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How To Communicate Compensation Plans Effectively

2015 is nearly upon us and many of you are preparing to roll out new sales compensation plans and supporting documentation. How do you ensure that your plan document has all the right ingredients and is communicated to the sales reps in the best way? Here are a few tips you may find useful.

Distribute the Plan Document Early
It is critical distribute the plan documentation as close as possible to the start of the plan year, preferably within the first week of the new plan year. At least two states – California (AB 1396) and New York (Section 191 of the Labor Law) – require that employees who are paid on commission must be provided a written contract which sets forth the method by which the commission shall be computed and paid. These laws further require that the employer provide a signed copy of the commission agreement to the employee and obtain a signed receipt for it. Delaying indefinitely (or skipping) formal documentation is no longer simply a bad business practice but put you on the wrong side of the law. Do whatever you can to get your plans out on time.

Setup Webinars
Often, major changes are incorporated in the new sales plan and simply pushing the document to the sales reps is not enough. If there are significant changes to the design, setup webinars with the reps and walk them through the plan components. Give them a platform to ask questions and clarify; their questions may even give you important inputs to make suitable changes to the document.

Provide Clear Guidance on How to Sign the Document
Many systems allow you to capture an electronic signature. However, sales reps often plead ignorance about this when clear instructions are not provided. Focus on a couple of things here: First, provide a clear guidance on the signature process. Second, clearly indicate the due date and send reminder emails couple of days before the due date. Send follow up emails to those who miss the deadline and copy their direct manager. And consider what some companies do – withhold commission payments until you have a signature on file.

Make Your Plan Document Lean and Precise
We often see plan documents that are too bulky which make them tedious to read and hard to follow. Most of the bulk comes from the Terms & Conditions of the compensation policy. Focus the document on the plan components and corresponding business objectives and make the Terms & Conditions as a common appendix.

Consider Adding a Clause About Windfall Payments
You may periodically experience a windfall sale – a large sale that the selling rep didn’t have much influence over. This often translates to a large, singular payment of two to five times the annual target commission target. Instead of simply paying this out, consider the safeguard action of having a windfall clause in your plan like “Under extraordinary circumstances, the company has the right to adjust the total commission payment based on a common sense business approach.”

Use Charts and Graphs for Visual Appeal
The compensation plan document can be a great motivational tool. If you include graphs and charts which creates an imagery of how compensation figures grows when attainment levels rise, it attracts your sales reps attention immediately. A picture paints a thousand words!

Communicate Linked Components Clearly and Concisely
Some plans will link the payment of one component with the performance of another component. For example, a sales rep could carry both a product and a service quota. Companies that link components don’t want a rep to be satisfied with payment on a single component at the expense of the other. Typically these plans work in such a way that the rep does not get a product accelerator unless he also meets the service quota (or vice versa). Numeric examples should be used to help the rep understand their compensation under various scenarios. Each scenario can depict a service-product quota break up and projected earnings.

Cover a Single Position or a Role
There can be situations where an individual has carried out the responsibilities of two roles for a limited period of time. For example, take the case of a manager who has filled in for a sales rep who has quit the company. For such cases, do not create a new plan. The individual should be assigned two separate plans for each position or handled as an exception and with senior management approval.

Now that you are ready to go out with your plan, one last thing!

Make sure the plan document is reviewed and blessed by all stakeholders (i.e., HR, Legal, Sales, Finance) before you communicate to your sales reps. The last thing you want is to make yet more changes to the plan document after the rollout.

Make it a good year!

5 Lessons SPM Professionals Can Learn From The Mayflower Pilgrims


The Mayflower’s voyage was a test of will and survival. The pilgrims had sold nearly all their possessions and worked hard to pay for their passage. The voyage was a stormy and unpleasant one with many of the passengers so seasick they could scarcely get up. After more than two miserable months on the Atlantic Ocean, the band of 102 people finally managed to reach the New World.

The colonists spent the first winter, which only 53 passengers and half the crew survived, living onboard the Mayflower. Once they moved ashore, the colonists faced even more challenges. During their first winter in America, more than half of the Plymouth colonists died from malnutrition, disease and exposure to the harsh New England weather. Without the help of the area’s native people, it is likely that none of the colonists would have survived. An English-speaking Pawtuxet named Samoset helped the colonists form an alliance with the local Wampanoags, who taught them how to hunt, forge, and grow local crops. At the end of the next summer, the Plymouth colonists celebrated their first successful harvest with a three-day festival of thanksgiving. We still commemorate this feast today.

