Experts in Automating Incentive Compensation

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Compensation System Cost Analysis:
Determining the Return on Your Investment in ViComp


When you design and maintain your incentive compensation system from scratch and use it to determine when and how much to expend on incentive payments, you incur more than the easily understood "hard dollar" costs for systems and equipment (e.g., PCs). There are also "soft dollar" costs that are less obvious, such as those that arise from miscalculated payments.

Eliminating such hidden costs will enable you to reallocate your resources to more strategic endeavors, such as streamlining processes, improving accuracy, and increasing productivity. Ultimately, this saves money.

We offer an automated solution to incentive compensation. Although our system requires an up-front investment, it pays for itself over time. To help visualize your potential return on investment, select each of the following topics:
Hard Costs: Compensation Staff

Hard Costs: Information Systems (IS) Staff

Soft Costs

Assessing Your Current Risks

Security
Chances are, once you've analyzed the true costs and risks associated with your current method of calculating and paying compensation, you'll recognize that the initial investment you'll make in our software will soon pay off in terms of more innovative and effective compensation plans, more timely and accurate payments, and better control of compensation.

For more information, see WHAT we'll do for you and HOW we'll do it.
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Hard Costs: Compensation Staff
What is the cost of your current compensation system in terms of compensation staff? How many labor hours does your staff expend on:
  • modeling compensation?
  • designing spreadsheets?
  • modifying spreadsheets or implementing manual workarounds when compensation needs change?
  • communicating with and training users?
  • trouble-shooting issues directly related to the maintenance of compensation spreadsheets?
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Hard Costs: Information Systems (IS) Staff
What is the cost of your current compensation system in terms of information-systems (IS) staff? How many labor hours does your staff expend on:
  • meetings to explore ways to improve the system?
  • urgent correction of malfunctions in the system?
  • implementation of improvements in the system?
  • maintaining the present state of the system?
 
Soft Costs
What is the hidden toll on creativity, efficiency, and productivity?  Is your compensation design limited by system constraints or by your spreadsheet expertise?
  • Does your present methodology inhibit creative thought and compensation design ideas simply because they may be too cumbersome or sophisticated to implement?
  • Where does control of compensation programs and payments reside?  Are adequate controls in place?
  • Do you spend enough time on the design of compensation plans relative to the creation of spreadsheets or other systems?
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Assessing Your Current Risks
Ask yourself these questions:
  • Are your payments accurate?  Do your reps and managers have faith in the compensation methodology, or do they feel compelled to spend time double-checking the basis of payments?
  • Do you sometimes find errors in spreadsheet logic or design?  If so, what are the associated costs?  What is your procedure when bugs are found?
  • Does your organization maintain an adequate audit trail?   Where do the checks and balances reside?  Do you have independent verification mechanisms?
 
Security
Consider your security posture:
  • Is your compensation database secure?  How do you maintain security?  Are your data and formulas password-protected?
  • Do you current create and maintain different disks by user type for security reasons?  How much time does this take?  Can spreadsheet users change compensation disks?  Can disks be lost or erased?
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