Commission management is complex. This is something that we say over and over again because it can be truly hard to grasp just how complex it is without firsthand experience to the processes involved in incentive compensation calculations and management. Because of the wide range of variables involved: hierarchy management, quota tracking, tiered rate calculations – to name a few – you need tools with robust functionality that can handle the complex rule dependencies needed to produce accurate payouts.
Large organizations with in-house developers may see an opportunity in being able to create these tools internally in attempts to save money, however, they are drastically underestimating the complexity involved in incentive compensation management. Developing the software infrastructure needed to handle commission management internally requires extensive knowledge of diverse compensation models, complex hierarchies, and industry-specific compliance needs. Without this expertise, even with a dedicated software engineering team, you are essentially re-inventing the wheel.
Cost Analysis
A project of this size is a huge undertaking in both labor and costs. On top of the high initial investment costs of developing these structures from scratch, you will need a dedicated software engineering team for ongoing maintenance, additional tools for database infrastructure, training, and an array of unforeseen costs.
Expected Costs:
- Salaries: Software Engineers, System Architects, Project Managers, etc.
- Infrastructure & Tools:
- Servers or cloud hosting (AWS, Azure, GCP)
- Databases and storage solutions
- Project Management:
- Requirement gathering
- Industry specific knowledge capture
- Project monitoring
- Training & Documentation:
- Official training sessions
- User guides and onboarding materials
Unexpected Costs:
- Scope Creep & Feature Expansion
- Additional features or integrations requested mid-project
- Complex edge cases that weren’t accounted for in initial planning
- Extended Timelines: Costs from paying salaries during extended development
- Ongoing Maintenance: Bug fixes, feature updates, performance optimization
- Knowledge Loss: Departure of key developers or architects, leading to expensive onboarding for replacements and redundant work
- Business Disruption During Implementation: Lost productivity and delayed business operations
When developing in-house, the chances that you will exceed your budgetary restrictions are much higher than if you outsource to an established vendor whose prices are set and transparent.
Implementation
Developing an in-house application is a complex, resource-intensive endeavor that includes planning, designing, testing, and deployment, all of which require specialized skills and significant time. Additionally, application launches are rarely smooth. The development team will have to work through unexpected bugs, system failures, and/or performance issues, creating a continuous loop of development and testing, often consuming more resources than originally anticipated.
Development Requirements & Challenges
- Speed to Deployment: Planning, development, design, testing, and implementation are all phases of deployment that can stretch out longer than expected.
- Designing for Plan Flexibility: Compensation plans change regularly, and your system needs flexibility built-in to accommodate plan changes.
- Creating a Scalable Framework: Established vendors continuously enhance functionality, while in-house systems often stagnate, leaving them outdated and harder to maintain over time.
- Integration Complexities: Unforeseen API limitations or incompatibilities with CRM, ERP, HRIS, payroll, or billing systems
Accounting for Complex Features
- Rule versioning to streamline rule changes
- Automated auditing for verifying payments, rule structures, and data accuracy
- AI-integrated support for full-suite of system functionality
- Self-setup with drag and drop rule designer
- Hierarchical management tools
- Report library, customized dashboards, and on-the-fly analytics
- Custom pages for commission approval workflows, dispute resolution, sales entry, etc.
Limitations with AI-Developed Enterprise Software
AI can accelerate certain development tasks, such as initial coding, but without firsthand experience and exposure to varied compensation plans or complex rule requirements, you will end up with a feature-deficient application. The final product will be an application that may be capable of basic tasks but overall lacks the flexibility and level of automation a rigorously tested commission management platform provides. AI-generated solutions will miss critical functionality requirements and are prone to errors when managing special one-off scenarios or edge-cases. .
User Access to Support
Commissions are closely tied to payroll, so it is crucial that payments are calculated accurately. When issues arise, they are usually urgent and need to be dealt with quickly. As intuitive and straightforward as Core’s platform is, you can still depend on Core’s expert support team to provide quick resolution to any concerns that you have.
Outside of urgent scenarios, Core’s user support includes:
- Easing transition between new admins by providing training and support.
- Outsourcing rule construction, report design, or other tasks to Core’s team to ease internal administrative burden.
- Troubleshooting calculation errors and payout discrepancies.
With an in-house solution, you have no support to guide you through sticky situations, and if your system is not intuitive for admins to make rule changes on their own, they must rely on a developer’s technical expertise.
Benefits of Core
Founded in 2005, Core has had twenty years of exposure to a wide range of complex and varied incentive compensation plans, which has shaped our comprehensive and feature-rich platform. Core’s platform is an industry-leader for this very reason. Our established solution offers proven functionality that has already undergone rigorous testing, a dedicated support team, and the ability to scale easily as your team grows and evolves, all of which are features often lacking in home-grown solutions.
As the first in the industry to introduce self-setup, Core gives users complete control over their rule configuration. This feature, unique to Core, fully streamlines the setup process by simplifying rule design and drastically reducing implementation timelines while providing a cost-effective alternative for implementing the system. With Core’s in-depth instructional materials and AI-driven tools, admins can manage their compensation plans from end to end without any technical expertise, while saving money on implementation costs.
While in-house development offers the illusion of customization control, the reality is a longer, more expensive, and riskier path. An established commission management solution provides immediate access to proven technology, ongoing enhancements, and expert support, ensuring your organization can manage compensation with accuracy, efficiency, and confidence.
Schedule a demo to see the complex and robust functionality available in Core’s commission management platform firsthand.