Describing SAP Incentive Management

SAP Incentive Management is a sales performance management solution that allows organizations to create variable incentive compensation plans based on complex criteria using a no-code, cloud-based user interface.

Incentive Management allows your compensation team to create flexible and complex sales compensation plans using drag-and-drop interfaces and pre-configured templates.

It includes multiple tools to simplify communication of plan data and results with your payees, including simple inquiry management with one-click traceability and easy-to-configure workflow automation.

Creating payee dashboards is easy and intuitive. Administrators can create Dashboards in the Incentive Management Portal using a graphical, drag-and-drop interface. Payees can access their dashboards from any browser or via a mobile app, allowing them to get updated compensation information and submit inquiries from anywhere.

Incentive Management extends the end-to-end reach of the SAP landscape by calculating payments and generating useful information from sales transactions for analysis and payment through SAP systems.

SAP Incentive Management (IM) is a cloud-native solution built on a microservices architecture comprising a combination of hyperscalers, including Microsoft Azure, Google Cloud, and Amazon Web Services.

Identity Authentication Service (IAS) and Identity Provisioning Service (IPS) allow you to configure seamless integration between this and supporting applications such as embedded analytics. IAS and IPS run on Microsoft Azure.

• IAS: supports user and group management and allows configurations for single sign-on.
• IPS: provisions users from IAS to the applications or service providers. IPS provides a unified customer experience across Incentive Management products and provides a single point of entry for user onboarding and access control.

Applications include Plan Communicator, the Pipeline, and Express Data Loader. All are hosted on a Google Cloud platform and built on a microservices architecture that uses the Kubernetes (K8s) platform. K8s architecture is an open-source container orchestration system for scaling and managing containerized applications.

All data, including staging and production data, reporting, and analytics, reside in an SAP HANA database. Access to the SAP HANA database tables and procedures is possible using the SAP WebIDE interface.

Finally, Embedded Analytics is an SAP Analytics Cloud application running on Amazon Web Services (AWS).

Compensation is the total monetary payment an employee receives for work performed.

Compensation Plans calculate and compensate each payee based on their performance measurements. This is called Variable Incentive Compensation.

The components of compensation are detailed in compensation plans. This plan contains a set of rules that specify how to compensate each payee.

SAP Incentive Management has two general users: the Administrator and the Payee.

An Administrator is a business user who can create and manage compensation plans and rules; update payee quotas, territories, and rates; run compensation calculations and review results; design end user dashboards; distribute and track plan documents; and model future incentive payouts.

An Administrator can:

• ​Create and manage compensation plans and rules.
• Update payee quotas, territories, and rates.
• Run compensation calculations and review results.
• Design end user dashboards.
• Distribute plan documents.

A Payee is the recipient of the payments generated by Incentive Management. A typical payee may be a sales representative, account executive, sales manager, or any other entity compensated based on performance. A Payee can view dashboards, accept distributed compensation plans, and raise disputes and inquiries.

A Payee can:

• View dashboards.
• Accept distributed compensation plans.
• ​Raise disputes and inquiries.

Let’s look at a scenario. Each Sales Representative uses an application to enter and track their sales opportunities. Generally, this is a Customer Relationship Management (CRM) system such as SAP Sales & Service Cloud. Once an opportunity is won and the sale is final, it moves into Incentive Management and becomes a Transaction.

When the calculation is run, the transaction is allocated to the Sales Representative as a Credit. This can be done using Preassigned Transactions or Territories.

Achievement is measured by aggregating all credits allocated to a single payee. This is called the Measurement because it measures the achievement of each payee.

Next, earnings are calculated for each payee based on the measurement. Earnings may be commissions, bonuses, or other special incentives and are calculated using a combination of rate tables, formulas, and other objects to ensure the correct result for each payee.

Finally, payments and balances are generated for each payee for the period. Similar payments are grouped, balances from prior periods are applied, and the payment data is ready to go to payroll or Accounts Payable.

The figure below is the Incentive Management Home Page. The Compensation team can access different workspaces, Performance Metrics data, and Latest Activity. The tiles on the Home Page are:

Manage Organization: contains workspaces to manage your sales reps, job roles, and sales hierarchies

Manage Plans: where you manage your plans, rules, and classification hierarchies

Review Calculations: contains the workspaces to run calculations and review results

Manage Setup: contains the workspaces to start setting up your system, including list data, system preferences, and security settings

View Performance Metrics: details Calculation Runs Metrics and Calculation Summary data

View Latest Activity: details the latest activity, such as user logins

• SAP Incentive Management is a sales performance management solution that allows organizations to create variable incentive compensation plans based on complex criteria using a no-code, cloud-based user interface.
• SAP Incentive Management (IM) is a cloud-native solution built on a microservices architecture comprising a combination of hyperscalers.
• SAP Incentive Management has two general users: the Administrator and the Payee. An Administrator is a business user who can create and manage compensation plans and rules, and so on; a Payee is the recipient of the payments generated by Incentive Management (For example, sales representative, account executive, and so forth).
• Compensation Plans calculate and compensate each payee based on their performance measurements, called Variable Incentive Compensation.