Sales Performance Management professionals can learn a few lessons from the way the pilgrims battled the odds and demonstrated their survival instincts. We listed some of them below:

1. Have faith in your purpose
The pilgrims were known for their unwavering conviction of reaching their destination. They had a strong purpose to settle and had full faith in their belief in God and confidence in themselves to survive the testing ordeals.

From an SPM professional’s standpoint, having a clear goal or purpose is crucial for sustaining your performance. You should clearly understand how your role in sales operations enriches the effectiveness of the salesforce and how the belief in your own contribution supports and drives the strategic goals of the entire organization.

2. Practice Discipline
The Pilgrims demonstrated an example of disciplined living, not only by completing the long and difficult voyage but also the way they had survived in a new and completely unknown geography by being adaptable and flexible. Their ethic of self-mastery and discipline is a learning deck for SPM professionals.

An SPM professional’s job has multiple facets. You cannot afford to lose sight of one at the expense of another. You must constantly work towards making the salesforce more productive. You work on providing better analysis to help them make better and faster decisions, shortening the sales cycles, increasing the sales frequency, and increasing sales deal size.

It’s about understanding your role, committing to the process and delivery schedule, understand how you fit into your role, communicating with the key stakeholders, letting them understand and appreciate your role, and taking proactive steps rather than just let wait for people to come and ask for things.

The practice of discipline to drive salesforce efficiency with flexibility and adjust processes to meet business demands is the hallmark of your success.

3. Care About Others
The Pilgrims had social concern. They lived with locals who looked different than then did and had a different religion and culture. They knew that they were citizens of another world, but they sought to improve the world they were passing through. The Pilgrims made their new world better, not by tearing down the old, but by constructive work and fair dealings with their new neighbors.

In an SPM professional’s world, there are multiple stakeholders like Sales, Finance, Human Resources, Legal and IT involved in a sales incentive plan. You cannot adapt a reckless approach to deal with all these stakeholders. You need to be politically savvy to interface with them while maintaining the focus on supporting the sales organization.

In addition to the internal stakeholders, pay attention to your external ‘customers’ – the salesforce itself. Understand how business conditions and natural disasters can affect them. For instance, when Hurricane Katrina struck in 2005, many of the leading sales organizations adapted to the situation to give quota relief to their salesforces. Remember, your salesforce is your customer. Be compassionate and flexible. Make exceptions to the rules at the right times and for the right reasons to make your sales team function better.

4. Dream Great Dreams
The Pilgrims dreamed great dreams. They dreamed of a haven for themselves and for their children. The Pilgrims’ strength of spirit was forged by a strong faith in God, tough discipline, a foresight, and by regular habits of winning against odds.

As an SPM professional, do not lose yourself in your regular daily activities. Take a holistic approach and look at your function as the binding key between the corporate business goals and sales execution. Put on your system thinking cap to build structured processes around quota setting, territory alignments, sales compensation management et al, not for the sole purpose of moving up the value chain as an individual contributor. You are here to help the entire corporation in achieving its mission. Think big!

5. Triumph of survival instinct
The pilgrims exhibited tremendous fighting instincts during the voyage. After battling the storms and sea sickness for more than two months, when they finally reached the Plymouth Rock, they had no home or food. It was winter, and most of them were too weak, cold and hungry, to survive. However, they had the indomitable spirit and mental toughness to survive the trying conditions.

SPM systems have their own storms and trying conditions – they face frequent data disruptions and continuous changes in strategies and internal IT systems. There are numerous dependencies and external factors that can very quickly bring in significant changes to business processes, incentive plans, and resource availability. This is the reality of your job.

In spite of these difficulties you have to be able to adapt and guide the processes and procedures to support an organizational goal – to make your salesforce succeed in the field. It may be cliché but “change is the only constant factor.” You cannot do much to stop or avoid the changes, but you can accept the changes and adapt your systems and processes to adjust to those changes.

Be tough and let your survival instinct come to the forefront. You will always triumph at the end!

Have a safe and happy Thanksgiving!

Key Questions to Ask SPM Vendors Before You Buy

You have done the hard work with internal assessments of your sales performance management needs distributing RFIs and RFPs. Now you are getting vendors to come in for sales talks, and you better be prepared to ask them the tough questions.

Spectrum and its consultants have worked with well over 100 firms deploying SPM systems and based on our experiences, we have assimilated some key questions that will help you in the final selection process.

The questions fall under three categories – product features, pricing, and support.

1) Product Features

Basic feature evaluation is covered by most teams. Here are some of the important but often ignored areas to question the vendors:

SaaS versus On-Premise – If vendors offer both on-premise and SaaS deployments, understand if the vendor has a clear preference. In case of many vendors, only the SaaS product is being actively managed and upgraded.

