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Xactly's footprint expands beyond the sales team

Stuart Lauchlan Profile picture for user slauchlan December 1, 2014
With its tenth birthday looming, Xactly CEO Chris Cabrera sees his firm being in exactly the right place for growth.

2015 is going to be a milestone year for Xactly, the sales compensation management firm set up by Chris Cabrera in 2005. With its tenth anniversary looming in March, Cabrera can look back on a decade that has seen some significant shifts in his sector of the market.

One of the most pleasing of these must be a wider understanding of both compensation management and the software as a service delivery model. He says:

We do still have to evangelise. But the number of companies who get it and the customers who come to us is dramatically different. There is an incredible amount of interest now. Things have changed. I’ve been in this space for 17 year and I can see where it’s changed.

There’s now a desire for companies to motivate more than just their sales people. It’s now about how you incentivise your entire workforce. You have drinks firms who want to incentivise their drivers, or banks who want to incentivise their tellers. So there’s a broadening out of reach.

One recent customer to join the fold is language education firm Rosetta Stone which is deploying Xactly’s incentive compensation platform to keep pace with its rapid business growth as well as the stringent compliance requirements that a firm that by its very nature operates internationally.

Rosetta Stone is already using Xactly Incent, Analytics, Modeling, DELTA and eDocs, and is in the process of implementing Xactly Objectives and Sandbox.

Integration with Oracle and Workday, will enable Rosetta Stone to easily view and analyze essential information for better forecasting, decision-making and payment processes across multiple currencies.

It also means that sales representatives and new compensation plans can be on-boarded into the system in a matter of days or weeks, which is seen as critical to sustain growth and meet compliance requirements.

The broadened reach also extends to the type of customers Xactly is engaging with these days.

Cabrera says:

This has always been an extremely horizontal applications. We are seeing some new industries emerge for us, such as retail. A lot more retail companies coming to us. Another one is hotel chains like Hyatt. Lots of other chains want to be like Hyatt.

Hyatt is clearly something of a flagship exemplar for the firm. The hotel chain has 1,700 associates on various compensation schemes, including convention and catering personnel as well as direct sales staff. It needs to be able to build, view, measure and repurpose plans that take into account different geographic requirements.

Hyatt is currently running 30 compensation plans through Xactly Incent, tracking hundreds of thousands of transactions across departments. Associates are now able to access commissions dashboards and create analyses of how to modify behaviors to best meet both Hyatt’s and customers’ requirements. This has the added benefit of enabling Hyatt management to mitigate risk.

Next up

In terms of the product portfolio, next up is quota management which is seen as a major opportunity:

We play in the compensation world and quotas are a huge piece of that. In the past, we’ve managed quotes but we haven’t really given companies a tool to disseminate quotas and to know what quotas they have assigned. That’s usually entirely run on Excel these days.

Cabrera also cites the potential for Xactly to exploit Big Data:

We are sitting on top of this massive amount of data built up over nine years, terabytes of data. All the compensations routines, how companies pay, when they pay and so on. So we have our Insights product which allows customers and non-customers to purchase a subscription product from us that can self-select a benchmark. So you have public SaaS companies who want to look at what’s happening in other public SaaS companies with more than 500 reps, for example. You get an aggregated and anonymised data set.

This ‘data pile’ was behind a neat little PR triumph for the firm last month when the firm produced some alarming analysis of the gender disparity in compensation between men and women.

The data revealed that while around 70% of women were making their sales quotas compared to 67% of men, they received lower average commission rates—4.1% for women compared to 4.8% for men—and lower variable and base pay. While men were paid an average of $151,696, women’s average total pay was $126,395.

So as Xactly prepares for its birthday celebrations, the firm sees itself as being in rude health and taking a lead in its sector as an independent cloud services provider. Inevitably, given the firm’s close links to Salesforce and its large shared customer base, there will at times be speculation about Xactly’s potential as a takeover target, but Cabrera is clear on this point:

Salesforce is an investor in our company. Our desire is to be the best compensation company on the planet. We know Salesforce don’t want to do that and we don’t want to be a CRM company. Salesforce has hitched its wagon to Xactly.

My take

Xactly is that happy breed of company that has tapped into an essential business need that embraces almost every organization in the world. The changing nature and scope of its customer base testifies to it being in the right place at the right time . Ten years in and still one to keep an eye on.

Disclosure: at time of writing Oracle, Salesforce and Workday are all premier partners of diginomica. 

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