8 Questions to Determine When to Upgrade from Spreadsheets to an ICM Solution

While spreadsheets are often the most common entry point into managing commissions, they aren’t purpose-built for scaling incentive compensation management as complexities grow alongside your business – which means that down the line, many common challenges either can’t be appropriately addressed, or become a nightmare to accomplish.

But how do you move from an “If it ain’t broke, don’t fix it!” mindset towards more urgency to make a change when the time is right? These 8 questions can help you recognize the right time to make the leap from spreadsheets to a more robust ICM solution.

Do we have a single source of truth for commission data?

The data that’s needed to calculate commissions in an accurate and timely manner often comes from multiple sources, and not all of them talk to each other. For example, the system used to collect and track invoice payments may not be updating in the CRM where the original deal was stored. It can get tricky (and quite annoying) having to reference multiple systems  to get a complete picture, especially as the number of plans, payees, and components grow to reflect organizational changes. For those managing comp, life at work simply becomes easier if there’s a centralized place that stores all of the data that’s tied to comp.

Are there any safeguards built in to prevent human error?

The road to commissions may be paved with good intentions, but even the teeniest-tiniest error can trickle down and continue causing pain even years later. This could look like entering a decimal point incorrectly to unintentionally inflate a rep’s base rate, entering a one-time exception in a column used for recurring calculations, or accidentally working off the master copy of a plan to troubleshoot an issue. A good question to ask yourself is, “How much would I trust an intern to poke around our commission plans?” If the answer is along the lines of, “Eh, not so much..”? It’s probably time to start exploring more error-proof ICM solutions.

Do we expect roles and compensation structures to stay the same as the team grows?

Even if you believe your roles and compensation structure won’t change, or they’ve remained the same for 10 years, you never know when the macro-environment will force a change (as many SaaS organizations are feeling the effects of now). When these changes happen, the modifications that are needed compound when you’re living in spreadsheets. It’s better to ask yourself not if, but, “When my plans do need to be updated as a result of an organizational change, how difficult will that be with the current system I have in place?”

Is our system scalable to support implementing exceptions such as splits or overrides?

Based on conversations with newly-implementing clients, we see this as one of the top reasons comp management teams make the switch to an ICM solution. If you do apply crediting logic to your commission plans in spreadsheets, how scalable is the plan? How difficult is it to adjust roll-ups and relationships? How much additional time do you need to add a split or an override into a plan? These use cases are common with many mid-market and enterprise organizations – having a solution that scales with you is a big deal.

Do our reps have visibility into commission performance today – both during and at the end of pay periods?

According to CaptivateIQ’s Compensation & Motivation Pulse survey, visibility into commission statements remains top of mind for many reps – and yet 42% aren’t always confident that their payouts are accurate, highlighting the need to deliver transparent pay details in a timely manner to boost motivation and productivity. In addition, simply seeing that record of how much they were paid isn’t always enough – 85% of reps perform their own calculations on the side to compare their totals and ensure accuracy, which also takes time away from revenue-generating activities. Ensuring accurate statements for each individual rep in spreadsheets, however, can get out of control very quickly – and end up eating away at comp admins’ time as well. If you find yourself in that pickle of not being able to deliver consistent visibility, it’s likely time to invest in an ICM solution that can give you the ability to provide additional detail in the aggregate or line item level to unlock additional seller insights. 

Can reps properly funnel requests and inquiries to their compensation admin in a scalable and timely manner?

Many of our comp admin readers can likely answer the majority of incoming questions they receive from reps. But what about the questions that require manager approval or a second set of eyes? These can quickly get out of hand when you’re working with long email chains and multiple Slack or Teams threads. Modern ICM solutions have methods in place to route inquiries to the appropriate teams and escalate when needed, all in a single solution. This cuts down on the back-and-forth, and results in faster payouts that keep reps motivated and productive.

Can we easily collate and report on commissions and performance data in the aggregate?

Raise your hand if you’ve ever created the perfect commission plan – only to find out it’s a nightmare to collate the data and report on key metrics.  Is it easy for you to build the reports you need when you need them? Are you able to quickly grab an aggregated metric when asked for it? Reporting is another top pain point we hear from our new customers, and if it’s becoming more and more difficult to pull the data you need to derive insights or show plan performance, it’s time for an upgrade.

Can our plans be easily fine-tuned to drive the right behaviors that efficiently drive growth?

When plans are decentralized across numerous spreadsheets, it’s easy to jump to conclusions after looking at a small subset of the plans. It can be ineffective and misleading to follow a lead using limited outlier data. With an ICM solution that includes built-in reporting, you can collate and build reports, visualizations, and dashboards to allow you to actually fine tune adjustments based on how all plans are performing, not just the behavior you’re perceiving from a few outliers.

Spreadsheets may be sufficient for managing commissions in the early stages of a business, but as complexities increase as the organization grows, they can all too quickly become unwieldy and prone to errors. When it's time to scale your incentive compensation management program, the sheer overwhelm alone will likely push you in a different direction – and these questions can help you confirm whether now is the right time to make a switch.