Data Integration – Does the SPM product have a built-in ETL tool or does it rely upon other external ETL tools? Some SPM products include this while others do not. Typically if they’re included your end users can do more ‘heavier lifting’ within the product.

Reporting – You should understand what it takes to build new reports. This task is easier in some tools than others. Are there any out-of-the-box reports available? Are they useful for your organization?

Workflow – Another important question to ask your vendors is about the workflow possibilities. Ask the vendor if the software handles disputes, territory alignments, quotas (setting, communication, approval, and/or relief). Can the system generate email and other types of alerts?

Mobile Use – Look at how the end user experience is on mobile devices, especially for sales reps. How easily is that experience supported (heavy and specific mobile configuration efforts or part of general definition that then translate well to mobile)? Understand if the vendor has an app that they use or if this is done via web browser.

2) Pricing

Your vendors may provide you a range of pricing models. You have to spend some time to understand the pricing parameters of the contract and understand what may increase the prices. If it is SaaS model bid, you have to size up the hardware and build out databases. If the actual data used is much more than planned, you will end up paying more (sometimes a lot more) money to the vendor. Ask questions to understand the storage variables and how sensitive this is.

Most companies also base pricing on payee or overall user counts. Get your vendors to provide the incremental cost if your users increase as well as saving if your user counts fall.

Be sure to ask about the pricing after the initial term and seek a rate hike cap on the future pricing. Check if there is an early termination fee, and if so, seek to eliminate or negotiate this fee lower.

Don’t forget to ask about not-so-obvious costs related to implementation, training, upgrades, test environments, data retention, data archival, data backup, etc.

For implementation fees, you may have fixed bid contracts on the table which come with a set of fixed assumptions. Often these assumptions are broad enough that they leave your implementation vendor plenty of leeway to seek additional fees. Pay attention to these assumptions and seek to clarify them so you really understand the implementation parameters of your project.

3) Support

Be sure to clarify the ongoing support model with your vendor – what’s available for purchase and what you are in fact purchasing.

You want to first make sure your vendor provides a helpdesk and/or web support and then look for a service level agreement (SLA) on response times for fixing bugs and addressing product defects. Understand what self-help tools are available (i.e., online help, knowledge bases, user community, etc) and work to gauge their level of helpfulness (some are not actively managed and are more to simply say a YES on RFP responses).

Most vendors provide product support but not configuration support. You need to understand whether the support is a skill you want to build and maintain in-house or if you prefer to use outside assistance. If you want outside help, some of the software vendors provide this as an optional service as do specialized 3rd party SPM/ICM service providers, including Spectrum Technologies.

Last but not the least don’t limit your reference checks to customers provided by the vendor. Use your network to find out more customer references independently to gather as much information as possible to guide your decision.

Good luck with your upcoming vendor evaluation!  To discuss this further feel free to email us at or call us at (408)-813-1443.

5 Reasons Why SPM Projects Fail


Sales Performance Management (SPM) projects are complex and most don’t complete on time or within budget.  As a specialized SPM services firm, Spectrum has worked on numerous SPM implementations with a variety of technologies.  The following our five of the top reasons why SPM implementations run into issues and our take on what can be done to mitigate those risks.

# 1 – Lack of Executive Sponsorship

SPM projects involve participation from multiple business functions like Sales, Finance, HR, Legal et al.  There is always a possibility of participants losing momentum on project tasks, as they also need to focus on other regular job.  The presence of a senior leader as an Executive Sponsor of the SPM project, who everyone looks up to for directions and guidance, helps in keeping the focus of the team on the project priorities.

Decision making in a multi-dimensional team comprised of mid-level managers is a challenge.  The project runs into time pressure frequently.  The executive sponsor understands the success factors and constraints too well.  With the authority to take quick decisions, he helps aligning the team to his directives and ensures that timelines are met.

# 2 – Poor Project Governance Model

Since multiple functional departments have participants in the project, involving all the stakeholders throughout the life cycle of the project is an absolute necessity.  A consistent, proactive and methodical communication platform ensures that the all the stakeholders are well informed of all the elements of the system that are being impacted during the project.  It is important to form the steering committee very early in the project that lays down a simple and transparent project governance model, identified the dependencies and risks in the project, establish a versatile project plan involving all stakeholder participation and a sound  communication platform that keeps the directives clear.

# 3 – External Dependencies

SPM projects impact multiple functions such as Sales, Finance, Legal, HR, IT etc, and at the same time get impacted by multiple functions.  This puts SPM projects at high risk, especially the projects with long project timelines.

