Author: Connor Barry
As an organization utilizing SAP Commissions, one of the natural activities that happen is updating compensation plans for year over year updates. There may be many reasons why plan changes are being implemented in the new year, but just about every organization experiences changes to compensation plans about once a year. In this article, we will outline some key elements to managing those compensation plan changes in your SAP Commissions system.
Finalize Design of Plan Updates Based on Organizational Goals
The clear first step in managing plan changes in commissions is to ensure that the design of plan updates have been completed prior to implementing the changes. We want to ensure that we have a robust set of requirements and will be able to fully configure and test the updates in the environment.
The plan design team should evaluate how the plan is performing today and what you would like to achieve going forward. What will motivate your salesforce to win? What will retain your best performers? Are there any pay equity concerns you are trying to address? What’s working today with your compensation plan and what isn’t?
One key piece of functionality in the SAP Commissions system you can use to evaluate some plan changes is the Modeling functionality. You can use the modeling tool to evaluate some of these changes and how much your compensation spend will change with these plan updates. If your changes are fairly simple, you can also promote changes directly to your plans in production from this tool.
Determine Availability of Data
Once you have confirmed the expected components or rates that you plan on changing in the system. If you have any plan changes that are using new data sources or new transaction fields for conditioning eligibility rules, you will want to make sure that that data is accessible in the right component logic in commissions. If you are using the same transactional data it may be as easy as updating a rule or formula to now use a new transaction field; however if your new plan components require a completely new transactional data set or reference data set, you will want to plan for a longer timeline to complete the integration changes.
Outline Compensation Rule Updates
Once we know that you will have the data to support your plan changes, the next step is to update your compensation plan rules. It’s critical that we utilize versioning to manage these changes. All objects in SAP Commissions can and should be effective dated when you are making changes. This allows you to maintain your historical calculation rules in case you need to recalculate a prior period.
There may be some easily identifiable rules to either create or update based on your plan changes, however, there may be some other changes that you need to make to update that aren’t as easy to identify. For example, you will want to ensure any rules around LOA, new hires, terminations, and any other scenarios are covered through the plan changes. There may be formula updates or other rules that need to be updated in order to ensure these scenarios are appropriately calculated.
Evaluate Reporting Impacts and Design
One of the primary functions of the SAP Commissions system is to report on incentive earnings. Therefore, it’s important to evaluate what your plan changes will do to your current reporting design. There will likely be updates to a number of reports with plan changes that will vary based on how large your changes are and how many plans are impacted by the changes. We will want to look at the following areas:
- Statements: How will your incentive statements need to be updated? Are there new components that need to be incorporated, old components that need to be removed? Do you want to make simple changes or completely redesign your compensation statement? These questions will be important to ask as you think about the timeline you have to implement your changes.
- Dashboards: Similar to statements, your dashboards will likely need to be updated as a part of your plan changes. Dashboards are limited to 8 widgets, so you will also want to understand if you will need to build out a new dashboard, or if the current dashboard will be effective for your plan changes. Generally, if your changes are not significant you can likely change the existing dashboard fairly quickly. If you have more comprehensive changes to the plan, you may need to incorporate a full redesign into your dashboard design.
- Analytics: After you’ve determined how you will report on your plan changes to the sales force, you will also want to think about other analytics reports you may be using for finance, administrative review, or other planning purposes. We will want to make these updates to reflect the new changes, while also maintaining the historical reports.
Configuration, Testing, and Deployment
After you have gone through sufficient planning it’s time to get to work in the system. The Canidium team can help the administrative team to outline and configure the updates to your data integration, reporting, and workflow elements in the system. We can also support your administrative team if you prefer to be more self-sufficient in completing the changes independently.
A configuration review should take place to ensure all updates have been made and that we are ready to test these plan changes. Testing should involve both administrative and configuration teams to review expected results against the results in the commissions system. With plan changes, you will likely need to manually calculate your results to compare against. In addition to checking the final commission amount, you will also want to review all updates made in data integration, reporting, and workflow if applicable.
Testing is critical in any system, but it’s also critical for any changes that you are pushing out to the team. Sales teams are typically a little wary of plan changes and if they are seeing defects in your production environment this can erode trust. Testing is critical to prevent any of these issues and ensure that the right behavior is being driven from the plan updates and that the commission system is adopted and trusted by your sales team.
After testing, it’s time to deploy into production with all of your changes. Testing will ensure that you have confidence in what has been built, but it’s important to run some additional tests after any migration to ensure that all objects have been migrated and that there are no missing elements in the system.
Once everything has been confirmed and updated in the system, the final element should be communicated to your sales force about the changes. With Commissions, you can create and route plan documents for review and approval. This is critical for compliance as well as informing your team about the changes. The Commissions system also allows for you to track the distribution of the plan documents and acceptance by your sales force. This creates visibility and traceability to who has reviewed and accepted the plans.
Plan changes are natural for any sales organization. Having a solution like SAP Commissions can allow for these changes to be made in an effective way that ensures accuracy in your calculations, ensures adoption of the changes and allows for analytics on the effectiveness of your plans. Many elements need to be accounted for when building out plan changes, but the Canidium team can support your team through these changes and ensure they are completed in the system using industry best practices.