Best of Breed:Incentive Compensation Systems
"When presented with a build-versus buy decision, an organization needs to be proactive in first identifying its business problems, and then identifying the optimum solution to those problems…. The TrueComp solution efficiently addresses all of the varied challenges of incentive compensation management…"
When an organization is deciding whether to build a custom in-house EIM system, or buy a packaged solution, product features aren't the only things that should factor into the decision. There are five key aspects to consider when deciding to build vs. buy:
- Completeness of Functionality
- Scalability and Performance
- Length of Deployment
- Customer Support
- Total Cost of Ownership
The management and deployment of incentive compensation programs is complex. The maintenance of sales incentive strategies requires deep knowledge of the adaptability of the system's source code, since even small changes can render the entire system useless. This is why companies often seek off-the-shelf software packages, with robust features, such as TrueComp from Callidus Software. For instance, packaged solutions should allow for changes to business rules; should accept data feeds from multiple sources within the organization; must be easily extensible, with only minimal required maintenance; and must allow for the creation and delivery of several types of reports.
The scalability and performance of most homegrown systems is usually insufficient for a company's current size. As companies evolve, these systems either become obsolete, or don't have the power to handle business growth.
Timely deployment of an automated EIM system is of critical importance, since incentive compensation management has a direct impact on a company's revenue stream. TrueComp deployment times are considerably shorter than most in-house implementations.
While both in-house and packaged solutions require support and maintenance, packaged solutions offer more flexibility in this regard. The upkeep of an in-house system can require additional IT resources that simply aren't available in-house. In addition, these systems generally offer minimal training and documentation. Callidus Software offers several support plans that provide on-demand services.
When determining total cost of ownership, there are common hidden "build" costs, including implementation expenses, ongoing maintenance, and the dedication of internal resources to the system. The operating cost of the "buy" option becomes noticeably smaller when these hidden costs are taken into account.
