get into arguments with your IT team as they explain that “this type of change will take 8 weeks” or that “we don’t support this type of calculation”. Also expect some hidden costs down the road. Any IT system must be maintained, upgraded, or evolved over time. For example, you may have to move your in-house system to your new cloud provider as you migrate IT resources to the cloud.
If you’ve decided to build an in-house sales commission automation, you already understand the cost of NOT automating sales commissions. However, in-house implementations can prove costly because it’s quite difficult to design a system which is resilient to change and delivers adequate security (access control, data retention, etc.). Visit us online to learn more about how you can automate a secure and flexible incentive program without writing a single line of code!