Several external factors like – a new executive, launch of a new product line, an M&A announcement, economic downturn or legal lawsuits, can very quickly bring in significant changes to business processes, incentive plans and resource availability.  The new VP of Sales walks in with new visionary ideas that put the in-flight project back to design phase!  An enhancement applied to ERP system breaks the data interface and so on.

It is important to realize that SPM projects are not happening in silo.  There are lots of dependencies!  While it is impossible to predict the unforeseen, one has to put in a conscious effort to look beyond the horizon and anticipate the factors that may impact the project.  If there are too many changes expected in the near term, you should consider pushing out the project kick off.

# 4 – Poor Resource Planning

Operational and project responsibilities are different, and it makes sense to keep them separate.

Can the driver of the car also be made responsible for engine tune up?  Yeah, maybe, but generally you wouldn’t expect one person to take on the dual role.  However, in SPM projects, we often see the commission operations team carrying on the added responsibilities for supporting the new project, especially testing.  This leads to severe operational conflict with project tasks.

Like any other complex projects, different specialists are needed to be assigned to specific roles.  Bigger the project, greater will be the resource needs.  If it is so deemed that operational team has to be the one doing testing as well, then one has to plan for the month/quarter ends, when operational team would have no bandwidth for the project.  Don’t assume 100% availability.

Planning of vendor resources is also important.  I have seen projects where multiple vendor resources are on-boarded on the project kick off, even though the ground work of the project is not yet completed!  It’s like getting construction workers on the ground when the floor plan is not even approved.  This burns a lot of money over idle vendor resources causing budget crunch for later phases of the project.

# 5 – Testing Approach

Most popular testing approaches are – Parallel Run and Test Case based testing.  Most often there is not much thought given to which approach is best suited for the project.

Parallel Run approach requires running the legacy (or current) system in parallel with the new (or enhanced) system, and comparing the results for a quarter or two.  This approach does not work, if there are significant changes in the plan design and expected results.  I have seen testing resources working arduously to identify and explain the gaps between the two systems.  If the new plan design is very different, or the old system has lots of known issues, then why waste time in doing reconciliation!  In such a situation, test case based approach is more suitable. However, building numerous test cases, test data, and expected results, is a time and effort intensive approach.

One needs to evaluate the two options, and take a conscious decision on which testing approach is most suited. Very often a hybrid approach works much better.  Compare the results with the old system where there are no changes, and build exhaustive test cases for some selected modules.

About this Blog’s Author
Maneesh Gupta is the founder and Managing Partner at Spectrum Technologies.  Spectrum is a Silicon Valley firm providing specialized services in the area of Sales Performance Management Systems since 2006.  Maneesh can be reached at

5 Tips to Manage Annual Changes to Your Sale Incentive Plan

By: Dan Ganse, Spectrum Technologies

It’s that time of the year again, the leaves are changing, pumpkin lattes are back, and you’re starting to hear about changes to next year’s sales incentive plan.

You could sit back and wait and for these changes to find you, hope that they’re small and will be easy to make…but if you’re wrong, you’re setting yourself up for long days and a late program rollout.  It would be wiser to seek out these changes now and carefully analyze their impact on the current IC system.

Here are 5 tips that will help plan for next year:

1.  Start Early

An IC steering committee – typically formed with HR, sales, sales operations, finance, and other stakeholders – often decides on the annual plan changes.  And it’s not uncommon for major changes (e.g., new data sources driving new metrics) to take 2-3 months to implement.  It’s also not uncommon for this group to finalize these changes in mid/late December.  Failing to anticipate these changes will only put pressure on your timelines and the quality of your initial payroll and other deliverables.  And making mistakes – for any reason – will take you 3-6 months to regain credibility.

2.  Run It Like A Project

The key to managing annual plan changes is to make the stakeholders recognize what the key deliverables are to a new plan year rollout.  Push the steering committee to provide final compensation plans as early as possible.

Communicate timelines to all stakeholders early and publish and track dates to reinforce dependencies and accountability.  Establish a weekly meeting with all key stakeholders to share timelines, assess project risks, and resource plan for all roles (HR, support, IT, etc.).  If you’re planning to engage a vendor to help with your changes, secure the resources early on.  Don’t wait for the final plans to be ready as you’ll need to account for enough time for the vendor to plan their own staff and ramp up on your requirements.

