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Implementing Cognos ICM at Perficient

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Defining the Problem

For any growing organization, with a good size sales team compensated through incentives for deals and revenue, calculating payments becomes a bigger and bigger challenge. Like many organizations, Perficient handled this problem with Excel spreadsheets, long-hours, and Excedrin. Our sales team is close to a hundred strong and growing 10% each year. To help reward activities aligned to our business goals and spur sales that move the company in its strategic direction, the Perficient sales plans are becoming more granular and targeted. Our propensity to acquire new companies jolts the sales teams size and introduces new plans, products, customers, and territories. With Excel, it is almost impossible, without a Herculean effort, to identify whether prior plan changes had the desired effect or what plan changes might cost. With, literally, hundreds of spreadsheets being produced each month the opportunity to introduce errors is significant. Consequently, executives, general managers, sales directors, business developers, and accountants spend hundreds if not thousands of hours each month validating, checking, and correcting problems. The risks involved in using Excel are significant, with an increased likelihood of rising costs for no benefit, and limited ability to model alternative compensation scenarios

Choosing Cognos Incentive Compensation Management (ICM)

While there are many tools on the market, the choice to use Cognos ICM was relatively simple. Once we had outlined the benefits and capabilities of the tool, our executive team was onboard.

Cognos ICM is a proven tool, having been around for a number of years. Cognos ICM was formerly known as Varicent, before Varicent’s acquisition by IBM. The features of the tool that really make sense for Perficient are numerous. The calculation engine is fast and flexible allowing any type of complexity and exception to be handled with ease, and for reports and commission statements to be opened virtually instantaneously. The data handling and integration capabilities are excellent, allowing the use of virtually any type of data from any system. In our case, we are consuming data from our ERP, CRM, and HR systems, along with many other files and spreadsheets. Cognos ICM’s hierarchy management capabilities, allow us to manage sales team, reporting, and approval hierarchies with ease. User and payee management permissions with security comes bundled with the tool and will allow integration with external authentication tools. From a process point of view, workflow and scheduling are built in and can be leveraged to simplify the administration of the incentive compensation calculation and payment processes. Finally, the audit module tracks everything that is going on in the system from user activity, to process and calculation timing, to errors that occur.

Perficient is one of a few elite IBM Premier Business Partners. As the Business Analytics business unit within Perficient, we have a history of not only implementing IBM’s Business Analytics tools for our clients but also ourselves. We have implemented Cognos TM1 as a time and expense management system from which we could generate invoices, feed payroll, and pay expenses directly. We use Cognos Business Intelligence (BI) to generate utilization and bonus tracking reports for our consultants. We feel it essential that we not only implement solutions for our clients but to eat our own dog food, if you will.

Implementation and Timeline

Once we made the decision to implement and the budget had been approved, we decided on a waterfall-based lifecycle to drive the project. The reason for this selection has to do with our implementation team’s availability. As a consulting organization, the need to pull consultants into client engagements is absolute. We are also geographically dispersed so co-location with the business users was not an option. Having discrete phases, which could be handed from resource to resource was a must. As is typical with most waterfall projects, we implemented Cognos ICM in four major phases: requirements, design, development, and testing.

During the requirements phase, we broke down what we did today and layered that with what we wanted to do tomorrow. The output of the requirements phase was the Requirements Document with narrative and matrix style requirements.

Our design approach was to use the Cognos ICM Attributes Approach best practices developed by IBM. Rather than blindly following IBM’s prescribed methodology, we adopted the components that fit and discarded those that did not. The output of our design phase was a detailed design document that was ready for direct implementation in the tool.

The development phase had three distinct flavors. Data integration, where we sourced, prepared, and loaded the incoming data. Our goal was to load as much data as possible without forcing manual intervention. The calculation development segment, where we developed the calculations for hierarchies, quota, crediting, attainment, and payout. This is where the ICM logic resides and feeds into the compensation statements and reports. The last component was reporting. This included the development of the commission statements, analytical reports, and the file sent to payroll.

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The testing phase had two components, one of system testing and one of user acceptance and parallel testing. Today we are in the midst of the parallel testing, ensuring that we mirror the current statements or know exactly why we have differences.

Already, we are defining enhancements and future uses of the system. We need new reports to support detailed review of compensation statements and to analyze the success of programs. We have new plans for different types of business developers and others in the organization with incentive compensation. We have new data sources to be integrated to allow prospective and booked projects to feature into the report set.

Our goal, at the outset, was to get to parallel testing in three months assuming that our resources were available full-time. Starting at the end of January and being in parallel test today got us close. We lost out because client engagements took two of our resources; one part-time and one full-time. Targeting 90 days for an initial implementation is quite feasible.


The most important people on our team were the accountants and sales plan designers. They are the ones who know the ins and outs of the current plan and all the exceptions that apply. Going forward, they are the people who will continue to administer the plans and system. We also identified a secondary group of VIPs; business developers, managers, and executives to be involved as they are on the sharp end of the ICM system.

Our implementation team consisted of three to four resources. A solution architect who drove the design and calculation development. A developer who was responsible for data integration and report development. A business analyst for requirements gathering and system testing. A project manager who also moonlit as a business analyst.


We expect to receive many benefits from implementing Cognos ICM. We expect that the accuracy and consistency of our compensation statements to improve. Accenture, Deloitte, and Gartner estimate that variable compensation overpayments range from 2% to 8%. A company with $30M in incentive compensation will overpay between $600,000 and $2,400,000 every year. During the development process we identified issues with the current commission statements that needed correction.

Using Cognos ICM will improve incentive compensation visibility and transparency. Our business developers can review their commission statements throughout the month to ensure they are credited for the correct transactions. They can quickly identify where they stand in terms of accounts receivable, for which they are penalized. The sales managers can see how their teams are doing and who needs assistance. Our management team can perform what-if analyses to understand plan changes

Amongst the biggest benefits across the board will be time. Our Business Developers and General Managers can reduce their shadow accounting time. Our accounting team can reduce the amount of time they spend on data integration and cleanup, manually generating compensation statements, along with the amount of time they spend resolving errors and issues.


Going into this we knew one of the problems we would face is having resources available. For a consulting company like Perficient this is a great problem to have, our Cognos ICM resources are engaged on client implementation projects. It is always said that the Cobbler’s children have no shoes.

The second challenge of implementing Cognos ICM is exceptions. For the most part, implementing an incentive compensation solution is simple and the project sponsors will express a desire for it to be simpler. Then all the exceptions will come to light that need to be handled. We found a number of exceptions after beginning the project, but because of the power of Cognos ICM we were able to handle them and reduce the manual changes the accounting team needed to make.

The other challenge we faced was the data. The data coming out of our systems supports its original purpose but is often lacking for other uses. We needed to integrate and cleanse the data, all processes the accounting team had done manually, in order to have it flow through the ICM system. As we used the Cloud version of Cognos ICM, we leveraged staging and intra-system imports to smooth the integration process.

Finding Out More

Perficient will have a booth at the IBM Vision 2015 conference, which will feature Cognos ICM heavily. I will be there and look forward to meeting with you if you plan on attending. If you’re at the event, stop by and chat for a while. You can also leave me a comment in the box below. I look forward to hearing from you.

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Dominic Sagar

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