Research firm Gartner states that 3% to 8% error rate in overpayment is the average related to incentive compensation pay disbursed using manual system such as spreadsheets. This ROI assumes a 3% rate.

Designing and Modeling new Sales plans before paying greatly enhances the ability to properly align the payouts and outcomes with more profitable business goals. Modeling new plans using historical data allows plan optimization that may increase profit or top line revenue by 1 - 5%. This ROI assumes 0.001% revenue increase in this calculation.

Year end audits can be painful and expensive. Many companies pay extra for Accounting firms to audit and review payments, adjustments, disputes, changes and alterations. Sarbanes Oxley has now added a further layer of expense and impact if issues arrise. Most companies can re-allocate 1.5% of their compensation revenue adjusted amount from the auditing function. This ROI assues 1.5% reduction from the amount of commissions paid.

According to Giga Information Group, the typical participant in an incentive compensation plan will spend approximately 8 - 12 hours per month auditing his or her own compensation payments for errors and omissions. This double-checking, or shadow accounting, comes at that the expense of productive selling and work time. For the purposes of the ROI estimation, we assumed the average plan participant works 1920 hours per year (240 days X 8 hours) and spends 8 hours per month on shadow accounting = 96 hours a year.

A properly identified Sales Inquery and Dispute process should opperate with a low dispute and related compensation adjustment cycle. Average compensation systems with 100 payees or above can expect a .75 - 2% total Compensation amount in adjustments and disputes. This ROI assumes a .75% rate.

This metric can sometimes be difficult to calculate, but the Real Time information used by Sales Management and Organizational staff drives the development and implementation of plans that are tied to higher gross margin products and services. For this example we have used the 1% increase in revenue as a benefit.

A properly designed and managed compensation plan should lead to increased employee satisfaction and a reduction in turnover amongst your plan participants. Giga Information Group estimates turnover costs range from one to three times the plan participant.

Aberdeen Group research found that the average company spends $1,500 a year per plan participant to administer these plans. This includes year over year plan changes and the time needed for IT and support resources to make these changes. This ROI uses a rate of $1500 per participant for this ROI estimation.

The goal of an incentive compensation plan is to focus behavior on achieving strategic corporate goals and visions. A Best of breed SPM system provides the sales team the real time capability to generate 'What If' payment estimates that leads to a more optimal sale capability. In addition, Sales Managers can create positive pressure on subordinate personnel to sell more optimal produts and services. This ROI assumes a 1% gain.