3.  Model the New Plan

Modelling the new plan is crucial to ensure that the plan behaves as expected.  Monte Carlo simulation (running repeated simulations with random sets of data) can be particularly helpful to gauge the financial sensitivity of the plan.  You’ll want to understand how the plan behaves under a variety of conditions in order to (1) adjust the plan if the behavior isn’t desired before you launch and (2) serve as a baseline and reminder later in the year when discussions arise to change the plan.

4.  Archive Old Components

Too often, little or no time is spent archiving or removing unused components (rules, data, reports, etc.)  The reasons for not doing this are many – you assume this is a feature of your IC system, you don’t have enough time to do this and make the required changes, or it simply didn’t occur to you to do – but the consequences of not “pruning” these unused components is a more complicated system that is harder to understand and make changes to.

Be sure to allow for time to archive and remove unused components from your system to keep as clean as possible.  Doing so extends the overall life of your IC system, keeps the processing speeds faster, and allows for faster configuration changes.

5.  Communicate to the Salesforce

Your company is spending a lot of money on sales incentives.  Don’t assume that  just because you implement the changes requested that the salesforce knows what those changes are.  And just because you updated the Terms and Conditions of the plan for the new year, that also doesn’t meant the salesforce understands the plan or changes made to it.

Each and every year, it is essential to remind and educate the salesforce on their sales incentive plan.  This can be accomplished through a variety of ways such as testing and certification, road shows promoting the plan, sessions at a national sales meeting, webinars, on-demand videos, and more.  The key is that a concerted effort is made to remind, educate, and drive home the sales plan’s key metrics and overall corporate strategy of your organization.  Doing so, drives the performance of your sales organization and strong ROI in your sales incentive plan.

This is always a busy time of year, where you can be pulled in multiple directions.  Don’t let next year’s sales compensation needs sit idly by – take the time to prepare for what is to come.  Make it a good 2015!

Sales Compensation Management Is Tough: 3 Keys to Doing It Well

3-KeysBy: Dan Ganse, Spectrum Technologies

Sales incentive compensation management (ICM) is a tough ballgame and has unique challenges.  ICM operates at the intersection of corporate strategy, behavioral psychology, and multiple corporate IT systems.

Managing sales compensation is a continuous process that does not end when a new ICM system is brought online.  Good ICM software clearly helps, but there are three critical factors required to effectively manage the sales compensation process.

  1. Expect change
  2. Seek continuous improvement
  3. Staff appropriately

Expect Change
Businesses are always changing and many of those changes have a direct impact on your sales compensation plans.

Events like acquisitions and layoffs impact the sales team size, causing account alignments to change which impact sales quotas; new products are launched and/or abandoned, impacting sales quotas; field sales personnel move in and out of selling roles throughout the year often which has an impact on how those people are goaled, their contest eligibility, sales coverage of their departing territory, and more.  The list is endless – but all require the sales IC system to adapt quickly.

It’s critical for those supporting these IC systems to build flexibility into their system and processes to accommodate change.  Whatever can be parameterized, should be.  Components like quotas, target incentives, commission rates, are easily accommodated by most designs.  Policies should be established for common conditions and adhered to.

Larger changes are difficult to anticipate, but should be approached in a structured manner with standard change control procedures.  Care should be taken to remove old code / rules / parameters to make future changes easier to make and maintain.  When this care is not taken, you are shortening the life of your ICM system.

Seek Continuous Improvement
At the end of every processing cycle, review your processing procedures and be sure to note areas for improvement.  Focus on both improving your team’s productivity as well as the field sales org and executive management user experience with better analyses and analytics.   Take time to update procedural documents, look to automate frequent manual tasks, and maintain a “punch list” of necessary system changes and enhancements.

Staff Appropriately
Companies all too often fail to appreciate what it takes to manage an IC system well – trusting too much in the tool’s much advertised flexibility.  Companies that do this well, acknowledge that this is a specialized skill set and requires people who are adept at managing multiple constituencies and who are able to translate requirements to produce deliverables.

It’s important to have skilled people supporting your IC system, but also to have enough of them.  You should have enough staff to produce ‘higher value’ analyses that deliver true insight into how well your sales plan is performing and identify areas to drive your overall corporate performance versus simply managing to produce a payroll file.  Be sure to anticipate and address peak staffing needs as well by cross-training beyond your core support team (for example, you can have the person who is responsible for quota maintenance also learn your ICM system).

For a longer term impact, there is an increasing amount of companies who are engaging SPM/ICM professional service firms to help them year round.  These firms know the domain, the toolsets, and often provide their own cross training to mitigate your people development and maintenance costs.  The more you use a firm, the better they will understand your business and systems, which increases their productivity and contribution.

