There is no doubt that having the right sales compensation plan in place is critical to the success of any sales organization, but what about the administration of the plan?

I have observed a number of very large organizations, even Fortune 1000 companies, that spend significant hours and dollars on plan definition, but then leave the critical incentive calculations to a meager Excel spreadsheet. And Sales Reps are asked to wait for several pay periods to get their incentive payout because the calculations take so long to complete.

Last month I attended the Sales 2.0 conference in Boston and heard a presentation from Joe Dawe, the Senior Director of Business Operations at Akamai. Joe shared his company’s success story implementing Xactly software to administer their incentive comp. And, I was intrigued.

Xactly provides SaaS, integrated with the most popular CRM systems (ex. Salesforce, Oracle), to administer your Sales Incentive Compensation. More officially, “Xactly provides the most affordable, on demand sales compensation solution’ and “enables companies to easily and affordably design, implement, manage, audit and communicate sales compensation programs.” The company was founded in 2005, is based in San Jose, CA and has approximately 125 employees.

On July 9, I had the opportunity to interview Karen Steele, the Senior Vice President of Marketing at Xactly Corporation. Karen has been with the company for three years, and has an extensive background in the incentive compensation industry.

Karen, I see from your website that Xactly sells an entire menu of incentive compensation products and services. What is your most popular product and how does it work?

“Our flagship product is Xactly Incent. This product integrates with your CRM system, automates incentive calculations and provide Sales Reps and Sales Leaders with real-time visibility into commissions calculations.

The Xactly team will work with your business to identify the key data sources needed to calculate your incentive compensation. For most companies this is 6-12 different sources including data from your ERP and HR databases.

The Xactly software aggregates your data based on a set of complex business rules, calculates incentive payments and provides electronic commissions statements. We can even provide your payroll provider with the files they need to pay your employees.”

In a typical organization who makes the decision to purchase your products?

“It varies by business, but we most often work with the heads of Finance or Sales Operations. The VP of Sales usually takes part in the decision making as well.”

In prior Sales Operations roles, I spent a lot of time working on “what if” models for incentive compensation. For example, what if sales quotas went up 10% or what if sales payouts began at 80% versus 90% of attainment- how would those changes impact incentive comp. Can Xactly automate that complex process?

“Yes, Xactly Modeling, an add on module, supports this process. We can use your actual data to help you make decisions. It provides leaders a “sand box” environment to work within.”

Per the Xactly website, this module allows you to “Forecast expenses using actual and/or projected orders to accurately determine future cash requirements, model compensation plan changes—whether minor adjustments or major realignments—and see the potential consequences before acting and change the organization structure and view the effects on both the top and bottom lines.” Cool!

Who are Xactly’s major competitors?

“This may sound flip, but our major competitor is Microsoft Excel. Most businesses use Excel for these complex processes. Xactly displaces Excel in most cases. Earlier this year, we acquired the only other SaaS vendor- our biggest competitor, Centive.

Occasionally we run into Callidus, but they are more of an “on premise” solution, not SaaS.”

Karen, how much does Xactly cost? And, considering current economic challenges, why is the timing right to invest in your product?

“The list price of an Xactly license is $50 per user, per month”. Like any SaaS company, this number fluctuates based on the total number of users. The more users, the lower the per license cost.

In terms of “why now?”, in times of economic challenges, businesses need to get more from their top performers. Xactly provides Sales Reps with real-time visibility into their commissions calculations. This helps them strategically focus their time and ultimately increase sales results.”

(The automation of incentive compensation also saves time, reduces errors and helps businesses to comply with Sarbanes Oxley. Companies will be able to “do more with less” in other areas of the business, like Finance or HR. Or, align their existing resources with more value add activities.)

Marci’s final words..

Having met with a large number of software vendors over the years, I was particularly impressed with Karen Steele and Xactly. Karen was well versed in the product, the industry, the benefits and the ROI. She made me feel very confident about considering Xactly.

If you want more proof… Xactly has won a number of software innovation awards and many established, prestigious companies have chosen to use their products including Avid Technology, Akamai and Forrester plus popular newcomers like InsideView and Right Now. Check out www.xactlycorp.com.

I would rank Xactly as Best of Breed.