When Outsourcing Works
An ICM Managed Services case study of the Wacker Neuson Group
This case study documents the journey of the North American operation of German-based manufacturing company Wacker Neuson as they sought a better solution for managing their incentive compensation.
Industry: Manufacturing
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The Challenge:
An ICM process hanging on a single thread
Wacker Neuson first worked with OpenSymmetry in 2013 on the implementation of their original incentive compensation management (ICM) system – Varicent, now IBM ICM – to replace a web of spreadsheets and manual sales commission calculations. This ICM system, however, hung on a single thread – a sales compensation administrator who possessed all of the knowledge about the system and processes. She had structured the payouts and reports in a way that she understood but was not easy for others to pick up, due to a lack of ICM system process documentation.
Ultimately, Wacker Neuson recognized that they were carrying too much risk with the existing program and conducted an internal assessment, with the end goal being to improve their ICM solution.
Wacker Neuson turned to OpenSymmetry for help evaluating six key areas of their existing ICM solution:
1. Process efficiencies
2. System efficiencies
3. Data integrity best practices
4. Reporting and communication best practices
5. Program management best practices
6. Cost efficiencies
The Solution:
Outsourcing management of all ICM
In the fall of 2015, Wacker Neuson invited OpenSymmetry to lead an onsite workshop for a full review of their ICM system in order to start addressing the challenges and opportunities for improvement uncovered during the evaluation.
The workshop deliverables included:
• Detailed documentation of “as is” process
• Process improvement recommendations
• System mapping
• System configuration update recommendations
• Reporting enhancements
After considering their options, Wacker Neuson made the decision to outsource the operation of their ICM program through OpenSymmetry’s managed services offering, OS Edge. An OS Edge team was trained on Wacker Neuson’s system, checking it for redundancy and ensuring that it utilized the most efficient resources and processes to reduce costs. The OS Edge team developed Standard Operating Procedures and took over management of the following aspects of the Wacker Neuson ICM process:
• Regular status reporting
• Transactional processing
• Accrual processing
• HR update processing
• Commission processing
• Reporting and communication management
• Customer and product updates/maintenance
• Year-end processing and set-up
• Incident management
• Continuous improvement identification and execution
• Quarterly business reviews
The Result:
Freedom to focus on impactful business drivers
By inviting OpenSymmetry to assess, improve, and own their ICM program, Wacker Neuson saw improvements in each of the six key areas initially evaluated:
1. Process Efficiencies: By applying best practices such as automating HR updates in the ICM system, OS eliminated unnecessary manual processes. Additionally, by configuring the native ICM password functionality, OS streamlined a once inefficient process of managing ICM passwords outside of the system.
2. System Efficiencies: By identifying key areas to streamline the technical configuration, OS made recommendations to reduce IT dependencies and quickly and easily make small plan changes.
3. Data Integrity: By aligning data fields and making recommendations to update SAP queries, OS increased the accuracy of customer and transaction data that was loaded. OS also made recommendations to automate data imports for a streamlined process.
4. Reporting and Communication: The OS team gave recommendations to improve real-time reporting, giving Wacker Neuson the ability to make better informed and more timely decisions. They also identified an opportunity to streamline communication for faster and easier commissions processing and approvals.
5. Program Management: By identifying additional resources and setting up a comprehensive documentation process, OS reduced the risk that once came from having just one compensation administrator hold all the keys to the ICM system.
6. Cost Efficiencies: By outlining best practices for managing exceptions, OS made the ICM program more efficient and decreased program management costs that once came from having a compensation administrator who spent countless hours configuring unwieldy rules to catch each and every uncommon exception.
Partnering with OpenSymmetry’s OS Edge team to operate their ICM program empowered Wacker Neuson to focus on their core business. They can focus on high priority organizational initiatives while having complete confidence that they have a best-in-class and cost-effective ICM solution.
If you’re interested to learn more about how OS Edge can help you take control of and get the most from your ICM solution, please email us at os_info@www.opensymmetry.com
Want a summarized version of this case study? Click Here.
ABOUT WACKER NEUSON
Headquartered in Munich, Germany, Wacker Neuson designs and manufactures a comprehensive range of light and compact equipment and serves the global construction, agriculture, landscaping, oil and gas, and municipal industries. The company has corporate sales and service organizations in more than 35 countries, as well as nine plants around the world and an extensive dealer network. Behind the brand stands the Wacker Neuson Group, a corporation with around 5,500 employees and revenue of EUR 1.53 billion in 2017. OpenSymmetry partners with Wacker Neuson’s sales affiliates in the USA and Canada.
ABOUT OS Edge
Managing incentive compensation is a continuous process that doesn’t end once an incentive compensation management (ICM) technology is deployed. OS Edge, OpenSymmetry’s managed services offering, was born out of our clients needing operational support beyond deployment.
The consulting team at OpenSymmetry delivers a full suite of ICM managed services. This empowers businesses to focus their efforts on what’s most important — their core business.
