Points of View

Xactly Helps Clients to Write off Legacy in Incentive Compensation Schemes

Feb 10, 2016 Khalda De Souza

Enterprises recognize that effective HR process strategies and management are critical to gaining competitive advantage—and they are increasingly dependent on complex compensation schemes to drive their growth. Moreover, there is no room for error because salaries increasingly include performance-based and incentive-based pay. These days, SaaS HR solutions are growing in popularity to help improve operations quickly and relatively easily. HfS recently talked to Xactly, an interesting SaaS player that has focused on improving the management and increasing the transparency of sales compensation schemes.

 

Xactly’s solutions enable clients to abandon clunky old spreadsheets and complex macros—what we at HfS categorize as “writing off legacy.” The vendor uses automation to increase the visibility and effective management of compensation schemes, which are core to driving growth in businesses.

 

The vendor’s own research highlights that as high as 87% of businesses still use spreadsheets or homegrown systems to calculate incentives. Within these spreadsheets are many opportunities to automate repetitive tasks, eliminate human error, and reorient people to more engaging and analytics-oriented work, such as ensuring that the company has a competitive compensation strategy and that it aligns to business objectives.

 

Xactly’s products are organized into three actionable categories, highlighting to clients the potential benefits of the solutions:

 

  • Automate: This includes a set of pre-defined macros easily integrated into small, medium and large enterprises compensation solutions, with document workflow and dispute resolution solutions
  • Motivate: This includes solutions to set and manage quotas as well as offer real-time visibility for sales reps
  • Optimize: This includes analytics and insights that enable enterprises to benchmark against industry best practices

 

In terms of business benefits, the time and potential money saved from this increased efficiency are plain to see, especially for organizations with larger sales teams that can also achieve increased output. Data gathered by Xactly shows that enterprises using its software have seen an annual revenue increase of 2.2% compared with those not using it. Moreover, buyers with access to what peer enterprises are paying are more able to create intelligent informed incentive packages to attract sales talent, as well as offer them appropriate salaries.

 

While Xactly’s clients span many industry sectors, its presence in technology is notable, with Salesforce and ServiceNow as clients. These SaaS providers could play an important role in referrals for Xactly as their own customer bases expand. Xactly will also need to keep an eye on other SaaS HR vendors, such as Workday and SAP SuccessFactors, which also offer compensation solutions and may consider Xactly a competitor—or perhaps as a viable acquisition target or partner. As buyers prefer to keep things simple, Xactly could be thinking about how it connects into this ecosystem to drive its own growth.