In summary, managing and improving sales compensation takes considerable focus.  Having an approach that concentrates on improving the effectiveness of your sales support operation is critical to its success.

5 Lessons SPM Professionals Can Learn from the Success of the Ice Bucket Challenge

ALS IBCThe ALS Ice Bucket Challenge has taken over social media and its success has far exceeded all expectations. The objective is clear and simple, and the challenge doesn’t require much effort from participants: donate online and/or pour a bucket of ice water on yourself.

Sales Performance Management professionals can learn a few lessons about human behavior from the success of the Ice Bucket Challenge. We listed five of them below:

1. Challenge to Motivate
When people are challenged (especially, if done publicly), they get motivated to succeed. The ice bucket challenge did this very successfully utilizing social media.

From an SPM standpoint, the challenge is for the sales team to make its sales goal. Sales goals or quotas need to provide motivation for the sales team to push hard towards those numbers. Beware of goals that are too aggressive – you’re just as likely demotivating the very team you need to achieve your goals.

Frequent communication around your sales goals – and overall sales incentive compensation – is critical to maintain mindshare and motivation with the sales team. Multiple channels, from monthly statements, to leader boards, and communications from sales executives are necessary to keep the sales team on target.

2. Build a Sense of Urgency
We procrastinate! By giving a deadline of 24 hours, the ice bucket challenge made it difficult for people to put it off and forget.

Building and maintaining a sense of urgency within the sales plan is certainly more challenging, but consider establishing shorter term goals (semi-annual or quarterly from annual) to keep the sales team always ‘sprinting’. If this is difficult, other ways to maintain urgency are contests, leader boards, and other public recognition of top sales reps throughout the year.

3. Align to Good Karma
Human beings have an innate desire to do good things. Most of us would go extra mile, if it helps a charitable cause.

Attributing a tiny part of corporate’s resources to social charitable activities, would not only provide a team-building exercise, but also build personal pride for the company they work.

4. Create Social Visibility and Peer Pressure
Peer pressure can get us to do things that we left on our own, would not have done. There is an element of social disgrace for those who choose not to participate.

From an SPM standpoint, set highly visible goals and challenge your sales team to accomplish them. Don’t let the goals be buried in a once-a-year produced ‘goal sheet’ – or only listed on a monthly commission statement. Make the leaders public and let lesser performers know how they stack up against those leaders.

5. Money isn’t Everything
Hardly anyone would have poured cold water on their head, if all they were getting in return was some money. People did it for reasons other than money, and in fact, most actually did it, and also gave money. What a deal!

Money alone may not be the only motivational tool for your sales team. Consider other motivational tools that can complement your cash rewards, like yearend recognition trips, merchandise, extra PTO days, and more.


Plan Changes and Locked Calculations within IBM Cognos ICM

Managing a sales compensation program is not a “set it and forget it” process.  It takes constant attention as people move in and out of new roles, sales strategies change and evolve, new products are launched and discontinued, and more.  Key to it all, is a controlled change management process – one that allows a system to adapt in a structured and responsible way.

Plan changes occur to accommodate changing business conditions and impact the rules and mechanics of a sales compensation plan, such as goals, accelerator rates, payout percentage, etc.

When a compensation plan is built in an ICM tool, the data associated with the plan is stored in tables and business rules are applied to provide results based on the parameters of the plan. When plan changes are requested, these changes often require updates to table data , business rules, and reports.

Cognos ICM Calendar Locking

One specific ICM tool, IBM Cognos ICM, contains a core business function which is the Calendar Locking function. This function involves locking the calendar of the model in order to prevent changes to the data. This functionality is vital in keeping the integrity of historical data intact and preventing important aspects of the system, such as reporting and compensation information from being affected. A portion of the locking task is to lock the calculations within the selected model.

While this process is necessary and provides benefit to the business, the locking functionality prohibits users from changing the structure (formula, number of columns, etc.) of calculations. One way to accommodate structural changes within the existing plan is to apply the changes to only where the specific calculations need to be modified. The following is a list of the step-by-step procedures to accomplish this:

1.  Create an alternate version of the calculation.

Although a locked calculation cannot be changed in certain ways, it can be copied.

When copying a calculation, the system requires adding a suffix as a means to change the name, as no two calculations can have the same name. Once the copying process is complete, create a name that will allow other users or developers to easily identify with what’s happening in the model (i.e., Old Calculation = ‘Get Eligibility’; New Calculation =‘Get Eligibility 2014’)

2.  Create an end date for the old (locked) calculation and a start date for the new (copied) calculation.

Locked calculations can be changed in certain ways, such as changing the start and end dates of the calculation. In this case, after you have created a copy of an old calculation, modify the end date in the old calculation that will end the results at a certain point (particularly through the end of the locking period). Then modify the start date in the new calculation that will start calculating results at a certain point (particularly the start of the unlocked period).