“OpenSymmetry helped us to evaluate our ICM program in a new light. Their technical and business expertise allowed us to understand the details of how changes would impact our system and processes. This enabled us to implement changes that would have the biggest impact on our business.”
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About Us
OpenSymmetry enables clients to achieve greater operational efficiency and get better sales results. We are a global consulting company specializing in the planning, implementation, and optimization of industry leading technology suppliers of sales performance management solutions.
CONSIDERATIONS WHEN REPLACING YOUR SPM TECHNOLOGY SOLUTION
Understanding the challenges companies face when migrating Sales Performance Management (SPM) technology solutions can be a significant undertaking. This paper is designed to provide high-level guidance to stakeholders who carry this responsibility. As OpenSymmetry has helped many companies evaluate and effectively migrate to new technology solutions, we are sharing seven key areas that we find critical to completing this kind of effort.
1. CURRENT STATE ASSESSMENT & FUTURE STATE PLANNING
A critical initial step before migrating to a new SPM solution is understanding how well your current program is performing across people, processes, and technology. From there you can devise a future state vision for how your SPM program should operate. By understanding both current state gaps and what your future state needs look like, you can effectively begin defining requirements while also clearly articulating success criteria. It’s important to recognize that your previous or initial SPM implementation may not have gathered all necessary processes/requirements, so it’s vital to take a fresh, holistic view in this first step.
2. DATA INTEGRATION
One of the most complex and time-consuming requirements is determining how to best leverage current source data feeds to support the new platform. Within the context of your current state assessment and future state planning, the team should review what their reporting, analytics, and any future state compensation elements needs are to ensure a meaningful inventory of data requirements are defined. SPM solutions vary in terms of how data is gathered, translated, and uploaded into the system. Some solution applications may have a standardized format requiring additional configuration, whereas others may have the ability of data field mapping, which provides additional flexibility. The ability to own the data translation from your source systems to the SPM platform is key. Another focus point is to ensure that you evaluate all manual feeds to incorporate automation, as well as any additional error validation processes.
3. HISTORICAL DATA
Migrating historical data is an often-overlooked requirement when moving from one SPM platform to another. To keep costs down and minimize complexity, clients may want to ID only the data that is needed to ensure ongoing management of comp (e.g. payment history) and then transfer detail-level data into data storage to be referenced at a future date. It is important to consider what historical data is needed for the new system for reference on future payments
4. PROCESS IMPROVEMENT
Each SPM solution may require users to interact with the system in different ways. This area may need additional attention, especially as it has the potential to improve processes currently employed to manage sales compensation. Understanding the impact a new system will have on current processes, as well as those who manage the processes, is critical to ensuring a successful launch and ongoing management of core processes. As an example, two of the leading solutions in the market have very different expectations regarding the skills users need to possess to effectively maintain compensation plans and reports and, in some cases, execute the day-to-day activities. Defining expectations of your staff related to the new technology, prior to the project, will ideally give your organization the necessary time to introduce training that ensures effective ongoing management of the program.
5. WORKFLOW
SPM solutions vary widely in their ability to support automated workflow. As a result, there are significant challenges for sales compensation teams related to an SPM migration. Capabilities can range from templates to existing documentation, levels of routing, and even implementation of a stopgap for a payee to accept plan documentation prior to payout. Within the context of your future state definition, capturing and defining areas where automated workflows can be leveraged is a necessary part of the core requirements. Before a new system is deployed, it is important to map these processes out to drive user adoption, leverage the SPM system as an auditable repository, and minimize email management.
6. REPORTING & ANALYTICS
It is critical to develop a holistic vision of information distribution to the various stakeholders and tools used to deliver this content (i.e. static pages vs. dashboards). Similar to workflows, different vendors have various capabilities related to reporting for the end users. Assessing these capabilities against your business requirements is imperative to the success of the roll-out. For example, some vendors require more robust configurations in the system (e.g. crediting logic) to enable specific analytics capabilities, while some solutions, architected specifically for reporting and analytics, have much more robust capabilities. Another area for consideration is the use of the vendor’s reporting solution against your in-house technology stack. Some solutions make it easy to port data into new environments, which could be a consideration in helping to keep the number of reporting tools requiring management to a minimum.
7. DEPLOYMENT
The implementation of a new solution should be designed to minimize the impact on payees and managers. One of the most critical aspects of your effort is assessing how all stakeholders will be impacted and how to mitigate any disruption. It is important to identify upcoming changes for your sales organization, administrators, and other internal partners with a plan in place to offer the steps needed to ensure the best chances for solution adoption.
The first step when considering a new SPM platform is an assessment of your current program and the development of a future state vision. OpenSymmetry offers a no-cost workshop to help you gain an understanding of how your current SPM program performs against your needs and industry best practices, as well as a readout on current solutions in the market.
Leveraging the OpenSymmetry assessment methodology and knowledge of the leading SPM providers, you will be equipped with:
• A current state analysis scorecard
• The framework for a business case to support change
• Contemporary intel on the SPM market and SPM vendor capabilities
• High-level deployment and license cost estimates