8 min read
The majority of the organizations globally are using excel spreadsheets in some form to manage their sales commissions and incentives programs. As the administration starts to become complex and the number of disputes increases, the first thought that comes to mind of business stakeholders is to automate the process somehow. They reach out to internal IT stakeholders to check what can be done. IT stakeholders based on their years of experience in managing complex IT systems, review the problem with the same lens. They like to look at both the options of buying a software product or building something custom. They are constantly worried about managing the long-term capital expenditure and in turn, spend a significant amount of time managing the unforeseen future changes without the complete business process knowledge. The time spent on managing these requests not only increases the overall complexity of requirements but also significantly increases the operational challenges.
In short, you have the out of the box solution, which is a commercial, ready-made product aimed at a broad market base. The customized solution, on the other hand, is a specifically created solution that is precisely built to match a company's unique demands. It's a difficult decision to make. Let us go into the realm of OOBS and Custom software before jumping to any conclusions.
As the name implies, an Out of the Box Solution, sometimes called off-the-shelf, is basically conveniently manufactured and tailored for your business. It works quickly and should take a limited effort to set up. It can be configured for your specific incentive processing needs and requires minimal customization. Because the solution was built to sell, OOTB solutions have a lower upfront cost and built-in process intelligence. As a result, they are cost-effective and typically have a lower total cost of ownership than custom solutions. A solution designed to be ready to go, enterprises may deploy and operate it promptly, after quick installation and configuration. This solution has a wide client base and is supported by the software company's quality assurance and support teams. The product generally has a defined development roadmap and updates with potential enhancements and features are available with timely upgrades. Customer success and delivery teams are also available to assist users with any concerns or inquiries they may have. The software may even assist you in improving your company procedures and overall operations by encouraging you to incorporate industry best practices.
In addition, no prior technical knowledge is necessary. You won't require a sophisticated IT staff to build up the system with business users having the ability to make changes and manage exceptions. OOTB systems are quite popular due to their high availability. They are primarily designed to satisfy the needs of the industry. Finding the appropriate one for your business is dependent on several parameters but is possible to accomplish with the right selection framework.
A custom software solution is created specifically for enterprises specific to their current business needs. The solution built by the IT team is one-of-a-kind, and tailored to the demands of the business. The software development business will examine an organization's internal processes in order to deliver a highly efficient solution that meets their immediate requirements without necessarily having the underlying knowledge of the business process.
There are several drawbacks to consider while going ahead with the custom approach. Depending on the developer and the amount of time spent on the project, custom software can be expensive. Creating a custom solution necessitates a thorough understanding of coding, programming and best practices. As a result, finding a software developer who is right for your company may be more expensive. Now that you know how much bespoke software costs, you should also know that due to lack of synergy between business and IT teams, many times it is unstable and easily broken. The truth is that custom solutions might go awry due to custom or modified code misalignment. Customizations are frequently overridden by updates or modifications to packaged software, therefore they must be validated and changed with each upgrade.
Customer service can also differ significantly depending on who built the software. It's tempting to make a custom component for every aspect, but overbuilding leads to overly complicated systems that are difficult to use and manage. The time it takes to construct one varies depending on a number of factors. A custom solution will take longer to create and deploy than an off-the-shelf solution.
Following are some of the key things that need to be considered while making a decision for an out of the box solution vs. custom solution development. It’s advisable to not do certain things to ensure the long-term usability and success of the project.
Consider how quickly you require the solution. Because custom software is a totally new solution that must be researched out, planned, and developed, it will take a long time to develop and install. If you're short on time, an out of the box solution will be a better match because it's already packaged and ready to use.
Changes are inevitable and trying to control that at the start of the project can be disastrous. Better don’t do it because there can be future complexities/challenges which your IT may not have a complete idea about. Rather the focus should be on getting an incentive platform that simplifies the change management process while continuing to control the time to market.
The process should be such that it can be easily managed by internal operations teams. The management of day-to-day sales commissions and incentive operations should be simplified as much as possible so that there is less reluctance from key business stakeholders to change. Incentive calculations is a periodic process and it becomes important that the platform supports the distinction between processing time and actual payout time.
You have a brilliant solution for other core tasks, but if those two solutions could communicate with one another, your productivity would skyrocket. Third-party developers write custom integrations between applications when software providers provide APIs for their apps to third-party developers. This implies you can connect almost any piece of software to another.
Initial capital expenditure should be less so as to keep the risk minimum in case the rolled-out incentive system doesn’t meet exact business requirements. The focus should be on operating expenses so that costs can be cut down in case of any business-related changes. Building a custom solution necessitates a thorough understanding of coding and programming. As a result, finding a development team who is right for your company will be much more time consuming and expensive.
The team managing your system development/process should not only have significant experience with the technology but it is really important for them to understand incentives business processes as well. This ensures the alignment of business needs with data/process flow.
Even with these recommendations, choosing software for your company would be difficult. You don't want to waste money, and you certainly don't want to wind up with software that doesn't genuinely assist you. Spending time understanding the business problem you're trying to address and how you envision it evolving in the near future is the most crucial part.
Out of the box incentive solutions generally tick all the above boxes while ensuring that risk is minimized for a variety of impacted stakeholders. Its advantages may be observed in a wide range of businesses including incentive process management. Talk with us if you're facing a challenging decision while devising your future incentive automation strategy.
Director of Customer Success
Amit has more than 17+ years of experience engaging with several life sciences companies in consulting projects. His expertise lies primarily in the areas of incentive compensation, salesforce effectiveness, business intelligence, and analytics. Prior to co-founding Aurochs Software, he worked with several leaders in the incentive compensation space such as ZS Associates, Optymyze (former Synygy) for almost 10 years in several leadership positions leading several product and service initiatives. He was part of the global IC leadership team at ZS Associates and led the formation of an offshore center of excellence for incentive compensation design and delivered several key client projects.
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