Old Calculation

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New Calculation

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3.  Merge the calculations.

In the case that only a date has been set in the old and new calculations, the best option is to merge these two calculations together. Usually this can be achieved by adding the rows of the new calculation to the rows of the old calculation, while it is being used by another calculation that depends on its results. Otherwise, it would be ideal to create a brand new calculation (on an unlocked calendar so that results will be calculated for the unlocked periods) and merge the two calculations there.

4.  Create a new Data Grid to display the new calculation data.

In addition to date changes, a locked calculation can also have columns added to it, if necessary.

In the case that this occurs, the new calculation will have to be utilized in the report in a different Data Grid so that the original Data Grid is not affected. Because the business will likely still be viewing the older report, the original Data Grid cannot be changed or removed. In this case, we will need to create a new Data Grid to display results from the new calculation.

  • Create a copy of the Data Source and modify it to use the new calculation.
  • Copy the old Data Grid and modify it to use the new Data Source.
  • Rename the new Data Grid using a similar convention as renaming a new calculation.


In conclusion, both plan changes and preserving historical data are essential to a business regarding compensation practices and IBM Cognos ICM provides a means to accomplish these tasks. Though the locking process has the ability to impede the progression of performing plan change duties, there is a way to circumvent it. Creating alternative versions of the calculations, Data Sources and Data Grids can provide continuity of the Compensation process without hindering the business’s everyday objectives.

If you’d like to contact the authors of this post, Spectrum’s Firoz Razak and Larry Jackson can be reached on LinkedIn.

Improving Business Strategies with Management Dashboards

By Larry Jackson, Spectrum Technologies

In my experiences, I’ve rarely come across managerial staff with a crisp picture of what reports and management dashboard should contain.  A management dashboard is simply a canvas you can paint with key information to help businesses break away from simple operational commission summaries and line item information.  With a good dashboard, businesses can have a powerful tool at their fingertips.

Here are some potential elements for creating an effective management dashboard.

# 1 Top and Bottom Performers

A traditional ranking report usually consists of employee names, rank number, and the performance measure (i.e., Goal Attainment). It’s typically multiple pages or screens long and merely a “data dump”.  To improve and make this a relevant part of a dashboard that provides managers with useful information with which they can use, focus on the top AND bottom performers to show the ‘best of the best’ and the ‘worst of the worst.’ In addition to goal attainment percentages, add sales figures and other performance metrics to give management an opportunity to identify areas of improvement, or to even motivate employees with various incentive prospects. The possibilities are endless.

Example – Top and Bottom Performers

Click to enlarge


# 2 Geographic Performance

Assessing geographic performance view will allow businesses to extend their strategies beyond improving the performance of employees. Managers can employ strategies to improve performance in specific areas/regions. The information provided in this report can shed light on the trouble areas of operation.



# 3 Performance by Product Lines

Corporate-level reporting shows management where areas of improvement can be met with effective sales and marketing strategies. At this level, sales and marketing tactics can be created and applied at the top level and deployed business-wide. This approach could be efficient provided it addresses areas of improvement universally. If this approach is only somewhat effective, the combination of Dashboard elements will ultimately prove to be effective in deploying strategies that work to improve business. Case in point, the efficacy of implementing a Corporate Sales report can be astounding.


Analyses of aggregate regional performance and performance by product line can greatly increase strategic effectiveness by providing detailed sales figures, or other information, at a higher level for each location. Combine this with totals for each component and full totals are provided on a company level. This will be effective in giving insight on how the company is performing in each of the key categories. An effective instrument exists to give management an edge in strategy.



# 4 Product Line Sales Performance by Region by Quarter

It is important for leaders to add time dimension to their dashboard, to be able to spot the trends that may be buried in the reams of data. Noticing the declining annual sales of a particular product line in a particular region can be fixed by top management, only if noticed.

 Region Attainment by Quarter


From an SPM perspective, management dashboards can be very helpful in quota and territory setup. A dashboard that stacks aggregated rep attainment for various territories against time dimension would help in setting up Quotas and Territories.

When building a management dashboard, it is always good practice to provide users with the ability to download data to an Excel Spreadsheet, or print the report using a pdf format. In addition, customization that allows users to drill-down (i.e., select a date, then select a region) gives more flexibility to the management dashboard, providing a better user experience.


In conclusion, a good management dashboard creates a world of opportunities for managers. The information presented with a dashboard can provide clarity to not just sales managers, but to departments company-wide.  Good dashboards help answer key business question and drive organizations forward.   With a good management dashboard, the possibilities are endless!!

About the author

Larry Jackson is an SPM Analyst with Spectrum Technologies LLC. He has 6+ years of enterprise system experience with last 3+ years in the field of SPM. He has worked with several large companies in banking and telecom industry on their SPM implementation projects.

A Must Read Book on ICM

If you are reading this blog, you must be someone entangled in this complex world of Incentive Compensation and Sales Performance. Like everyone else in this industry (including myself), you may still be searching for ways to enhance your understanding on this subject but business schools don’t offer courses on Incentive Compensation, nor do we have any industry journals on this topic. Therefore, I am thrilled to see someone publishing a book on ICM. I am particularly excited because the author – David Kelly – is a good friend and an industry stalwart with reputation for being brutally candid about his opinions.

The Book on Incentive Compensation Management

David’s newly published 200 page book is simply titled – The Book on Incentive Compensation Management.I received a pre-release version of the book, but I confess its text book style cover was a bit intimidating. I finally finished the book this weekend, and I am glad I did!

This book is not yet another prescription on Compensation Plan Design, nor a bunch of Project Management tips from a Big 5 consultant, nor a collection of author’s favorite project stories. It offers a world much like the diary of a wise consultant providing candid commentary on the quandaries of ICM world.

The book has taken a holistic approach towards ICM. Rather than focusing on any one stakeholder, or specific business process, or a particular industry, the book delivers on its title by addressing all stakeholders across all project phases. It starts by defining the term ‘ICM’, and then dives straight into the complexities of the ICM landscape. The second half of the book provides a candid narrative on project phases, common challenges, pitfalls and sage advice. The book not only talks to the implementation consultants, but also makes business leaders aware of what an ICM project entails.

My favorite part of the book is where David answers the question often asked by industry outsiders and newbies – Why is ICM so hard? Chapter 2 provides a roof top view of the answer, while Chapter 7 gets into the trenches. I wish I had this book during my early days at Apple, when neither business nor IT leadership had a clue and there was no one available to guide us. If you are dealing with a manager or a client who undermines your ICM challenges, do yourself a favor and gift a copy of this book to them. You may also want to take a bright red pen and underline the parts that are relevant to your situation (just saying…!).

Chapter 5 of the book is specifically targeted towards the companies that are somewhat new to rolling out enterprise level ICM projects. Whether you are on the business side of the project or IT, if you have been thrown into a new ICM initiative, you would benefit from the words of wisdom spread throughout this chapter.

In spite of his long association with providers of the ICM tools, David has been honest to his audience, and doesn’t waste any ink writing about specific tools. The book follows the theme that irrespective of the choice of ICM tool, one has to make sense of business requirements, operations, and processes ahead of kicking off an ICM project. The book focuses on educating and preparing both sides – the company’s compensation administrators and the implementation team’s consultants.

The author’s witty and often sarcastic tone directed to his peers and business teams keeps the reader engaged.   The writing style, as explained early in the book, is characteristically informal and chatty. But don’t be fooled by it, as you would find the book loaded with wealth of information and industry insights, reflective of David’s years of experiences in the trenches of ICM.

While not a bible on Compensation Plan Design (there are plenty of those already available), this book does provide some high level guidance. If you are from a small size company undertaking a simple ICM project, you may find this book over the top. But if you are in the middle of a large ICM project, you would be nodding all along as David talks about challenges, hurdles and craziness of ICM projects. Your challenges, after all, are not so unique.

Whether you are an expert practitioner of incentive compensation, or you are facing your first ICM implementation project, this book can save you months of misunderstandings and wrong paths in a system implementation project.

I’ve been consummately engrossed in this book for the last two weeks. It is loaded with heavy textual content with sparsely sprinkled graphics. This made it a bit of a daunting read for me, but David’s friendly tone and jest helped me pull through to the finish line. ICM is a complex topic, and the book provides a holistic and impartial commentary, while offering helpful guiderails for all of us in ICM industry.

A must read book for anyone who is passionate about the world of ICM.

To learn more, or to purchase the book please visit:

About this Blog’s Author
Maneesh Gupta is the Managing Partner at Spectrum Technologies. Spectrum is a Silicon Valley firm providing niche services in the area of Sales Performance Management Systems since 2007.

Maneesh can be reached at
To learn more about Spectrum please visit –